COVID-19 hits SVREL hard

Business

COVID-19 hits SVREL hard

By Durrant Pate
Observer Business writer

Sunday, July 12, 2020

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The three-month closure of Caymanas Park due to COVID-19 has hit Supreme Ventures Racing & Entertainment Limited (SVREL) hard, with the company reporting year-to-date losses of $204.3 million. SVREL is the promoter of horse racing in Jamaica.

The information is published in SVREL's financial report for May 2020, which indicates that the losses are not surprising, considering that the horse racing segment of the Jamaica-based regional gaming company, Supreme Ventures Limited, had been relatively idle with the closure of Caymanas Park, the home of thoroughbred racing in Jamaica.

For the corresponding period, May 2019, the year-to-date losses amounted to $129.3 million. The extent of the financial losses is most pronounced in the company's accumulated deficit, which has grown from $540.5 million to $754.7 million as at May 2020.

The cost of sales was the biggest drag on SVREL, posting a loss of $1.3 billion for the year-to-date as at May 31 this year, which was a marked improvement over the loss of $2.4 billion for the same period in 2019. Revenue for the period declined by 50 per cent, moving from $2.92 billion in May 2019 to $1.53 billion for the period under review.

Operating expenses, whilst showing major improvements, were still in the negative column at minus $384 million coming from minus $518 million in May 2019. Losses from operations worsened to $159 million for May 2020, coming from the $85 million recorded for the previous year.

Finance costs were relatively stable, inching up by less than $1 million to $45.3 million. Shareholders' equity in the company continued to be eroded, currently standing at minus $809.1 million, coming from $604.7 million in December 2019 and $520.1 million in May 2019.

As part of the recovery effort, parent company Supreme Ventures has teamed with Chukka Caribbean Adventures to offer tours at Caymanas Park, which is operated by SVREL. An MOU to this effect was signed earlier this month by both companies, which allows for collaboration on marketing programmes, support in logistics, and development of the tour experience.

Both companies are expected to work together on priority areas to stimulate business growth and generate foreign exchange.

Commenting on the MOU, John Byles, managing partner of Chukka Caribbean Adventures, said the partnership was made easy as Caymanas Park is a world-renowned brand. “What we want to do is package this as a full-day experience for hotels and tourists in the Ocho Rios market, where they get the chance to go to the races, interact with the horses, and make their bets,” he said.

Supreme Ventures Deputy Chairman Ian Levy added that the partnership will go a long way in improving business and generating profits, which will benefit the track workers and shareholders of the companies involved in the venture.


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