Multiplex operator PVR that posted its December quarter results on January 19 said, its merger with INOX will be completed within FY23.
The company reported revenue of Rs 26,556 million, EBITDA of Rs 3,619 million, and profit after tax (PAT) of Rs 369 million.
The merger received a nod from National Company Law Tribunal (NCLT ), Mumbai Bench through a verbal order on January 12.
"We are waiting for the written (NCLT) order which is expected to come by mid-February. The merger will be completed by mid-February," Sanjeev Kumar, Joint Managing Director, PVR Limited told Moneycontrol.
The company expects to complete all the legal formalities with respect to the proposed merger including the issue of PVR shares to Inox shareholders within the next 45 days of receipt of a certified true copy of the order passed by NCLT, said PVR.
“With the verbal approval for the merger coming through from
NCLT, we are tracking well within the projected timelines for the closure of the transaction. We intend to complete all the formalities within the current financial year,” said Ajay Bijli, Chairman cum Managing Director, of PVR.
The company said that the expected date of receipt of a certified true copy of the NCLT order is between January 25-31.
Performance in the December quarter
On the company's Q3 performance, Kumar said that due to the weak performance of Hindi films like Cirkus, the growth in Q3 was lower than expected.
"Admission is slightly lower than Q1. While Drishyam 2 and Avatar 2 overperformed, Cirkus did not perform well and that was disappointing."
PVR recorded 22 million admits in Q3 FY23, 16 percent down from 26 million in Q3 FY20 (pre-pandemic).
"Our recovery in terms of footfalls is 75 percent of pre-pandemic level. FY20 was becoming one of our best years up until March but then we had to shut down. We had 100 million admissions but clearly, we haven't reached there yet. It (footfalls) will get better in the coming financial year," said Kumar.
On other metrics, the joint MD said that for average ticket price (ATP) and spend per head (SPH) there has been 16 percent and 30 percent growth respectively from Q3 FY20. "There will be marginal growth now in ATP and SPH. The increase was more so far because we were shut for two years. It is just making up for that time and adjusting for inflation," he added.
Ad income
On cinema advertising, Kumar said ad income has been a laggard. "We are 40 percent lower than pre-pandemic levels. We will get better ad income in next financial year."
He added that south Indian cinemas have performed the best on all parameters including ad income because of strong box office numbers and this automatically attracted advertisers. Ad income has been steadily growing in the southern market, he said.
Movies not doing well is affecting ad income, said Gautam Dutta, CEO, of PVR Limited. "We see recovery getting better once we start next financial year. It is a matter of big films doing well as a lot of media buying happens on big films. When the big films don't work the ad market is disappointed. Drishyam 2 and Avatar 2 did well and we were able to garner good ad numbers," he told during the Q3 earnings call.
Kumar noted that if Ranveer Singh-starrer Cirkus had performed well the growth numbers would have been better in Q3.
2023: Hindi film business comeback
On an industry level, the box office business was impacted due to the underperformance of Hindi films and the low availability of English films. Hindi box office collections were down 28 percent in 2022 at Rs 3,481 crore versus Rs 4,817 crore in 2019. Number of Hindi films released last year was also down by 22 percent to 138 Hindi movie releases from 178 releases in 2019.
When it comes to Hollywood, box office collections were down by 24 percent at Rs 1,249 crore in 2022 from Rs 1,642 crore in 2019. Number of English film releases was down by 42 percent to 113 last year from 195 in 2019.
On the other hand, regional films outperformed with a 30 percent increase in box office collection last year at Rs 5,830 crore from Rs 4,489 crore in 2019. Number of regional film releases also increased by 17 percent from 1,149 last year to 979 in 2019.
"Regional outperformed not only in Q3 but in all quarters this (financial) year. Southern movies have done very well. Kannada language film Kantara did exceedingly well in Q3," said Kumar.
While the success ratio of original Hindi films has been low, the Hindi dubbed versions fared well, said Kamal Gianchandani, CEO, of PVR Pictures.
"Admissions in 2022 versus 2019, the decline has been for original Hindi films while dubbed Hindi content has worked and regional is the same or grown. Kannada film industry had a landmark year in 2022," he added.
Gianchandani further said that quantity has been an issue when it comes to original Hindi films. "In our conversation with producers, the quantity will improve in a noticeable manner in FY23-24."
Kumar said that all eyes are on Shah Rukh Khan-starrer Pathaan which is all set to release on January 25. "Hope it emerges as the biggest blockbuster of Q4. The advances are looking very encouraging."
He also said that the Hindi film business recovery is expected in 2023. "We have three Shah Rukh Khan films, two films by Ranbir Kapoor and Kartik Aaryan each. The lineup is exciting. (We are) confident that Hindi films will make a comeback in 2023," said Kumar.
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