PVR INOX To Shut 50 Loss-Making Cinemas Over Next 6 Months
PVR INOX Ltd, a multiplex operator formed by the merger of India’s top two companies, has announced a quarterly loss of 3.33 billion rupees ($40.72 million). The loss was primarily due to one-time impairment charges and expenses associated with the planned closure of certain cinemas. As a result, the company incurred an accelerated depreciation charge of 105.8 million rupees for 50 cinemas that are expected to shut down within the next six months.
The cinema industry in India has faced significant challenges since the onset of the pandemic, as lockdown measures forced people to stay home and increased the popularity of streaming services among movie enthusiasts. In response to these difficulties, PVR and Inox joined forces.
Despite the challenging circumstances, PVR INOX has outlined its plans to open 150-175 additional screens during fiscal year 2024. However, the company also incurred an impairment charge of 108.2 million rupees related to a suspended project in a Bengaluru mall. This announcement marks the first financial report following the completion of the merger between PVR and INOX.
In the previous year, PVR reported a loss of 1.05 billion rupees when the two companies were operating independently. PVR INOX remains optimistic about the future, expressing confidence that any volatility in the box office will stabilize in the next two to three quarters.
During the quarter, PVR INOX reported a revenue of 11.43 billion rupees, while total expenses amounted to 13.64 billion rupees. One of the notable Bollywood movies, ‘Pathaan,’ attracted customers during this period, while Hollywood films like ‘Ant-man and The Wasp – Quantamania’ and ‘John Wick-4’ delivered a satisfactory performance, according to the company.
Average ticket prices for the quarter declined from 244 rupees in the previous quarter to 239 rupees, and the average spend on food and beverages per customer decreased from 133 rupees to 119 rupees. Despite the challenging financial results, the company’s shares closed 1.2% higher on Monday ahead of the announcement of these results.
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