November 15, 2019

Dolphin Cove Limited (DCOVE), for the nine months ended September 30, 2019 reported total revenue of US$11.63 million, relatively unchanged when compared to US$11.62 million booked the year prior. Total revenue for the quarter amounted to US$3.79 million (2018: US$3.89 million). According to the company, “during the nine months to September the Tour Operator Market showed a recovery in production (+7%) with significant improvement on the Montego Bay area. We also achieved improved performance in sales at Yaaman Adventure Park from this same market as this product becomes established. However, the arrivals of ships to the Falmouth Port declined by 18%, and this reduction in arrivals affected production from the Cruise Ship Market as 50% of our guests from cruise ships come from this port.”

• Revenue from Dolphin Attraction contributed US$6.33 million to total revenue; this represents a 1% decline when compared to the US$6.38 million reported in the prior year. Revenues from the Ancillary Services totalled US$5.31 million, a 1% increase from last year’s US$5.24 million.

Total direct cost for the period totalled US$1.26 million, this was 21% above the US$1.04 million reported in 2018. DCOVE noted: “our direct costs increased during this year driven mainly by addition of four dolphins at Puerto Seco and enhanced veterinary procedures.”

As such, gross profit for the period went down by 2%, to US$10.37 million relative to 2018’s total of US$10.58 million, while for the quarter gross profits closed at US$3.34 million, 5% less than US$3.50 million of the prior period.

Other income was little changed at US$193,268 in 2018 relative to the US$193,784 of last year.

Total operating expenses also saw an increase of 7%, moving from US$7.30 million in 2018 to US$7.81 million. This increase was primarily due to:

• A US$321,483 increase in other operating expenses which closed at US$2.86 million (2018: US$2.53 million).
• The 8% rise in selling expense which amounted to US$3.05 million (2018: US$2.84 million).
• Administrative expense on the other hand declined marginally by 1% to US$1.90 million (2018: US$1.93 million).
• For the third quarter total expenses grew by 6% to US$2.65 million (2018: US$2.49 million).
• Management highlighted that, “the increase in selling, operating and administration expenses was mainly due to the increase in selling efforts focused in the tour operator and eCommerce markets, increase in the depreciation of assets and the impact of adoption of IFRS9, an accounting standard that requires provisioning in relation to accounts receivable to be anticipated at the time all revenue is recorded instead of at the time collection is deemed to be doubtful. In addition , the expenses incurred in the operation of our new facility at Puerto Seco that were not contemplated, such as legal fees and environmental requirements, represented 1% of this 6% increase.”

 

Finance income rose by 192%, totalling US$158,071 relative to US$54,215 last year, while finance cost moved up from US$209,444 for the same period in 2018 to US$245,701.

Profit before taxation declined 19% to US$2.67 million from US$3.32 million.

After taxes of US$551,706 (2018: US$367,553), Net Profit for the period was US$2.12 million, 28% less than the US$2.95 million booked the prior year. Net profit for the quarter amounted to US$702,492 (2018: US$915,198 million).

Earnings per stock unit for the nine months totalled US$0.0054 relative to US$0.0075 in 2018. EPS for the quarter amounted to US$0.0018 relative to US$0.0023 in 2018. The trailing twelve-month EPS amounted to US$0.0039. The stock traded at JMD$11.00 as at November 14, 2019. The number of shares used in the calculation was 392,426,376.

DCOVE highlighted: “ This year the attractions subsector of the tourism industry has faced challenges from external events: a decline in the high quality cruise ship arrivals and shifts in important DMC accounts, but we are optimistic about the future because we have a very strong balance sheet.” The Company also added, “we have a product that is in high demand and a brand name in the world of the marine park business associated with the highest ethical standards operating in a market that is buoyant in terms of hotel room growth and we are diversifying our product mix.”

Balance sheet Highlights :

As at September 30, 2019, the company’s assets totalled US$32.76 million, 8% more than the US$30.38 million reported as at September 30, 2018. This was as a result of an increase in ‘live assets’ and ‘Property, plant and equipment’ which totalled US$4.47 million (2018: US$3.78 million) and US$22.55 million (2018: US$21.59 million).

The company further added, “accounts receivable increased from US$1.47 million in September 2018 to $1.91 million in September 2019 largely as a result of trend towards tour operator business than cruise ship business, the tour operator business having longer credit terms.”

The company closed the financial period with shareholders’ equity in the amount of US$29.75 million (2018: US$27.61 million) which resulted in a book value per share of US$0.076 (2018: US$0.070).

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