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COVID-19 impact | A tough year ahead for multiplexes

Whenever cinema halls open, they will lose peak annual occupancy of 30-38 percent which may not be achievable for both INOX and PVR due to the social distancing norms.

June 11, 2020 / 08:00 PM IST
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With no sign of theatres opening anytime soon, FY21 will be a tough year for multiplex operators like PVR and INOX.

Cinemas are in the third phase of unlocking and according to a research note by Elara Capital, there are no signs of theatres reopening anytime before first week of August. This means that after the complete washout in Q1FY21, cinemas will lose another month.

In addition, whenever cinemas open, they will lose peak annual occupancy of 30-38 percent which may not be achievable for both INOX and PVR due to the social distancing norms.

This is why it is estimated that occupancy will take a hit by 25-30 percent even after cinemas attain normalcy towards the end of the year, if at all, the note said.

INOX, PVR ended FY20 on a weak note

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COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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The two national multiplex chains reported losses for the fourth quarter of FY20.

PVR which reported a revenue decline of 23 percent YoY (year-on-year) saw box office revenue dropping 27 percent YoY. This was largely due to a sharp drop in footfalls by 29 percent YoY to 19.5 million as occupancy levels dipped from 38.6 percent in Q4FY19 to 30.6 percent in Q4FY20.

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Ad revenues declined 22 percent YoY.

For INOX, footfalls declined by 29 percent in Q4FY20 and F&B revenue dipped 24.5 percent at rs 933 million. As for ad revenue, INOX reported a decline of 20 percent.

Silver lining

Big ventures like Akshay Kumar-starrer Sooryavanshi, Varun Dhawan and Sara Ali Khan’s Coolie No.1, 83-The Biopic, starring Ranveer Singh, Kangana Ranaut’s Thalaivi, Lootcase and Chalaang are ready for release are still waiting for theatres to reopen.

During management call, PVR said that 95 percent of films will be theatrical releases only.

There are 59 movies in regional languages that are ready for release, 21 are in post-production and two to three Hindi movies are ready for release.

Elara also estimates that weekday occupancy is likely to jump as crowd will be well spread for viewing throughout the week as work from home will be the new normal for many.

It is expected that occupancy levels may be 45-55 percent for weekends and 25 to 30 percent on weekdays which will result in better utilisation of the property and also improve overall occupancy levels.

Follow our coverage of the coronavirus crisis here
Maryam Farooqui
first published: Jun 11, 2020 08:00 pm

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