PVR, the country’s biggest chain of multiplex cinemas by far, indicated that the worst was behind for the company, as customers started trickling back into theaters in November and December.
Nevertheless, the pace of recovery continues to be very gradual. For the three months ended December, PVR’s operations generated revenue of Rs 45.40 cr.
This is higher by about Rs 5 cr, or 12%, compared to the preceding three months (July-September 2020).
However, the operating revenue of Rs 45.40 cr represents a decline of over 95% compared to its revenue in the same three months of 2019.
Indeed, for the nine months from April 1 to December 31, the company recorded operating revenue of just Rs 98.55 cr, a decline of 96.4% over the same nine months of 2019.
Compared to the previous year, the company has lost revenue to the extent of Rs 2,671 cr due to COVID-19 during the first nine months of the current financial year (April-December 2020).
Against this, it was able to extract rent concessions of around Rs 369.21 cr from its landlords during the same period.
It was also able to save another Rs 160 cr by slashing employee expenses in half during the same nine month period, compared to the corresponding period of 2019.
However, salary cuts for frontline staffs have been reversed in line with reopening of states, the company said, adding that cuts for corporate and other staff are also being rolled back in a staggered manner.
It was also able to save Rs 541 cr under the head of ‘other expenses’ during the nine month period through cost cutting measures.
Given that the exhibition halls remained more or less closed during the entire nine month period, it was also able to reduce its ‘movie exhibition cost’ — comprising primarily payment to movie producers — by 99%, or Rs 583 cr.
However, these savings were not enough to offset the decline of Rs 2,671 cr in its revenue, and the company recorded a net loss of Rs 458.67 cr for the nine months. During the same nine months of 2019, PVR had net profit of Rs 101.79 cr.
The company has a total of 835 screens. Out of this, it said it has closed rent negotiations for 88% of its properties.
Discussions are on with the remaining landlords and are expected to close in the near future, it said. Some of the properties have not been reopened in view of the negotiations, it pointed out.
” We are yet to re-open 56 screens in 13 cinemas, as of 15th January 2021, since certain rental negotiations are currently on-going with the mall developers, landlords, lessors and partners.”
It said it has sought rental waivers worth Rs 32 Cr for the lockdown period in case of properties where rental negotiations with landlords are not concluded.
Chairman and MD Ajay Bijli said the Tamil film industry has taken the lead in trying to normalize the situation.
“After two quarters of successive lockdown, we are delighted to have welcomed back our patrons to our cinemas. Consequent to being deprived of the most affordable and engrossing form of entertainment, we believe our audiences’ desire to revisit cinemas is strong and there is significant pent up demand that will help our business recover,” he said.
He pointed out that producers are being cautious with movie releases, given the staggered reopening of movie theaters across states and existing restrictions on seating capacity
Hindi film producers have withheld release of big budget movies and are likely to announce the release dates over the next few weeks with the evolving situation, he said, adding that some of the low-mid size Bollywood movies, stronger Hollywood and diverse regional content has started flowing to the screens.
“The South Indian film industry had led the way in terms of release of blockbuster content and the initial performance of Tamil movie “Master” indicates that the customers are ready to revisit their favourite cinemas if the high quality content is available. We are now hopeful that the Bollywood industry will derive comfort from this strong performance and start releasing high quality content in the near future,” he added.
It was on Sep 30 that the central government allowed state governments to permit cinemas to open, that too with only 50% capacity.
Since then, various states have issued their respective notifications for cinema reopening over October, November and December 2020 permitting cinemas to commence operations in a staggered manner.
As of today, except for the state of Rajasthan and Jharkhand, all other states, where PVR has presence have allowed cinemas to re-open.