PVR Inox earlier this week announced its audited consolidated financial results for the quarter and the 12-month period ended March 31, 2024.
During the last quarter of FY23-24, the company recorded 32.6 million admissions (YoY growth of 7%) with an ATP (Average Ticket Price) of Rs. 233 (YoY de-growth of -2%) and SPH (Spending Per Head) of Rs. 129 (YoY growth of 8%). This led to a 6% increase in ticket sales, a 17% rise in Food & Beverage sales, and a 15% boost in ad sales when compared to the same period last year.
During the year, the company recorded 151.4 million admissions (YoY growth of 59%) with an ATP of Rs. 259 (YoY growth of 8%) and SPH of Rs. 132 (YoY growth of 3%). This led to a 73% increase in ticket sales, a 64% rise in Food & Beverage sales, and a 56% boost in ad sales when compared to proforma figures from FY22-23.
The press release of PVR Inox states:
“Significant volatility was observed in box-office collections during the year. The quarter ended March 2024 was the weakest quarter of the year. While the India box-office in January started off on a decent note with Fighter (Hindi) grossing Rs. 2,550 million, Hanuman (Telugu) grossing Rs. 2,380 million, and month of March saw releases like Shaitaan (Hindi) grossing Rs. 1,760 million, the overall quarter was muted with admissions of 32.6 million. The ongoing general election has also impacted the flow of new releases in the current quarter which is expected to stabilise by mid-June.
“The company has been working hard to achieve the full potential of our merger. Right after the merger was consummated, we had guided for annual EBITDA level synergies of Rs. 2,250 million which will be achieved over 12-24 months. We are happy to update that the integration process has been moving along well and has produced significant operational savings. During the year, we achieved a total EBITDA level synergy of Rs. 1,850-2,080 million. Of this, box-office contributes Rs. 890-970 million, Food & Beverage contributes Rs. 340-400 million, savings on Manpower and other overheads contribute Rs. 620-710 million. While a large part of the merger synergies we had guided for has been achieved in FY23-24, we expect to realise further synergies in FY24-25 as well. The full impact of these synergies would be visible as occupancies improve.
“During the year, the company opened 130 new screens and closed 85 underperforming screens, resulting in net addition of 45 screens. Currently, our screen portfolio includes 1,748 in 360 cinemas across 112 cities in India and Sri Lanka.
“The company generated free cash flow of Rs. 1,158 million during the year and used it to reduce its net debt from Rs. 14,304 million on March 31, 2023 to Rs. 12,940 million on March 31, 2024.
“The company has identified four key strategic priorities for our business which will act as guiding posts for our growth strategy from a medium- to long-term perspective. First, improve 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. Secondly, focus on reducing costs by re-negotiating rentals for operational cinemas, shutting down underperforming cinemas, reducing overhead costs and having a leaner organisational structure. Thirdly, adopting a ‘Capital Light’ model wherein our endeavour is to reduce our annual capital expenditure by exploring alternate models like FOCO (Franchisee owned, Company operated), partnering with developers for jointly investing in new screen capex. Fourth priority is to become net debt free over the next few years. In this context, we are also evaluating monetisation of real estate assets owned by the company and using the proceeds to reduce leverage.”
Commenting on the results and performance, Mr. Ajay Bijli, managing director, PVR Inox Ltd., said, “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.”
It is learnt that after shutting down 85 screens in FY23-24, PVR Inox plans to close down about 75 more underperforming screens in FY24-25.
