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PVR, Inox book profits in Q1 despite Bollywood duds

Advertising, F&B revenues helped multiplex players in registering double-digit growth in the quarter

Urvi Malvania  |  Mumbai 

PVR

It was a mixed bag of a quarter for the cinema exhibition as big releases like 'Tubelight' and 'Half Girlfriend' failed to capture the audiences’ fancy, while 'Baahubali' and 'Hindi Medium' managed to drive footfalls. Both and showed double-digit growth in income from operations, and growth in after tax. It was, however, growth in the advertising and food and beverage (F&B) that gave a boost to its earnings before interest, taxes, depreciation and amortisation (EBIDTA) and after tax (PAT) eventually.

On a comparable property basis, both saw a decline in footfall– by 2 per cent and by 7 per cent. However, footfall improved in the quarter after the installation of new screens by the two multiplex players.

Inox, for instance, witnessed a 2 per cent increase in footfall after it added four screens in the first quarter of FY18. As far as is concerned, footfall increased by 1 per cent after it added around 8 screens in the same period.

 “The failure of Tubelight to perform hit footfall in a major way. In fact, except for 'Baahubali' and a couple of other small budget films, there was no content that left a mark as such. So we had a situation where May 2017 was one of the best months we’ve had, while April and June were very slow,” said Nitin Sood, CFO,

Ancillary for both the saw a healthy growth, as did spends per head. Advertising revenue for grew by 57 per cent, from Rs 21.3 crore to 33.4 crore. In case of PVR, advertising revenue grew by 31 per cent, on a higher base (then Inox) from Rs 51.5 crore to Rs 67.4 crore.
 
F&B for grew 9 per cent from Rs 80.7 crore to Rs 88.2 crore, while saw its income grow by 12 per cent, from Rs 147.5 crore to Rs 164.6 crore, from the segment. The average spend per head on F&B for grew by 6 per cent in the first quarter of FY18, while for PVR, it increased by 10 per cent.

PVR’s PAT was hugely impacted by a one-time increase in employee costs, following an announcement of a wage hike by the state governments in Delhi and Karnataka.

 “The minimum wage hike (announced by the respective governments) was 35 per cent, which meant a huge expense on account of people cost. This led to a slowdown in both EBITDA and PAT,” said Sood.

Siddharth Jain, Director, Group of said: “With the opening of new properties and a continued pipeline of quality content, we hope to maintain the growth momentum in the forthcoming quarters and deliver an unparalleled movie-viewing experience to our patrons, and enhance value for our stakeholders.”
 
Looking forward, both exhibitors hope to make the most of the festive season in the month of August through an array of big releases that will help both players capitalise on the keenness expressed by the audience.

 “While July has been slow with just a couple of significant releases, August has a couple of long weekends and some anticipated titles,” adds Sood.

First Published: Wed, July 26 2017. 22:25 IST
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