November 16, 2020
Dolphin Cove Ltd (DCOVE)
Financial Statements for the Nine Months Ended September 30, 2020:
Dolphin Cove Limited (DCOVE), for the nine months ended September 30, 2020 reported total revenue of US$3.61 million, a 69% decrease when compared to US$11.63 million booked the year prior. Total revenue for the quarter amounted to US$319,754 (2019: US$3.79 million). According to the company, “During the third quarter, Dolphin Cove successfully and safely re-opened four of its five parks. We operated with very strict budget discipline and only opened for a few days per week with reduced staff to have whilst still being able to offer our guests the high-quality service that characterizes Dolphin Cove. These actions put the company in a good position to have our management focus in setting the strategies to generate more business and at the same time ensuring that the parks maintain a slim and controlled operation. Although we recorded a loss in the quarter, we generated positive cash flow from operations in the period.”
Revenue from Dolphin Attraction contributed US$1.95 million to total revenue; this represents a 69% decline when compared to the US$6.33 million reported in the prior year. Revenues from the Ancillary Services totalled US$1.66 million, a 69% decline from last year’s US$5.31 million.
Total direct cost for the period totalled US$725,210, a 43% reduction from the US$1.26 million reported in 2019.
Gross profit for the period went down by 72%, to US$2.88 million relative to 2019’s total of US$10.37 million, while for the quarter gross profits closed at US$153,510, 95% less than US$3.34 million of the prior period. Other income amounted to US$151,795 relative to the US$193,268 of last year.
Total operating expenses saw a decrease of 55%, moving from US$7.81 million in 2019 to US$3.53 million. This decrease was primarily due to:
A US$743,478 decrease in other operating expenses which closed at US$2.11 million (2019: US$2.86 million).
The 77% decline in selling expense which amounted to US$716,015 (2019: US$3.05 million).
Administrative expense on the other hand declined by 63% to US$699,841 (2019: US$1.90 million).
For the third quarter total expenses fell by 79% to US$548,124 (2019: US$2.65 million).
Finance income fell by 35%, totalling US$103,198 relative to US$158,071 last year, while finance cost spiral downward from US$245,701 for the same period in 2019 to US$96,294.
Loss before taxation amounted to US$484,117 relative to the profit before tax of US$2.67 million booked the prior year. For the quarter, loss before taxation closed at US$348,813 compared to profit before taxation of US$782,495 twelve months earlier.
After taxes of US$379,798 (2019: US$551,706), Net loss for the period was US$863,915 compared to net profit of US$2.12 million booked the prior year. Net loss for the quarter amounted to US$590,475 when compared to net profit of US$702,492 reported in 2019.
Loss per stock unit for the nine months totalled US$0.0022 relative to earning per stock unit of US$0.0054 in 2019. LPS for the quarter amounted to US$0.0015 relative to EPS of US$0.0018 in 2019. The trailing twelve-month LPS amounted to US$0.004. The stock traded at J$7.00 as at November 13, 2020. The number of shares used in the calculation was 392,426,376 units.
DCOVE noted: “Our main target this quarter was the local market, and the majority of our marketing spend was focused on creating strategies for that market. Only 35% of the hotel rooms available in Jamaica are open and occupancy of them is low and they must operate at a significantly reduced capacity due to social distancing restrictions. The expectation for the following months is to see a gradual increase in the arrivals and occupancy levels which will represent a larger base of potential clients for our parks.”
Balance Sheet Highlights:
As at September 30, 2020, the company’s assets totalled US$30.79 million, 6% less than the US$32.76 million reported as at September 30, 2019. This was as a result of an decrease in ‘Inventories’ and ‘Accounts receivable’ which totalled US$217,303 (2019: US$405,187) and US$1.15 million (2019: US$1.91 million).
The company further added, “Despite the decline in the working capital, our balance sheet remains strong. Dolphin Cove´s debt free position and its large base of tangible assets as well as a track record of profitable operations enabled it to secure a US$1 million credit line with Sagicor Bank. This will release pressure to our cash flow position and will let us smoothly navigate the following months as the business recovers from the pandemic.”
The company closed the financial period with shareholders’ equity in the amount of US$26.93 million (2019: US$29.75 million) which resulted in a book value per share of US$0.069 (2019: US$0.076).
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