Revenue dives 71% for Dolphin Cove

Jamaican attractions operator Dolphin Cove Limited reported in its audited financials that revenue declined by 71 per cent, from US$14.87 million in 2019 to US$4.28 million for the year ended December 31, 2020.

After cost of sales, gross profit for the year ended at US$3.49 million, down from US$13.05 million earned in 2019.

The company’s operating expenses remained high at US$5.1 million, though much less than US$10.45 million recorded in 2019.

(Photo: Mayberry Investments)

Expenses consisted of maintenance, cleaning and sanitisation; staff costs, guest transport, advertising and marketing, legal costs, amortisation and depreciation, among others 

Staff costs, however, fell to US$1.95 million compared to US$4.36 million in 2019. 

Net losses posted at the year end amounted to US$1.43 million, down from positive earnings of US$2.29 million in 2019. An income tax credit of US$305,219 mitigated the level of losses, reducing this to US$1.13 million.

Total loss per stock unit for the year was US$0.29, compared to earnings of US$0.41 per share in 2019  

At year end, total assets for Dolphin Cove stood at US$30.36 million, down from US$33.10 million. Cash was reduced to US$14,804, plummeting from US$1.39 million.

Stockholders equity at year end December 31, 2020, fell to US$26.66 million, from US$28.65 million in 2019.

Dolphin Cove Jamaica is a marine attraction operating from Ocho Rios, Montego Bay and Lucea in Jamaica. Guests can swim and interact with dolphins and other marine creatures and local fauna in their natural environment. 

‘Testing’ times

Directors stated in notes attached to the audited results said that the group performed various assessments and stress testing of its business under various planning scenarios.

Assessments revealed that there was a significant business interruption primarily due to travel restrictions and the closure of tourist attraction sites.

This resulted in delays in the collection of trade receivables, a significant decline in sales, reduced earnings and operating cash flows, and managing liquidity to continue the operations at a reduced level. 

As highlighted by directors, to address these challenges and risks, the group “acted diligently on collection of its accounts receivable and continued monitoring leading to significant further reduction in receivables;  negotiated extended credit terms with its suppliers; closed its parks from March to July 2020; separation of non-critical staff and agreed salary reduction for all staff; deferral of planned non-essential capital expenditure; and reduced non-critical overheads and directors’ fees”.

Management also obtained a credit line facility of J$140 million to support its cash needs and negotiated suspension of rental charge for properties at certain locations. 

Consequently, all the above measures led to a “sustainable cash flow position and a reduction in account receivables and payables to a manageable level.”

Directors said that the group has been able to meet its obligation to its suppliers and employees and to ensure the well-being of the animals under its care to date and has implemented strategic plans to continue the operations at a reduced level for the next financial year. 

In addition, directors noted that with the easing of travel restrictions and bans beginning June 2020, the group has seen some increased demand for products and services in the first few months of the new financial year 2021. 

Moreover, the group is seeing low occupancies but increased offtake from the hotels as well as an uptrend in arrivals of tourists to the country which is encouraging. 

“The group is optimistic that a solution to the virus will be available soon and restore confidence in travel during the usual busy tourist season and beyond. The governments in the countries of operations and worldwide tourism institutions are committed to restoring the capacity of the tourism industry in the shortest possible time, while ensuring the safety protocols,” directors stated. 

“The group is prepared for what it believes, will be a full recovery of the tourism industry in the near future,” they added.

However, the executives expect that new levels of financing will be needed for recovery.

“The financial support required is dependent on the evolution of the pandemic and its implications on the group’s operations; however, the good credit reputation and the low-debt status of the group will allow it access to additional financing, and furthermore the parent company is also committed to support the group when necessary,” the directors explained

They said that, based on sales projections, reflecting the estimated impact of the stressed conditions currently experienced and other initiatives undertaken, management expects to continue in operations, meeting its obligations as and when they fall due, for at least twelve months from the reporting date. 

They also underscored that the ultimate impact of the pandemic on the group remains unknown as it is uncertain how long it will take to fully control the virus and return to normalcy.