Q1 2021 financial report V1 8 May 21

Q1 2021 financial report V1 8 May 21

Q1-2021 FINANCIAL PERFORMANCE

I S SUED MAY 2 0 2 1

F I NANC I A L REPORT | Q 1 - 2 0 2 1

SUMMARY RESULTS

Q1 2021 VS. Q1 2020

11.7 per cent increase in revenues 3 per cent decrease in expenses

Net Surplus (before & after Depreciation) up by 93 per cent and up by

201 per cent respectively

Depreciation up by 1 per cent

Cash balance up by 35.7 per cent

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F I NANC I A L REPORT | Q 1 - 2 0 2 1

2021 | A YEAR OF RESILIENCE

The DOSC Board and Management continues to work hard to leverage emerging opportunities, such as an increased focus on local experiences as ongoing travel restrictions remain in place in many countries around the world, coupled with a burgeoning consumer preference for healthier outdoor activities. While we hope for the best going forward, we must also be aware that the situation remains uncertain. We are as yet unable to confidently predict the trajectory of the operating and financial environment over the coming months. In order to minimise risk and maintain robustness, the DOSC Board and Management remains focused on cash and cost discipline.

Last year, the onset of COVID 19 necessitated rapid adaptation to new socio-economic forces that affected the operating environment and caused widespread disruption to mobility, retail and supply chains. In response to the pandemic, the DOSC Board and Management were quick to roll out critical measures in a disciplined manner to protect its status as a non- profit civil organisation; these measures were developed in line with the guiding

principles set out by the DOSC Governance and Strategy 2030.

One year on, the pandemic continues to impact the Club’s operating and financial environment. There are, however, some positive signs of recovery.

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F I NANC I A L REPORT | Q 1 - 2 0 2 1

REVENUE HIGHLIGHTS

2020 – this is a key performance indicator that effectively highlights the Club’s continued operational efficiency. During the period, depreciation increased only by 1 per cent year on year, while the net surplus after depreciation was up by 201 per cent year on year, mainly due to the significant increase in Sailing and Marina activities.

Total revenues increased by circa 11.7 per cent year on year, which can be attributed to the resilience and adaptability to the new socioeconomic environment exhibited by DOSC over the period. F&B, which contributed slightly more than half of the total revenue, was up by 5.5 per cent year on year, along with an increase of around 2.8 per cent in footfall in comparison to the same period in 2020. The Club witnessed a sharp decrease in footfall in Q2 2020 onwards due to lockdown restrictions coming into place. Revenue generated by the Club and Sailing School activities, which together represented 43 per cent of total revenue, were up by 1 per cent and 45.2 per cent respectively year on year. There is a continued uptick in demand for dinghy lessons, dinghy hire and, since Double Knot came back onto the water and into operation in the first quarter of 2021, cruising courses. Similarly, revenues generated by Marina activities showed a 19.1 per cent increase year on year, largely due to the Club’s expanded and improved marina services. Overall, the Club posted a net surplus before depreciation of plus 93 per cent when compared to the same period in

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F I NANC I A L REPORT | Q 1 - 2 0 2 1

EXPENSE HIGHLIGHTS

DOSC aimed to maintain a discipled policy on cash and cost management, while selectively investing in Club and sailing facilities, and infrastructure.

Starting in the first quarter of 2020, DOSC took tight control over operational and capital expenditure to ensure cash preservation. As a result, expenses decreased by 3.1 per cent in comparison to the same period last year.

Major expenditures during the period included staff medical insurance and DOSC's comprehensive all-risk insurance, VAT payments, advance payment for kitchen upgrades, advance payment for Double Knot’s keel structure, crew kits and a beach upgrade.

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F I NANC I A L REPORT | Q 1 - 2 0 2 1

CASH-IN-THE-BANK POSITION

DOSC's cash balance increased by 35.7 per cent, compared to the same period in 2020. This is primarily due to discretionary deferral of capital expenditure, improved cash generated from operations, and working capital performance. As of March 2021, DOSC's current total cash balances more than adequately cover its liabilities (by 1.5x). This gives us a comfortable buffer with which we can maintain and develop the Club's facilities and infrastructure. Most important of all, it also enables us to continue to make a significant contribution to the sport of sailing in the United Arab Emirates, in line with the DOSC Governance and Strategy 2030.

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F I NANC I A L REPORT | Q 1 - 2 0 2 1

TREASURY ACTIVITIES

The DOSC Board and Management has focused on achieving further transparency, control and improved efficiency across all treasury activities, in line with the DOSC Governance and Strategy 2030. As part of our commitment is the communication of DOSC's financial performance to the Membership on a quarterly basis. This quarterly report is based on DOSC's internal management accounts rather than audited numbers; on that basis, trends are used to reflect financial performance, as opposed to numbers. Moving forward, continued forecasting will ensure that the Club retains sufficient flexibility and readiness to

face and overcome any challenges. In what continues to be a rapidly changing environment, it is difficult to predict how the operating and financial environment will evolve in the coming months. Therefore, the treasury's priorities will continue to focus on cash and cost management in order to preserve cash and reduce discretionary capital expenditure. At the same time, we aim to provide the best possible experience for our Members and their Guests within the required health and safety parameters as set out by the UAE government and relevant governing bodies.

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