Aiming at 25% revenue growth in FY13: PVR

PVR posted net sales of Rs 117.2 crore in the quarter ended 31 March, up 32% (y-o-y). However, the company recorded a fall in EBITDA margins at 3.6% in Q4FY12 against 20.2% in the corresponding quarter last year.

In an interview with CNBC-TV18, Nitin Sood CFO, PVR said that the company’s bottom-line was affected due to a one-time exceptional charge of Rs 21 crore. However, the operating EBITDA for the fourth quarter of FY12 has seen strong growth, said Sood.
With a fairly optimistic outlook on Q1FY13, Sood believes that it looks like a strong quarter with the line-up of movies. The company's exhibition business was up 20% in FY12 and according to Sood, PVR's core operating business looks fairly strong. PVR is targeting an overall revenue growth of 25% in FY13. Below is the edited transcript of the interview on CNBC-TV18. Also watch the accompanying video. Q: What is the way around with the kind of knock you have taken on your bottom-line and EBITDA? Is there a plan to cut down the rent cost and what kind of improvement do you expect to see, especially on the EBITDA line through FY13?
A: Just to update our Q4 numbers - we took a one time extraordinary hit on service tax on lease rentals amounting to about Rs 21 crore out of which Rs 14-Rs 15 crore pertains to the previous financial year. The matter is still under litigation in the Supreme Court. But, we have taken a view on conservative basis. Due to this exceptional charge,  the quarterly numbers are looking low.
If you have to exclude that and look at the overall operating performance, it has been very strong. We have had more than a 30% same store growth on footfalls, on a full year basis. Our exhibition revenues are up by 22%, our core operating EBITDA has shown a very strong growth and the PAT for the full year is about Rs 26 crore compared to just about Rs 30 lakhs last year.
It has been a significant improvement. We have got about 25 million people to our theatres this year for watching films. The core operating business is looking fairly strong. Q: What do you hope to do in that case on the revenue side in Q1? If you could just break that up between exhibition and production, because exhibition has been strong but production revenues have slipped.
A: I think it is in line with the guidance that we had given earlier saying that we are going to slowdown our production foray. We have one film, Shanghai, which is currently on the floor and releasing on June 8. After that we have no further plans in the immediate future to do any more productions.
The core of the business is going to be on building and rolling out new cinemas and improving the core operating performance of existing cinemas. We have about 173 screens today and adding another 75 screens during this year. That is almost like a 50% capacity addition for us this year and it is looking fairly good. Most of these screens are in advanced stages of construction and will be coming out during the course of the year. Q: Also your finance cost have gone up about 24-25% this quarter. Is that a trend that is likely to continue going forward as well? Is there some movement there?
A: Finance cost will be marginally higher to what they have been. This will be for funding part of the capex required for the new screens that will be rolling out. But it would not be significantly higher next year because we have strong internal accruals as well to fund a large part of our expansion. I don't see a material change there. Q: On the movie exhibition business, the revenues have grown quite significantly but on an EBITDA level, it is still making a loss. Is that something that looks to be turned around this quarter or perhaps going forward?
A: Q4 in our business is traditionally slow because of the examination season and February-March see very few big releases. I think that is a trend of the quarter. But, as I mentioned, there is an exceptional hit of about Rs 14 crore that we have taken for service tax of previous financial year. It has also impacted the EBITDA and getting reflected in the EBITDA.
Apart from that, I don't see any area of concern. Q1 is looking fairly strong. We have a very good line up of movies coming up this year. April and May trends have been very encouraging, same-store growth in footfalls is looking in double digits which is very promising. Q: What kind of guidance could you give us for Q1 or even FY13?
A: On a full year basis, with the new screen additions that we are looking at this year, we are approximately looking at a 25% growth in our overall revenues. That is the kind of guidance that we are giving. These screens, when they become fully operational, fully mature in the following year, the growth number will also look significantly higher.