Facility says audit doesn’t tell whole story
An annual audit revealing the Cayman Turtle Farm has used or budgeted $30 million in government “equity injections” since mid-2010 doesn’t give the full picture or include some significant successes at the facility, farm officials said in a statement released Tuesday.
“The audited financial statements … show a continuous improvement in several key financial performance indicators,” the statement read.
Revenues for the farm, which has been bailed out to the tune of about $9.75 million by government over the past four years, have increased in several key areas. According to the farm, tours sold to cruise ship passengers went up by 13 per cent in the 2011/12 budget year compared to the previous year. Overall tour revenues increased by 7.4 per cent during the same time. Food and beverage sales as well as gift shop revenues both increased by more than 10 per cent during the year.
Revenues from turtle meat sales went up 16 per cent. The installation of a water slide in one of the park’s lagoon’s in December 2011 been a boon to the park, officials said.
“The farm’s total cost-of sales to revenue ratio improved,” the farm statement noted.
The tourism facility is also reducing the debt it is carrying from a significant expansion that began a decade ago. The borrowings, once totalling around US$54 million, have been reduced to CI$24 million by the end of the 2011/12 fiscal year.
Of the “equity injection” paid during the budget year, about $6 million went to retire debt from previous loan payments. About $3.3 million went to cover annual operating expenses.
The farm also cited an increase in egg production and hatch rates over the year. Hatch success rates went from 7.3 per cent to 11.1 per cent, while egg production increased 13 per cent over the 2010/11 budget year.
Nesting turtles coming to Cayman have also seen an increase over the past decade, according to farm officials.
“There is an upward exponential trend in the number of sea turtles nesting in Cayman, with the greatest increases being in green sea turtle nests,” the farm statement read.
An audit completed by accounting firm KPMG and reviewed by the Cayman Islands Auditor General’s Office put the government’s equity injection during the 2010/11 year at $9.85 million and $9.7 million for the 2011/12 year.
The projected equity injection for the 2012/13 budget year is set at $10.5 million, although it’s not certain whether the farm will spend all of that cash through the end of the year on 30 June, 2013.
The massive amount of government funding required to sustain operations at the Turtle Farm was a subject of “going concern”, according to auditors.
“Cost overruns of the development of the park, lower than projected visitor numbers and operating costs in excess of initial budgets have given rise to significant business risks that cast uncertainty over the company’s ability to continue …” according to the auditor’s review.
The issues referenced by auditors resulted in the farm being unable to discharge its obligations without access to lending facilities or government equity injections.
“Furthermore, operational results subsequent to 30 June, 2012, indicate that the company continues to generate significant losses from operations and experience cash flow difficulties,” auditors noted.