Loss-Making Screens and Malls with Limited Revival Potential Affected
PVR Inox, the merged entity of PVR Ltd and Inox Leisure Ltd, has announced plans to close around 50 cinema screens within the next six months. These screens either operate at a loss or are located in malls that have reached the end of their life cycle and are unlikely to revive. The decision comes as the company reported its quarterly results, including an accelerated depreciation charge and writing off the written down value of assets.
Pandemic Impacts Post-Merger Revenue of PVR Inox
The merged entity, now named PVR Inox Ltd, faced significant challenges due to the COVID-19 pandemic’s impact on the film exhibition business. As a result, the combined revenue of PVR Ltd and Inox Leisure Ltd fell below ₹1,000 crore, which exempts them from seeking approval from the antitrust regulator. The company reported a wider loss of ₹333 crore in the March quarter compared to ₹105 crore in the same period last year. However, revenue from operations increased to ₹1143.17 crore from ₹536.17 crore in the year-ago period.
Successes and Disappointments in Hindi and Hollywood Releases
The first quarter of the year saw a mix of successes and disappointments in film performances. Shah Rukh Khan-starrer “Pathaan” and “Avatar: Way of Water” performed well, contributing to a promising start. However, lackluster performances from some Hindi films in February and March led to a decline in admissions. Hollywood releases like “John Wick: Chapter 4,” “Antman and the Wasp: Quantumania,” “Shazam 2,” and “Creed III” fared decently at the box office. Regional language films such as “Varisu” and “Thunivu” in Tamil, “Waltair Veerayya” in Telugu, and “Ved” in Marathi achieved significant box office collections.
Integration Process Proceeding Smoothly, Operational Synergies Expected
Looking ahead, PVR Inox expressed optimism for the future and believes that the challenges faced in the previous fiscal year will ease in FY24. The underperformance of Hindi films and limited Hollywood releases were identified as key factors impacting the industry. The recently completed merger with Inox is seen as a significant milestone for both the company and the Indian film industry as a whole. The integration process is progressing smoothly, and PVR Inox aims to achieve operational synergies of ₹225 crore over the next 12-24 months, according to Ajay Bijli, the managing director of PVR Inox Ltd.