Revenue Slips as Passenger Volume Dips Due to Hurricane Melissa

  • When Hurricane Melissa swept through the region, its effects rippled beyond infrastructure and into the earnings of tourism-linked companies. The storm disrupted operations at Express Catering Limited (ECL) and also weighed on Margaritaville Turks Limited (MTL). MTL operates in the Turks and Caicos, where Melissa passed as a Category 2 hurricane and dented the company’s topline performance as some cruise ships were forced to divert to alternate routes. Even so, when the dust settled, the companies’ December quarter results told two different stories.
  • For MTL, earnings increased by 27.9% to US$205.36Mn for the quarter ended November 2025. This performance was largely driven by lower costs of sales and administrative expenses, which countered a reduction in revenues.
  • Revenue declined by 13.4% to US$1.65Mn, reflecting a 15.1% decrease in total passenger arrivals at the Grand Turk Cruise Centre. This decline occurred as major cruise lines changed their itineraries and diverted ships to safer regional ports to avoid Hurricane Melissa.
  • However, a 25.5% decline in direct costs to US$384.21Mn outpaced revenue declines, supporting a 177-basis-point expansion in gross margin to 76.7%. Administrative expenses also declined by 15.7% to US$0.98Mn, which further mitigated the revenue decline and supported earnings growth.
  • In contrast, ECL recorded a loss of US$536.68Mn as revenues, which were more severely affected by Melissa, declined and overpowered its cost savings.
  • ECL’s quarterly revenues were cut by 40.4% or US$2.10Mn to US$2.97Mn. Although the company sustained physical damage to its infrastructure, the more significant impact came from damage to major hotel chains and widespread flight cancellations. As a result, passenger traffic through the departure lounge declined by approximately 157,000 compared to the prior quarter, with November accounting for just under 133,000 of the shortfall.
  • In line with its lower revenues, COGS fell by 44.3% to US$803.91Mn, while its operating expenses decreased 13.5%, reflecting lower administrative (-19.0%) and promotional expenses (-83.7%). In aggregate, costs were down US$1.033Mn. However, this was insufficient to counterbalance the significant drop in revenue.
  • While both firms anticipate 2026 to be a challenging transition year due to hurricane-related dips in passenger traffic, their recovery trajectories are diverging. MTL is focused on restoring ship schedules and increasing "spend per head" to offset the revenue shortfall seen in Q2, whereas ECL faces a steeper climb, as winter visitor arrivals are trailing prior years by up to 40%, with normalisation not expected until late 2026.
  • MTL’s stock price has declined by 6.3% since the start of the year to close at $13.44 on Wednesday, March 4, 2026. At this price, the company trades at a P/E ratio of 3.0x, which is below the Main Market Sector average of 25.3x. Meanwhile, ECL’s stock price has declined by 4.9% since the beginning of the year to close at $2.49 on Tuesday, March 4, 2026. At this price, the stock is trading at a P/E ratio of 7.7x, which is below the Junior Market Sector’s average of 19.0x.

(Sources: JSE & NCBCM Research)