PVR INOX Plans To Shut Down 50 Cinemas In Next 6 Months
Last updated on July 25th, 2023 at 11:26 am
PVR INOX Ltd. has reported a quarterly loss of ₹333 crore. The company had to open new screens in FY24. But now it’s going to shut down its 50 cinema theaters.
PVR INOX Ltd, one of India’s leading multiplex operators, has reported a quarterly loss of 3.33 billion rupees ($40.72 million) due to one-time impairment charges and expenses associated with the planned shutdown of several cinemas.
The company, which was formed by the merger of India’s top two multiplex operators, cited the impact of the COVID-19 pandemic and the rise in streaming services as factors contributing to its financial challenges.
The company has decided to shut down 50 loss-making cinemas over the next six months, resulting in an accelerated depreciation charge of ₹105.8 million rupees.
The cinema industry in India has been severely affected by the pandemic, with lockdowns forcing people to stay at home and increasing the popularity of streaming platforms among movie enthusiasts.
PVR INOX’s decision to close certain cinemas reflects the need to streamline operations and cut costs in response to the changing dynamics of the industry.
Despite the losses and planned shutdowns, PVR INOX has outlined future expansion plans, aiming to open 150-175 more screens in fiscal year 2024.
However, the company also reported an impairment charge of 108.2 million rupees related to a suspended project in a Bengaluru mall.
PVR INOX expects the volatility in the box office experienced in recent months to stabilize in the coming quarters. The company remains confident in the long-term potential of the cinema industry, even though it acknowledges the current challenges.
In terms of financials, PVR INOX reported revenue of 11.43 billion rupees for the quarter, while total expenses amounted to 13.64 billion rupees.
The average ticket prices slightly declined to 239 rupees, and the average food and beverage spend per patron decreased to 119 rupees.
The company highlighted the decent performance of Hollywood films such as ‘Ant-man and The Wasp – Quantamania’ and ‘John Wick-4′ during the quarter.
Despite the losses, shares of PVR INOX closed 1.2% higher on the day of the announcement, indicating some optimism from investors.
The company’s management remains focused on adapting to the changing landscape of the cinema industry and exploring opportunities for growth while taking necessary measures to optimize its operations.
