PVR beats Q3 estimates with high revenue growth, turns EBITDA positive

Indian multiplex companies, which were among the hardest hit during the Covid-19 pandemic due to lockdowns and forced shutdowns, had seen their shares get another battering as concerns about the spread of the Omicron variant and its impact on the business mounted.

However, financial numbers for the third quarter show they have been much better placed and beat street expectations for both revenue and operating profit.

PVR, in particular, reported a net loss of just Rs 10.5 crore, half of what the street was expecting. The firm had reported a net loss of Rs 49 crore a year ago.

The company reported total revenue of nearly Rs 710 crore including numbers generated from rent concession. Operational revenue came at Rs 614.15 crore as against analyst expectations of around Rs 500 crore. The country’s top theatre chain had posted operational revenue of just Rs 45.4 crore and total revenue of Rs 320 crore in Q3 FY21.

PVR said that given the low severity and high transmission of the Omicron variant, along with various state governments’ reluctance in completely shutting down cinemas, it expects the recovery to be much faster this time as the number of cases reduce over the next few weeks.

After adjusting for the impact of IND-AS 116 on leases, consolidated revenue, EBITDA and profit after tax of PVR was Rs 642.3 crore, Rs 66.2 crore and (-) Rs 21.9 crore, respectively. This compares with Rs 63.4 crore, (-) Rs 108.8 crore and (-) Rs 136.6 crore for Q3 FY21.

Other Key Highlights:

1) PVR’s rent concessions for the quarter came at Rs 75.2 crore, of which 67.42 crore was booked as other income.

2) Q3 was the best quarter for PVR since March 2020 when the business was adversely impacted on account of the pandemic.

3) It saw continuous improvement in financial metrics on a month-on-month basis and stopped burning cash after six continuous quarters.

4) PVR generated 23.7% positive EBITDA margin in the month of December 2021.

5) During the quarter, PVR opened its flagship 7-screen multiplex cinema and India’s first drive-in rooftop theatre in Mumbai, taking total additions since April to four properties with 18 new screens across the country.

Management commentary

Ajay Bijli, Chairman and Managing Director of PVR Ltd, said: “The strength and agility of our business was demonstrated during the last quarter. The pace with which the business recovered from October to December, validates that as soon as new content was made available, our patrons came back to the cinemas.”

Bijli said the success was seen across all genres of content, from Bollywood to Hollywood and even regional cinema.

“Had the last week of December not been impacted by Omicron and the ensuing restrictions we would have closed with even better numbers for December,” he said.

“We continue to remain extremely bullish on the long-term prospects of the business and will continue to invest and innovate in bringing richer and more experiential formats for our audiences,” he added.