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PVR continues to be cautious, CEO says costs to be kept on a tight leash in FY22

To tide over the second period of lockdown, PVR cannot let costs go up this year, says CEO Gautam Dutta.

May 19, 2021 / 08:46 PM IST
PVR | Societe Generale acquired 10,01,813 shares in company at Rs 1,519.52 per share on the BSE. However, Multiples Private Equity Fund sold 3,01,309 shares at Rs 1,517.54 per share and Multiples Private Equity Fund I 8,78,153 shares at Rs 1,517.91 per share.

PVR | Societe Generale acquired 10,01,813 shares in company at Rs 1,519.52 per share on the BSE. However, Multiples Private Equity Fund sold 3,01,309 shares at Rs 1,517.54 per share and Multiples Private Equity Fund I 8,78,153 shares at Rs 1,517.91 per share.

 
 
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After reopening PVR screens in October last year, little did the multiplex operator know that they would have to shut down again due to the pandemic.

During Q3 FY2021 earnings call, the company had said that they have confidence that the second or third wave of COVID-19 would not come back and that there wouldn't be lockdowns again.

However, the rising cases of coronavirus this year led to cinema closures, making things tough for exhibitors once again.

To tide over the second period of lockdown, PVR's CEO Gautam Dutta said that the company cannot let costs go up this year.

"We are on a very tight leash this year. All costs that can be controlled starting from rent, common area maintenance (CAM), and HR (human resource) cost are being controlled. We all are on salary cuts. And going forward as well there is a huge amount of awareness to the fact that we cannot let cost go up," Dutta told Moneycontrol.

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While discussing the Q3 FY21 results, the company had mentioned that PVR had sought rent and CAM waiver from the landlords for the period they were shut and some kind of rebates post-opening till March 31, 2021, till the time they anticipated the business will take time to come back to normal.

The company had closed out settlements with almost 88 percent of the landlords and was able to get large rental waivers and discounts in rent and CAM charges not only for the period of lockdown but post-opening till March 31, 2021," PVR's Chief Financial Officer Nitin Sood had pointed out.

Reopening will be with caution

Talking about reopening, whenever theatres would be allowed this year, Dutta said that PVR will open the cinema with not more than 50-55 percent HR headcount. "We will slowly ramp up only after seeing the situation. Movies too shall take a couple of weeks after we start opening to start coming in."

Confident about the south region especially after the performance of films like south superstar Vijay's Master, Dutta said that regions like south will see immediate ramp-up because occupancy is very high there and food sales are high. "So, I see no reason why we would want to hold back there but in other regions where Bollywood may take time our cost will go in line with the release schedule and how the business unfolds."

When PVR had reopened last year in October, it was only in the south region where the multiplex operator had added more people as the occupancy was high. Dutta said that occupancy was hovering around 60 percent in south in PVR cinemas. However, that was not the case in other regions and PVR was running one shift and four shows, said Dutta.

This way in the quarter ended December 31, 2020, PVR's fixed cost reduction was 63 percent as compared to Q3 of last year.

"We have been controlling our cost at every possible level and going forward we are going to be even more cautious and make sure that the cost is not allowed to swell up disproportionately to the business or film releases that are happening," he added.

Along with focusing on cost control, the company is also looking at vaccinating its employees.

"About 34 percent (employees) have got vaccinated. We should be upwards of about 60 percent vaccination subject to availability of the vaccines," said Dutta.
Maryam Farooqui
first published: May 19, 2021 08:08 pm

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