Icon times
PVR Ltd Q4FY21 Concall Highlights

PVR Ltd Q4FY21 Concall Highlights

Published on 17 June 2021

Q4 Financial Highlights (on a consolidated basis):

  • Revenue from operations fell at Rs.181.46 Cr in Q4FY21 as compared to Rs.645.13. 
  • Total income for the quarter stood at Rs.263.26 cr over Rs.661.78 Cr in Q4FY21. 
  • Total expensed decreased to Rs.508.07 Cr from Rs.731.84 Cr in QFY20.
  • Profit before tax stood at Rs.-244.81 Cr as compared to Rs.-70.19 Cr in Q4FY21.
  • Net loss stood at Rs.289.12 cr for Q4FY21 over Rs.74.49 Cr in Q4FY21

 

FY21 Financial Highlights (on a consolidated basis):

  • Revenue from operations fell at Rs.280 Cr in FY21 over Rs.3414.4 Cr in FY20. 
  • Total income for FY21 fell at Rs.749.35Cr in FY21 as compared to Rs.3452.23 Cr. In FY20.
  • The segment revenue stood at Rs.696.56 Cr from movie exhibition, 63.57 cr from other revenue such as movie production, distribution, etc, and Rs.-10.78 Cr from inter-segment revenue.
  • Total expenses fell at Rs.1687.60 Cr in FY21 as compared to Rs.3362.1 Cr in FY20.
  • Profit before tax stood at Rs.-938.84 Cr in FY 21 as compared to Rs.89.59Cr in FY20.
  • Net loss stood at Rs.747.79 Cr in FY21 as compared to a net profit of Rs.27.30 Cr in FY20.

 

Key Operational Metrics:

  • Footfalls saw a recovery in the quarter on account of the release of multiple movies and stood at 58 lakh increased by 485% QoQ and fell by 70% YoY basis.
  • The average ticket price stood at Rs.183 vs. Rs.204 and Rs.164 in Q4FY20 and Q3FY21, respectively.
  • Spending per head stood at Rs.95 vs.Rs.96 and Rs.95 in Q4FY20 and Q3FY21, respectively.

 

Cost Control:

  • The company has continued with its strategy of aggressively controlling costs.
  • Delivered reduction of 63% in fixed cost for FY 21 as compared to FY 20. This included a reduction in rent by 79%, CAM by 42%, and all other fixed overheads being reduced by 57%.
  • The company received rental waivers for the lockdown period and significantly reduced rentals for the post lockdown period till 31st March 2021. Given the ongoing 2nd wave, again reached out to landlords for extension of waivers/discounts till business normalizes.
  • All Fixed costs, barring occupancy costs will see a permanent reduction of 10- 15% going ahead.

 

Liquidity:

  • As of 30th April 2021, the company has liquidity of over 750 Cr, which they believe is sufficient to sustain its operations and meet all its obligations.

 

Debt:

  • In FY21, the Net debt stands at Rs.619.73 Cr over Rs.971.34 Cr in FY20.
  • The company is planning to pay its long-term debt in the next four to five years with an average repayment of 200 to 300 Cr per year.

 

Operations:

  • PVR was operating on a 50% seating capacity restriction till mid to end February when these capacity caps were relaxed and saw more film releases. 
  • Southern market contributes around 35% of revenue today and the company has seen a market share increase in Q4FY21.
  • All the screens are shut down as of the date on account of the COVID 2.0 wave and no cinemas are operational due to lockdowns.

 

Covid 19 impact on a single screen:

  • Unlisted multiplexes and single screens would be a hard hit.
  • Management believes 10% of single screens may not reopen in FY22. As the smaller players will not have resources to grow after the pandemic and would want to consolidate with larger players.
  • The bulk of the screen additions will move away from smaller operators to larger operators, who have the capital and the balance sheet to build out new screens and sustain growth over the long term.    
  • Some single-screen operators are using real estate space to earn rent rather than single-screen revenue and some have reduced seats. But it is unlikely that single will convert to multiplex. So, in case a single screen is to shut down totally, that demand is likely to get transferred to a multiplex.

 

Cinema Business:

  • The company remains bullish on the growth opportunity that the cinema business has in India. Globally, pent-up demand for the theatrical exhibition of movies has been witnessed, evidenced by the record-breaking box office collection in countries, where theaters have been allowed to open. China has surpassed 3 billion US dollars in BO collection by mid-April 2021, which is almost equivalent to the entire ticket sales of 2020.
  • Some of the movies that have set the box office ringing globally are “Detective Chinatown 3”, “Hi Mom” in China, “Demon Slayer - Mugen Train” in Japan, “Godzilla vs. Kong”, “Mortal Kombat” and now recently “A Quiet Place II” in the US. South Indian films, “Master”, “Uppena”, “Jathi Ratnalu” etc., Hollywood releases “Tenet”, “Godzilla vs. Kong”, “Wonder Woman 1984”, and Bollywood movies like “Roohi”.
  • For OTT competition, the company believes unlike the US and European market, where pay-per-view is widely accepted. India is not in that category. 

 

Expansion Plans:

  • PVR has added 13 new screens during FY21; an additional 19 screens are completed and ready to commence operations, giving us a total of 842 screens for FY21.
  • The company raised total liquidity of 1600 Cr during the pandemic, which included 1100 Cr of equity and balances 500 Cr from debt.

 

Taxation:

  • Amendments were introduced in the Income Tax Act, 1961, excluding Goodwill from depreciation eligibility. Due to this amendment company can no longer claim the benefit of depreciation on goodwill in its tax books w.e.f April 1, 2020. Following this, the Group has recognized a one-time deferred tax expense of 112.99 Cr.
  • The company follows the old tax regime at an effective rate of 35% now, new tax regime of 25% rate will be adapted after 2-3 years after exhausting MAT credit 

 

Government support through ECLGS Scheme:

  • Under the scheme, any companies which have borrowings over 500 Cr can potentially get six-year funding from various banking partners which is equal to about 200 Cr. 40% of the 500 Cr limits which they had earlier imposed. So the company can additionally raise another 200 Cr of additional liquidity from banking partners.

 

Future Outlook:

  • Management is positive on the quick bounce back strong, after quick recovery in cinema industry seen in International economies that are opening up. Globally there are many examples of strong pent-up demand like the US, China.
  • Hollywood will have a lot of films that will be ready for release. Hindi has got quite a few films that are ready for release which has been waiting because of these endless delays. 24 Bollywood films, 16 regional films, and 16 Hollywood films are in the pipeline as of now.
  • Indian movie release windows will not be impacted as severely as some foreign markets due to heterogeneous markets arising from the presence of Regional, Hindi markets apart from Hollywood releases.
  • International markets opening bodes well for Bollywood, but significant improvement will depend on local recovery from pandemic impact.

 

Attachments
File Name
private article suscription area icon

You like to know more. We like that!

Please subscribe Model Portfolio Plan to get access of all premium model portfolio articles Only at Rs 7499/Year.

LATEST UPDATE

premium Premium
free Free
Read More

REPORTS


Chat on WhatsApp
Caret UP Arrow
InvestYadnya Support
Typically replies in minutes
InvestYadnya Support
Hi there
Welcome to InvestYadnya.
We are available to assist you on WhatsApp.
Please click on the button below to chat with us.
(10 AM to 7 PM IST)
16:10
Chat with InvestYadnya