Release Date: October 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PVR INOX Ltd (BOM:532689, Financial) experienced a 40% sequential increase in box office collections, driven by successful Bollywood releases and international hits.
- The strategy of re-releasing older films contributed significantly to admissions, accounting for nearly 6% of total admissions during the quarter.
- The company generated positive free cash flow and reduced net debt by INR141 crores, despite a relatively soft first half of FY25.
- PVR INOX Ltd added 71 new screens in the fiscal year, demonstrating strong growth momentum.
- The company plans to open around 110 to 120 new screens for the full year, indicating continued expansion efforts.
Negative Points
- Total revenue for the quarter decreased to INR1,642 crores from INR2,020 crores in the same period last year.
- EBITDA dropped to INR207 crores from INR447 crores year-over-year, reflecting a significant decline in profitability.
- PAT decreased to INR22 crores compared to INR207 crores in the previous year, indicating reduced net income.
- The occupancy rate for the quarter was 25.7%, which may suggest challenges in attracting audiences consistently.
- The company is exiting 42 underperforming screens, highlighting ongoing challenges in certain locations.
Q & A Highlights
Q: Why is there a wide range in PVR's share of re-releases, and how many movies are planned for re-release?
A: The range varies because initially, not all exhibitors participated in re-releases, but PVR INOX did aggressively. This trend is now more sustainable, and more exhibitors are joining. Re-releases are planned during lean periods, and they are profitable as they help recover fixed costs. The strategy is ongoing, with more movies planned for re-release in weaker months.
Q: How does the company view the occupancy rate, and what are the expectations for future occupancy levels?
A: The current occupancy rate is around 25.7%, but there is potential for growth. The company is optimistic about future occupancy levels due to a strong lineup of films and improved production consistency post-COVID. The expectation is that occupancy will increase as more films are released.
Q: What is the status of the convenience income and rent expenses, and have there been any changes in agreements?
A: The convenience income saw a smaller drop compared to box office collections due to a one-time payment from IT integration services. Rent expenses remained flat due to renegotiations and cost control measures. Film hire costs for re-releases are lower, contributing to higher gross margins.
Q: What is the company's strategy for underperforming screens and expansion in the South?
A: The company plans to exit underperforming screens and replace them with new locations. In the South, PVR INOX is expanding into smaller towns where new malls are being developed. The focus is on asset-light models, with developers contributing substantial CapEx.
Q: What are the plans for new screens and CapEx for FY26, and how will the mix of property models look?
A: The company aims to add 100 screens annually, with 15% being franchisee-owned and 35-50% asset-light. CapEx is expected to be in the range of INR 400-500 crores, with a focus on renovation and high-performing properties.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
