The management of Margaritaville Turks Limited, a subsidiary of Margaritaville Caribbean Limited, has shared that an infusion of cash from the parent has been the source of funds that has kept the company afloat since March 2020.
The parent company funded activities for the quarter ended November 30, 2020, and by extension the six-month period through the repayment of US$601,431 owing to the operation.
Management outlined that, since communicating the result of the first quarter of fiscal year ending 2021, there has been no change in the status of the company with regards to revived revenues.
Management outlined, “There were no cruises into the Grand Turk Port for the second quarter and, at today’s date, no confirmed timeline has been determined for the resumption of cruising to the port.”
However, company directors are upbeat about developments that relate to the containment of the COVID-19 virus.
“There were some positive developments during the quarter. The first vaccine to be approved by the Food and Drug Administration (FDA) in the United States was administered during November 2020, and there are efforts underway to increase the production and distribution of this to increase the production and distribution of this and other approved vaccines in the shortest possible time,” the company’s management observed.
Margaritaville Turks also noted that cruise lines have reported increased forward bookings, and that repeat customers are taking advantage of offers to secure cruise dates. Additionally, the company said, countries from which the larger portion of cruise customers originate are focusing on the vaccine roll-out to the elderly and the most vulnerable.
“This will ensure confidence is returned to the leisure market before the full roll-out is completed.”
Meanwhile, with no revenue to support expenditure, the company made even greater efforts at cost containment that initiated redundancy proceedings on behalf of some employees during the quarter. Margaritaville Turks took this decision, also, to become compliant with local labour laws since some permits for work expired after the declaration of the coronavirus epidemic in March 2020.
“There being no clarity on work resumption, the Government declared that there was no basis for renewing the work permits,” management outlined.
The company incurred expenses of US$366,920 for the quarter and with no revenue, except for items disposed at the market cost to avert spoilage, the net loss for the quarter US$366,920. This compared to net profit of US$128,010 for the same quarter in the prior year.
When compared to earnings per share of US$0.19 in the corresponding period the year before, loss per share for the quarter was 0.544 US cents cents for the quarter under review.
Expenses incurred include staff costs, utilities, insurance, depreciation and amortization and stock loss due to spoilage as there were items in inventory for which there were no resale market.
Management gave the assurance, “We continue to make every effort to contain our costs, whilst ensuring that the facilities remain functional and in a state of preparedness.”
Total expenditure for the six months was US$ 805,005. The net loss total was the similar US$ 805,005. This compared to revenue of US$3.8 million and net profit of US$445, 312 for the same period in 2019.
With the funds from the parent company, Margaritaville Turks paid down US$78,168 on the balance to suppliers during the period.
Inventory changes were due to sale of items as well as to disposal due to expiry or spoilage.
There were no other significant changes to assets or liabilities during the quarter,
Management said, “This has been an unprecedented journey to date. There is no determined date for the resumption of cruising; but the commencement of vaccinations gives us renewed hope.”