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Inox Leisure Q4FY21 Earning Call Highlights | Yadnya Investment Academy

Inox Leisure Q4FY21 Earning Call Highlights | Yadnya Investment Academy

Published on 11 June 2021 Views 58 Comments 0

Financial Highlights (on a consolidated basis, without Ind AS 116):    

  • Revenue was Rs.119 Cr in Q4FY21 as compared to Rs.376 Cr in Q4FY20
  • EBITDA was at Rs.-60 Cr in Q4FY21 as compared to Rs.40 Cr in Q4FY20. 
  • PAT is at Rs.-74 Cr in Q4FY21 as compared to Rs.-2 Cr in Q4FY20. 
  • For the full year, FY21 revenue was Rs.148 Cr as compared to Rs.1915 Cr in FY20. 
  • EBITDA is at Rs.-204 Cr in FY21 as compared to Rs.347 Cr in FY20.
  • PAT is at Rs.-257 Cr in FY21 as compared to Rs.141 Cr in FY20.
  • In 4QFY21, INOX received Rs.240mn as a settlement towards an insurance claim filed in FY20 that constituted the big spike in other income.

 

Key Metrics Highlights:

  • The footfall was 34 lakhs in Q4FY21 as compared to 128 lakhs in Q4FY20. 
  • Occupancy at 10% in Q4FY21 as compared to 24% in Q4FY20.
  • Average ticket Price at Rs. 172 in Q4FY21 as compared to Rs. 202 for Q4FY20. 
  • Spend-per head has remained the same at Rs. 78 on a YoY basis. 
  • For the full year, FY21 footfalls are 38 lakhs as compared to 660 lakhs in FY20. 
  • Occupancy was at 8% in FY21 as compared to 28% in FY20. 
  • Average Ticket Price at Rs.170 in FY21 as compared to Rs.200 in FY20 
  • Spend per head is at Rs.77 in FY21 compared to Rs.80 in FY20.

 

Cost Control:

  • Employee benefits expense including agency manpower has gone down from Rs.67.5 Cr to Rs. 37 Cr in this quarter.
  • Power and fuel, and R&M expenses have decreased from Rs. 32.3 Cr in Q4 FY2020 to Rs.24.1 Crore in this quarter.
  • Rent and CAM decreased to Rs.67.2 cr in Q4FY21 over Rs.82.7 Cr in Q4FY20.
  • Other overheads decreased to Rs.20.5 Cr in Q4FY21 over Rs.35.6 Cr in Q4FY20.

 

Covid 19 Impact:

  • There was an impact on revenue in Q4FY21 due to the staggered permission given by the government for 100% capacity utilization. Additionally, there was a lack of consistent and notable movie releases, which affected the performance.
  • Due to the second wave of covid, several states have shut down cinema halls, resulting in the closure of 97 Inox properties with 424 screens. Owing to the unavailability of content, 33 INOX properties with 116 screens have been shut voluntarily. At present, Inox is operating with 23 properties and 108 screens.
  • From the demand perspective, the single screen the average ticket size is much lower whereas multiplexes will be much higher.
  • Out of 9600 screens nationally, 6,000 had opened and for multiplexes, out of 3,000 multiplexes, 2,300-2,400 multiplexes opened. It is expected that 10% of the total screen will shut down permanently. Going forward, only multiplexes will be opened due to various advantages –

1. Ease of programming and financial strength 

2. With 10-12 movies releasing every Friday, the ability of a successful       movie release to compensate revenue of an unsuccessful movie. 

3. Staggered show timings.

  • Advertisers will return with improvement in footfalls, which should be driven by new movie releases.
  • The company has approached the landlords to re-negotiate Rent & CAM. Even in properties where Inox has shut down its properties voluntarily due to unavailability of content, landlords have responded positively in most cases.
  • Inox has signed with Zomato and Swiggy to sell cinema food on those platforms. INOX stated that it aims to make this business a separate revenue stream over some time. It is also exploring a menu that is different from the In-Cinema menu and different packaging to further develop this business.
  • Producers and distributors have deferred their releases scheduled in Q1FY22, and the majority of the producers and distributors are in favor of releasing their movies on the big screen. Even after the situation normalizes, Hindi content will not be released immediately because movie releases will require a marketing campaign of 4-5 weeks. With the 2nd Covid wave tapering off globally, marketing will not be a barrier for Hollywood content and it will readily available.

 

Expansion Plans: Expansion plans have only been deferred and not been canceled.

  • In FY2021 the company added 5 properties with 17 screens and 2335 seats. 
  • In FY2022, they added another property in Bengaluru with five screens. 
  • Additionally, the company is planning to open five more properties with 19 states wherein 90% of work has already been completed. 
  • Another 25 screens are in pipeline, the opening of which depends on the circumstances, getting normal.

 

CAPEX Plans:

  • Additional CAPEX of ₹8 to ₹10 Cr is required to complete 10% of the work.
  • INOX has passed an enabling resolution to raise to ₹300 Cr
  • INOX owns 6 cinema properties and a head office and as per the current market valuation, if required, the company can raise ₹350 Cr by doing a sale-leaseback. But this is likely to be a last resort move.

 

Liquidity Position:

  • Liquidity of more than ₹130 Cr which includes undrawn limits of ₹87 Cr.
  • The operational cash burn (excluding CAPEX) was Rs.2.6bn in FY21 (including about Rs.0.4bn in interest payments). Capex per screen is in the range of Rs.20mn- 25mn based on the location of the property. It is higher for a high-end property.

 

Debt:

  • As of April 25, 2021, gross debt was ₹103 Cr and net debt was only ₹55 Cr.

 

Other Updates:

  • There are about 24 movies in Hindi, which are ready about 19 in English and about 23, 24 in other Indian languages.
  • INOX believes that 8 weeks exclusive windowing period should be adhered to since it is beneficial for the entire value chain. Based on the performance of the content released in cinemas, producers and distributors can further sell their content to OTT platforms. 
  • INOX stated that it keeps on changing ticket prices regularly, depending on the cost structure of the property, movie type, and paying propensity of the customers. There are different pricing strategies in place for different times of the day and different days of the week. INOX seeks a balance between ATP and footfalls. It doesn’t drive additional footfalls at the cost of lowering its ATP.

 

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