Growth stalled for Dolphin Cove amid uncertainties
Patrons enjoying the Ocho Rios location.

Although Dolphin Cove Limited has returned to profitability in 2021, its plans for growth and expansion are limited due to the uncertainty with the novel coronavirus which constantly mutates with new variants.

Dolphin Cove lost its second quarter in 2020 where it earned no revenue with the full year seeing a net loss of US$1.13 million ($174.72 million). Though revenue of US$4.82 million for the first nine months of 2021 trails the US$14.87 million earned in 2019, profit before taxation (PBT) hit US$2.18 million (4336.83 million) which is within striking distance of the US$2.29 million in PBT for the 2019 financial year. The year 2019 was Jamaica's best year on record for tourism arrivals and business across the country.

Despite this positive turn of events, Dolphin Cove's Caribbean expansion is currently on pause with the development of its Marine Park at Lucea, Hanover, being discussed with the international hotel developer. Dolphin Cove (Negril) Limited was paid US$100,000 on March 3, 2020 by Reserve Investments Limited for the option to develop a new hotel on the property.

“We were approached by a large developer of hotels for the possibility of constructing a very large hotel on the property. The US$100,000 was just an option for them to have time to do additional due diligence. They asked for an extension and we're right in the process of negotiating it. The project is still alive and we're presently negotiating to extend this option so that we can proceed,” stated Chairman Stafford Burrowes at the company's annual general meeting on Wednesday.

When asked about an equity raise to further bolster the company's balance sheet, Burrowes explained that the company didn't need additional funding seeing as they have low debt and have managed through the pandemic. However, he said that it wouldn't be off the table should the company find a very profitable opportunity. He also confirmed that the board hasn't discussed a stock split amid the rising stock price. Dolphin Cove's stock price is up by more than 70 per cent year to date and hit a new all-time high of $17.49 recently.

Though there hasn't been any significant impact due to the rising COVID-19 cases, one cruise line has cancelled its planned visit to Jamaica. The company's Puerto Seco, St Ann location is the only place that hasn't properly recovered seeing that cruise lines have barely started to set sail again. Cruise ships stopovers made up 30 per cent of revenue in the past. Not all of the dolphins have been returned to their original locations.

“We don't expect that huge of an impact that was seen in 2020. The results from the first three quarters of 2021 have shown the resiliency of the company and the capability of being flexible in our operations. We are prepared to respond to any potential impact from omnicron or any other thing that can affect the tourism sector. We do expect to have a better recovery in the first quarter of 2022 according to the confirmed calls that we have with the cruises,” stated Chief Financial Officer Emmanuel Islas in response to questions by shareholders. He revealed that the company's average revenue per customer up to November was US $97.

Islas also noted that the recent $0.40 dividend paid earlier in the month will see part of the accounts receivables being offset with the parent company's dividend payment. The dividend totalled $156.97 million (US$1.01 million) and was higher than the $0.30 paid in March 2020. Dolphin Cove's cash balance grew by 433 per cent since the start of the year to US$2.03 million albeit the growth in the bank overdraft to US $1.01 million. Total assets closed September at US$33.03 million while shareholders equity was at US$28.77 million.

“We're not too sure what is happening at the moment. We'd like to see what's going on with this new variant. We've learnt a lot through the ups and downs of the industry and it's apparent that we've done extremely well through the pandemic,” Burrowes closed.

Chairman Stafford Burrowes leading the meeting.
A nurse shark in her space.
A dolphin rising above the water.
The Dolphin Cove gift shop
The gift shop at Dolphin Cove, Ocho Rios
BY DAVID ROSE Observer business writer

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