Sharp rebound for Dolphin Cove

In March 2020, Jamaica closed its borders to incoming visitors by planes and ships as a result of the emergence of the deadly Covid-19 virus, thus bringing to a halt the important tourist industry and many others that relied on it.
The impact was immediate and devastating to the entertainment attraction entity, Dolphin Cove based in Ocho Rios, with locations on the north coast of the island. For the nine months to September 2020, the company posted revenues of just US$3.6 million and a loss of $864 million, with the September quarter generating revenues of just $320,000 and a loss of $590,000. By the third quarter last year, cruise shipping from which it generates a large portion of income had just 8,381 visitors in 2021 compared to 219,000 for the first nine months of 2019, but visitor arrivals by planes were back to 70 percent of the 2019 numbers for the third quarter and 54 percent in the June quarter and by November last year arrivals were down around 20 percent from the same month in 2019, an indication that the industry could well be nearly back on track in 2022 and provide a considerable boost to the company’s revenues.

Dolphin Cove closed at a 52 weeks’ high on Monday.

The company lost US$1.13 million for 2020, but chalked up a profit of $1 million in the 2021 third quarter, from $2.57 million in operating revenues, and a profit of $2.1 million for the nine months from operating revenues of $5.44 million. While revenues rose 51 percent in the nine months, expenses fell from $3.5 million to $2.9 million, with all categories of cost falling except for finance that rose from $96,000 to $215,000. Although operating revenues spiked 703 percent over the measly income for September 2020 quarter, direct expenses rose 61 percent to $258,000 and other operating expenses rose 139 percent from $548,000 to $1.31 million. The above numbers suggest that costs are down generally, it appears that some costs may have been fully trimmed from the system.
Gross cash flow brought in $2.5 million but growth in working capital, addition to fixed assets resulted in negative funds flow of $149,000 for the nine months. At the end of September, shareholders’ equity stood at US$29 million. Total long term borrowings amount to US$820,000 with bank overdraft at $1 million. Current assets ended the period at $6 million including trade and other receivables of $2.7 million, cash and bank balances of $2 million. Current liabilities ended the period at $2.6 million. Net current assets ended the period at $2.4 million.
At the end of December, the stock traded at $15 with a PE of 11 with the earnings per share of $1.35 and a PE of 5 with projected earnings of $3 for the current year.

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