India's top multiplex chain PVR Inox said on May 14 that its net loss narrowed to Rs 130 crore for the March quarter from a loss of Rs 333 crore in the year-ago period. However, the company is back in red after two quarters due to failure of big budget Bollywood films at the box office.
Analysts had pegged the company's Q4 loss at Rs 118 crore.
FY24 had started on a slow note for PVR Inox, which reported a net loss of Rs 44.1 crore in the first quarter due to below-average performance of Hindi films, a slow recovery in footfalls and cinema advertising revenue had also affected its numbers.
Tables turned with the multiplex chain reporting a blockbuster Q2 with movies like Shah Rukh Khan's Jawan and Sunny Deol's Gadar 2. But the momentum did not continue and the sluggishness in Q3, when net profit declined 20 percent to Rs 12.8 crore because of fewer hits and a drop in theatrical box office revenue, continued in the March quarter. Big movies like Hrithik Roshan- and Deepika Padukone-starrer Fighter failed to impress the audience. The film, which was expected to earn Rs 300 crore, could only make Rs 200 crore, not even enough to meet its Rs 250-crore budget.
The company's revenue from operations came in at Rs 1,256.4 crore, up 10 percent at Rs 1,143.2 crore from the previous year. It had reported revenue from operations at Rs 1,545.9 crore in the third quarter. Analysts expected a 22 percent quarter-on-quarter decline in revenue due to below-par performance of movies.
Average ticket price of movies in PVR Inox fell to Rs 233 Q4 FY24 from Rs 239 during the same period a year ago. However, ATP was Rs 271 in Q3.
Shares of PVR Inox traded at Rs 1,299, down 1.2 percent at 14:55 PM on the National Stock Exchange on May 14.
PVR Inox has identified four key strategic priorities for business which will act as guiding posts for growth strategy from a medium- to long-term perspective, the company said in a release.
It will focus on improving the profitability of the existing circuit through revenue enhancement by driving box office initiatives like Movie Passport, Cinema lovers day, screening of alternate content like film festivals, live concerts, key sporting and other events.
Next focus will be on reducing costs by renegotiating rentals for operational cinemas, shutting down underperforming cinemas, reducing overhead costs and having a leaner organizational structure.
It will also adopt a ‘Capital Light’ model wherein it will look to reduce annual capital expenditure by exploring alternate models like FOCO (Franchisee owned, Company operated), partnering with developers for jointly investing in new screen capex.
The company's fourth priority is to become net debt free over the next few years. In this context, it is also evaluating monetization of real estate assets owned by the company and using the proceeds to reduce leverage.
"The key strategic priorities as envisaged above, should help the company in charting a new, less capital intensive and incrementally profitable growth path. Our endeavour is to redefine our growth strategy, focus on fixed cost reduction thus improving profitability resulting in enhanced return on capital and free cash flow generation,” said Ajay Bijli, Managing Director, PVR Inox Ltd.
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