DOLPHIN Cove Limited (DCOVE) slipped to its first annual loss since the pandemic after a one-two punch from Hurricane Melissa and the bankruptcy proceedings surrounding its parent company, forcing the tourism attraction operator to write down millions of US dollars in related-party balances while battling a sharp decline in visitor traffic.

The dolphin attraction company published its December 2025 audited financials on Monday, three months after they were originally due, giving investors insights into the company’s operations, which are mainly in the hospitality sector. The company reported a consolidated net loss of US$2.34 million ($370.72 million), a sharp contrast to the net profit of US$1.83 million in 2024.

Although Hurricane Melissa disrupted operations and reduced revenue, the company’s full-year loss was primarily driven by a US$2.82-million write-down linked to the Chapter 11 bankruptcy proceedings involving its parent group in Delaware.

The proceedings carry particular significance for local shareholders because World of Dolphins, Dolphin Cove’s direct parent company, pledged its entire 79.99 per cent stake in the Jamaican-listed attraction operator as security for some of the debt owed to noteholders.

The company impaired US$2.82 million in related-party balances amid uncertainty over whether the funds will ultimately be recovered.

It fully wrote down a US$1.11-million advance to Dolphin Discovery, Inc which was intended to support the development of a new dolphin encounter park in St Lucia. A US$1.71-million impairment was also made against related-party balances from Dtraveller Limited and Viajero Cibernetico S.A.

“At the reporting date, the extent of the chapter 11 proceedings’ effect on the collectability of related-party receivables remains uncertain,” DCOVE’s notes opined.

Its direct parent company, World of Dolphins Inc, repaid US$848,648 after Dolphin Cove made a US$1.48-million dividend payment in June 2025 to all shareholders.

Dolphin Cove’s ultimate parent company, Leisure Investments Holdings (LIH) LLC, filed for chapter 11 bankruptcy in March 2025 after noteholders/lenders exercised their rights over more than US$100 million in overdue debt.

While an announcement was made in September 2025 that World of Dolphins was looking to sell its direct stake in Dolphin Cove, there has been no update on the progress of that sale.

“Notwithstanding these proceedings, the company’s operations are independent of those of the wider group and continue without disruption. Management has concluded that the going concern basis remains appropriate,” the 2025 financials noted on the company’s ability to continue operations.

However, the situation continues to remain complex as the appointed administrators continue to make new claims against former Dolphin Discovery CEO and majority LIH shareholder Eduardo Albor Villanueva. A new claim by the administrators (document 1155) makes reference to transfers done between January 2024 to January 2025 involving Dolphin Cove and other LIH subsidiaries.

It was revealed that a property connected to Albor Villanueva is now on sale for US$5.38 million in Miami, Florida. Albor Villanueva was arrested by the Mexican Federal police in February 2026 and remains in custody.

Hurricane Melissa drags earnings

Dolphin Cove’s consolidated revenue for the year declined 14 per cent, from US$15.30 million to US$13.09 million, as it experienced lower business across its north coast locations.

A comparison of the full year numbers and the nine months numbers revealed that Dolphin Cove’s consolidated revenue for the fourth quarter (October to December) declined by three-fifths, from US$3.34 million to US$1.26 million. The audited notes highlighted that the company’s Negril location, dubbed Dolphin Cove Montego Bay and located in Lucea, Hanover, was closed until January 2026.

While the Ocho Rios and Yaaman Adventure Park facilities in St Ann resumed operations in early November, the facilities were constrained with lower visitor traffic and were opened only on cruise ship days and select hotel reservation days. Its operation at Moon Palace Jamaica in Ocho Rios, St Ann remained temporarily closed up to the publication of the annual report.

Dolphin Cove’s prior disclosure notices on its delayed financials revealed that it had an internal reorganisation, and optimised its payroll after the hurricane to align with its current operating levels.

“As a result of the hurricane, certain park operations were temporarily suspended, adversely affecting visitor volumes, revenues, and operating cash flows during the affected period,” DCOVE stated on the Melissa impact.

A closer review showed that Dolphin Cove’s Q4 operating loss before impairment provisions moved from US$92,987 to US$2.02 million as it had to pay to maintain its ongoing operations.

The last time Dolphin Cove had a full-year loss was in 2020 when the COVID-19 pandemic shuttered operations and decreased tourist arrivals to Jamaica.

“Although the hurricane negatively affected short-term operations and liquidity, management expects the group’s operations, visitor volumes, and cash flows to continue recovering throughout 2026, supported by the projected normalisation of tourism activity, continued cruise operations, the reopening of hotels, and ongoing operational recovery efforts,” DCOVE’s financials stated.

Despite those developments, Dolphin Cove remains stable as it focuses on recovering from the aftermath of the hurricane. Its consolidated asset base declined 11 per cent to US$33.34 million ($5.27 billion) in 2025 as it sold some animals (live assets) and reduced its balances against related parties. While total liabilities declined seven per cent to US$6.10 million, it received a moratorium from Sagicor Bank Jamaica Limited while reducing its overall debt balance. Shareholders’ equity decreased 12 per cent to US$27.24 million.

DCOVE declined 35 per cent in 2025 due to the bankruptcy proceedings. It remains down 16 per cent in 2026 with a share price of $10.04 and a market capitalisation of $3.94 billion as of Tuesday. DCOVE’s Company Secretary Rhonda A Goodison resigned on April 21 and was replaced by Tracy K Campbell. The company anticipates that it will publish its first-quarter report, ending March 31, by June 5.

Investors can check https://veritaglobal.net/dolphinco/document/list/6300 to keep abreast of the developments at LIH.