PVR targets 1,000 screens by Q1 of FY24

After two years of slowdown in screen launches, multiplex operator PVR is targeting to surpass its pre-COVID number in terms of screen additions in FY23.

The exhibitor is planning to add 120-125 screens in FY23, higher than its pre-COVID number of screen additions which was in the range of 75-100 odd screens.

"This is the highest number that we will be launching in any year. Our annual CAPEX outlook is Rs 350-400 crore for FY23 on screen fit-out and maintenance spends on existing screens.

The company will be moving to newer cities for screen launches and the focus will be on tier II, III markets.

PVR's Chairman and MD, Ajay Bijli, said that this financial year the company will break its own record of the maximum number of screens opened in a year in India. However, the exhibitor had seen the lowest screen additions in the last two years. In FY21, PVR had added only 13 new screens and in FY22 the multiplex operator added 29 screens across five properties.

While the coronavirus outbreak disrupted new screen launches, PVR is now looking to touch 1,000 screen mark.

"We are at 854 screens and by end of this financial year we will be close to the 1,000 screen mark. We can reach that number by Q1 of next financial year. Also, 125 screens is the guidance we are giving but we will be executing lot more screens on the ground, around 150-160 screens. Sometimes screen launches get delayed, so 125 is the number we are confident of opening in FY23," added Sood.

Last year, PVR had pushed its target of having 1,000 screens by a year to FY23.

PVR's performance

In Q4 FY22, PVR added 15 screens across three properties and reported consolidated revenue, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and PAT (Profit After Tax) of Rs 579.7 crore, Rs 142.4 crore and Rs 105.5 crore respectively as compared to Rs 263.3 crore, Rs 25.1 crore and Rs 289.2 crore during the corresponding quarter last year.

"March has been the highest-ever month in box office revenue collection, higher than any month in the pre-pandemic period. Admissions saw strong recovery and it is close to 90 percent of the pre-COVID level. It is coupled with strong ticket price growth with ATP (average ticket price) seeing 19 percent growth and that's why box office revenue is looking higher than what we were doing pre-pandemic. F&B (food and beverage) is doing strong as average F&B spend per person has moved up by 20 percent," said Sood.

PVR reported ATP of Rs 242 and spend per head (SPH) of Rs 122 in Q4 FY22 and for FY22 the company reported ATP of Rs 235 and SPH of Rs 124. In March, PVR crossed 90 lakh admissions thanks to strong content including movies like Tamil venture Valimai, Telugu film Bheemla Nayak, Alia Bhatt-starrer Gangubai Kathiawadi, The Kashmir Files and RRR. The company recorded 33.5 million visitors during FY22.

During the same month, the company booked a forex loss on loans extended to PVR Lanka which is a 100 percent subsidiary of PVR Ltd in Sri Lanka due to the sudden devaluation of the local currency given the political and economic turmoil in the region.

"In Sri Lanka, PVR has one property out of 175 properties and it does not even contribute one percent to overall revenues. Hence, no significant impact on PVR operations. Also, we are not investing in that market till the time the situation stabalises," said Sood.

Advertising lags

He also said that while the company has seen a bounce back in every other segment, cinema advertising remains a laggard. "Area where we are struggling is cinema advertising which will take three to four months for recovery. Cinemas becoming a part of corporate media plan, that is taking time to get restarted at a larger level. But local advertisers have been first to come back because they are able to see recovery sooner."

Gautam Dutta, CEO, PVR Limited pointed out that the spilt in terms of advertisers is 60:40 with a larger contribution coming from big businesses and the rest from the small and retail businesses. "Retail is much better as stores in malls are seeing huge amount of recovery. South as a market has recovered well and north is second best. However, west (market) is taking time and that market has corporate business."

Betting on new releases

PVR which has seen a 40 percent recovery in cinema advertising versus pre-COVID levels is betting big on Q1 of FY23. Even for the overall business, Sood said that the first quarter of FY23 will be strong for the cinema business.

"Doctor Strange has opened very well. We have Prithviraj (starring Akshay Kumar) releasing in June which is a big film, Top Gun (starring Tom Cruise) carries nostalgia. Lots of surprising content, a massive pipeline of content," he said.

Online ticketing and entertainment destination BookMyShow pointed out that Doctor Strange: In the Multiverse of Madness sold over 2.5 million tickets in the opening weekend alone.

"With the English original version leading the charts, the Hindi version of the film has contributed 26 percent of the overall ticket sales," said Ashish Saksena, COO - Cinemas, BookMyShow.

PVR added that Doctor Strange: In the Multiverse of Madness is the second highest Hollywood grosser since the reopening of cinemas.