Attractions banking on resumption of cruise shipping to come out of red

The Turks and Caicos entertainment and attractions company, Margaritaville Turks has been hit hard by COVID-19, resulting in net losses of US$1.07 million for the last three quarters.

Margaritaville Turks, which is listed on the Jamaica Stock market has seen business being slowed significantly given COVID-19 and the closure of the cruise shipping into the region, as a result of the pandemic. The losses incurred for the three quarters have erased the operating profit of US$617,831 made during the corresponding period in 2020.

For the third quarter ended February 28, 2021, Margaritaville Turks  posted net losses of US$261,014 relative to profit of US$172,520 in the previous comparable quarter. Operating loss for the third quarter amounted to US$261,014 versus operating profit of US$172,520 reported in the prior corresponding period last year.

As a result, gross profit for the nine-month period was nil when compared to US$4.36 million for the comparable period in February 2020. Gross profit for the third quarter closed at nil compared to US$1.46 million for the February 2020 quarter.

99% decline in revenues

For the period under review, revenues tumbled to US$46,606 versus US$5.82 million in the prior corresponding period in 2020. This was represented a 99 per cent decline. For the third quarter, revenues declined by 100 per cent to US$6,155 coming from US$1.96 million in 2020.

In commenting on the slowdown in business, the management has explained that, “the operating status of the company remains on pause since the last report of the November 2020 quarter. There were no cruises into the Grand Turk Port for the third quarter and, as of today’s date, no confirmed timeline has been determined for the resumption of cruising to the port”.

Cost of sales decreased by 97 per cent for the nine-month period to US$46,606 coming from US$1.46 million in 2020, while for the quarter there was a 99 per cent decrease to US$6,155 coming from US$493,644 in 2020. On the positive side, total expenses decreased by 71 per cent for the period under review to US$1.07 million coming from US$3.74 million in 2020.

This contraction was associated with an 80 per cent decline in administrative expense to US$659,239 compared to US$3.34 million reported in the previous comparable period. However, this was tempered by a 29 per cent growth in depreciation and amortization, which closed at US$219,280 from US$169,692 reported in February 2020.

No promotional expenses were booked for the period under review, whereas, for the quarter, total expenses closed at US$261,014, down from the US$1.29 million posted last year.

Banking on the resumption of cruise shipping

The management has acknowledged that the company is banking on the resumption in cruise shipping to come out of the red.

“Since the commencement of vaccination in the last quarter, the cruise industry is in high gear… . The location is in stand-by mode for commencement of cruising activities. All remedial work necessary has been identified and works plans prepared. We are awaiting timelines for commencement of cruising to schedule these necessary works,” the management of Margaritaville Turks has reported.

Margaritaville Turks, as at February 28, 2021, recorded total assets of US$4.18 million versus US$6.09 million in 2020, a 31 per cent decline. This was due to a 100 per cent reduction in ‘Owing by related companies’ which closed at nil.