Dolphin Cove Limited has been slapped with a tax assessment of J$91.8 million for last year.
“The company has been notified of a decision of the Revenue Appeals Division that the assessment for J$91.8 million, referred to in Note 26 (b) (i) of the audited financial statements for the year ended December 31, 2022, is confirmed,” Dolphin Cove advised the Jamaica Stock Exchange (JSE) in a regulatory filing yesterday (May 18).
Interestingly, the assessment, as determined on appeal, is exclusive of any interests or penalties that may apply. As such, the tax liability could be much more if the tax authorities decide to apply penalties.
Able to cover tax liability
Dolphin Cove says it, “is in a position to discharge any liability arising from the assessment without adversely affecting its operation as the leading entertainment facility in Jamaica.”
The tourist attractions company is now awaiting legal advice in connection with the decision to determine its next move.
Based on the 2022 audited financial report, the company’s tax liability is US$614,919, which when converted to local currency is the equivalent of J$91.8 million. Dolphin ended the year with profit of nearly US$3 million, the largest profit in its history, even without the tax benefit, which expired in 2020.
The company ended the year with a strong balance sheet, net working capital increased nearly US$800,000 year-over-year, driven mainly by the good collections. In 2022 Dolphin Cove reported US$15.1 million in revenue, up US$7.5 million or 99 per cent compared to 2021 and US$0.2 million or two per cent in 2019.
The revenue was driven by two factors, namely the recovery of cruise ship business and improved efficiency in sales and the strategic investments in renovation work and addition of in-park sales. On the other hand, all permanent efficiencies achieved in the beginning of the pandemic and the strict discipline in the use of resources resulted in a US$1.3 million decline in operating expenses to US$9.1 million in comparison to 2019, even with same number of visitors and volume of business.
Dolphin Cove ended the year with US$1.6 million in cash and was able to allocate US$1 million in a short-term investment facility even after the capital expenditure exercised during the year and the payment of two dividends of 40 cents each.
Dolphin Cove Limited is incorporated and domiciled in Jamaica and its registered office and principal place of business is located at Belmont Road, Ocho Rios, St Ann. The principal activities of the company are the operation of marine parks and ancillary operations such as adventure programmes, restaurants, gift shops and photography at several locations in Jamaica.