MTL reports 113% increase in six months net profits

Date: January 15, 2018

Margaritaville (Turks) Limited (MTL), for the six months ended November 30, 2018 reported that revenues increased by 58% for the period to US$3.56 million (2017: US$2.25 million). MTL noted, “This was earned from the 509 thousand passengers that visited the port spending an average US$6.99 each. The comparative revenue for the prior year ( 4 months vs 6 months was US$2.25 million from 318,722 passengers at a spend rate of US$7.07.” For the second quarter, MTL booked a 346% increase in revenue to US$1.74 million compared to US$390,044 for the comparable period in 2017. In addition the company noted, “This was earned from the 246,467 passengers that cruised into the port during the period resulting in spend-per passenger of $US$7.06. This is compared to revenue of US$390 thousand earned from the 57,939 passengers in the similar period in the prior year at a spend rate of US$6.73. It is important to note that the prior year second quarter had only one month of revenue as the port was closed for the entire September and October months after the passage of back to back hurricanes Irma and Maria during the first week of September. In addition, revenue per passenger will vary marginally from one period to another, even where aggregate passenger numbers are similar, due to variations in dwell time, variations on time of day that the ship called and the differing weather patterns on the ship call days. ”

Cost of sales (COS) also increased by 58% for the period to US$932,368 (2017: US$590,004), while for the quarter a 334% increase was observed to US$460,982 (2017: US$106,201).

As a result, gross profit grew year-on-year for the six-month period by 58%, from the US$1.66 million reported as at November 2017 to US$2.63 million. Gross profit for the second quarter soared to US$1.28 million (2017: US$283,843).

Total expenses increased by 49% for the period in review to US$2.13 million (2017: US$1.43 million). This increase was associated with a 68% uptick in the company’s administrative expenses to US$1.96 million compared to US$1.17 million in 2017. Notably this was offset by a 90% reduction in Depreciation and amortization which closed the period at US$11,345 from $113,206 a year ago. Promotional expenses and management fees closed the six month period at $US$31,380 (2017: US$20,937) and US$125,000 (2017: US$125,000) respectively.

Consequently, operating profit within the six months grew by 113% to US$497,318 (2017: US$233,744). Operating profit for the second quarter totaled US$106,328 versus an operating loss of US$62,667 in 2017. Total comprehensive income for the six months amounted US$496,982 (2017: US$233,686), while for the quarter MTL’s total comprehensive profit saw a gross increase to US$106,167 relative to a loss of US$62,725 million the previous year.

The six-months earnings-per-share was US$0.0074 compared to US$0.0035, while the EPS for the quarter amounted to US$0.0016 compared a loss per share of US$0.0009 for the corresponding quarter of 2017. The twelve months earnings per share amounted to US$0.020 The number of shares used in our calculations was 67,500,000. MTL closed the trading period on January 14, 2018 at US$0.20.

MTL stated, “We are now deep into the third Quarter and approaching the busier part of the winter tourist season. The second half of the year is where traditionally approximately 60% of the revenue and profits are earned. We are encouraged by the trend so far. No adverse weather patterns are expected for the remainder of the fiscal year. A number of open vacancies were filled prior to the start of the winter season as some work permits that were long in the process were granted. We continue to make representation for the change in the policy on expatriate workers.

Balance Sheet Highlights:

The company, as at November 30, 2018, recorded total assets of US$5.23 million versus US$4.72 million in 2017, a 11% increase. This was due to the ‘Owing by related companies’ for the period surging to US$ 757,203 when compared to US$43,954. Management indicated that, “Related companies balances were reduced substantially during the quarter compared to the balance at the close of the first quarter and are also below the balance at the year end.” However, the total asset base was tempered by the reduction in the company’s Trade and other receivables which closed the period at US$101,030 (2017: US$325,030). MTL further noted, “Marginal expenditure was made on fixed assets during the second quarter. Expenditure for the 6 months was just over US$101 thousand moving from US$98,794 at the close of the first quarter. Most of the refurbishing and repairs necessitated as a result of damage associated with Hurricanes Irma and Marie in 2017 are now completed.”

Total Stockholders’ equity as at November 30, 2018 closed at US$4.17 million. This resulted in a book value of US$ 0.0618.

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