Leading multiplex operator PVR INOX Ltd said on Monday that it would close some theatres due to accelerated depreciation on the theatres being considered for closure.
The company said in a statement, ““The company plans to shut down approximately 50 cinema screens over the next 6 months. These properties are loss making, or housed in malls which have reached the end of their life cycle with little hope of any revival. The company has taken an accelerated charge of the depreciation in its books and written off the WDV of assets.”
The operator stated that between PVR (97 screens) and INOX (71 screens), 168 screens were added in FY’23, and 79 screens were added in Q4 FY’23 between PVR (53 screens) and INOX (26 screens).
The operator stated in its study that there had been substantial volatility in the performance of Hindi films over the past four quarters and that popular films are bringing in more money at the box office than before the pandemic.
The operator of multiplexes also provided its expectation for screen openings for FY’24, stating that it plans to open 150–175 screens in FY’24. Of these, 15 screens are seeking a licence to commence business, 9 have already launched, and 152 are currently undergoing various phases of fitout.
The statement further said, “The company has realigned all upcoming handover of new sites for fitouts till the time business fully recovers. and the company has robust pipeline of screens signed up for development over the next 5 years.”
PVR-INOX announced on Monday that its owners were responsible for a combined financial loss of 333.35 crores for the three months that ended in March 2023. This compares to a net loss of 105.49 crore in the same quarter of the previous fiscal year. The prior December quarter had a profit of 16.1 crores for the corporation.
The Managing Director of PVR-INOX, Sanjeev Kumar Bijli, told reporters, “Going forward in the next fiscal, the combined entity operating about 1,670 screens in various geographies with a robust pipeline of content both in English, Hindi and regional, we would have an enhancement in the number of admissions.”
He further said, “We have already added around 140 screens this fiscal and we should be looking around adding 180 more screens in the next fiscal as well. People are coming to the cinema now and we are very confident to enhance the admission numbers.”
Following the merger, efforts are being made to achieve economies of scale and synergies in the revenue streams from ticket prices, food and beverage sales, advertising, and operating expenses.