Report on the performance for the Quarter ended June 30 th , 2008 PVR LIMITED (Incorporated on April 26,1995 as Priya Village Roadshow Limited and obtained certificate of commencement of business on December 4,1995. On June 28,2002 the name of our company was changed to PVR Limited) Block A, 4th Floor, Building No 9, DLF Cybercity Phase II, Gurgaon – 122002, Haryana, India Phone : (91-0124) 4708100 Fax : (91-0124) 4708101 July 31 st , 2008 The financial statements included in this quarterly report fairly presents in all material respects the financial condition and results of operations of the company as of, and for the periods presented in this report.
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Report on the performance for the Quarter ended June 30th, 2008
PVR LIMITED (Incorporated on April 26,1995 as Priya Village Roadshow Limited and obtained certificate of commencement of business on
December 4,1995. On June 28,2002 the name of our company was changed to PVR Limited) Block A, 4th Floor, Building No 9, DLF Cybercity Phase II, Gurgaon – 122002, Haryana, India
Phone : (91-0124) 4708100 Fax : (91-0124) 4708101
July 31st, 2008
The financial statements included in this quarterly report fairly presents in all material respects the financial condition and results of operations of the company as of, and for the periods presented in this report.
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Disclaimer
Safe Harbor : - Some information in this report may contain forward-looking statements. We have based these forward
looking statements on our current beliefs, expectations and intentions as to facts, actions and events that will or may
occur in the future. Such statements generally are identified by forward-looking words such as “believe”, “plan”,
“anticipate”, “continue”, “estimate”, “expect”, “may”, “will” or other similar words. A forward-looking statement may
include a statement of the assumptions or bases underlying the forward-looking statement. We have chosen these
assumptions or bases in good faith, and we believe that they are reasonable in all material respects. However, we
caution you that forward-looking statements’ and assumed facts or basis almost always vary from actual results, and the
differences between the results implied by the forward-looking statements and assumed facts or bases and actual
results can be material, depending on the circumstances. You should also keep in mind that any forward-looking
statement made by us in this report or elsewhere speaks only as of the date on which we made it. New risks and
uncertainties come up from time to time, and it is impossible for us to predict these events or how they may affect us.
We have no duty to, and do not intend to, update or revise the forward-looking statements in this report after the date
hereof.
The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding
fluctuations in earnings, our ability to manage growth, intense competition in multiplex business due to the entry of new
players, including those factors which may affect our cost advantage, lack of good quality content, onset of new
technologies such as DTH, IPTV and increasing penetration of Home-video, which may impact overall industry growth,
wage increases in India, real estate costs increases, delay or failure In handover of properties from real estate
developers, the success of our subsidiary companies, withdrawal of entertainment tax exemption granted by government
and general economic conditions affecting our industry.
In light of these risks and uncertainties, any forward-looking statement made in this report or elsewhere may or may not
occur and has to be understood and read along with this disclaimer.
Others: In this report, the terms “we”, “us”, “our”, “PVR”, “PVRL” or “the Company”, unless otherwise implies, refer to PVR
Limited (“PVR Limited”) and its subsidiaries, PVR Pictures Limited, PVR Blue-O Entertainment Ltd, CR Retail Malls
Private Limited and Sunrise Infotainment Private Limited.
3.4 Film Performance 16 3.5 Key Developments 17 3.6 Present Status – Current Properties 18 3.7 Likely Opening Schedule FY 2008-09 19 Section 4 Shareholding Pattern as on 30th June, 2008 20
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Section 1 - Financial Results
PVR Limited Regd. Office : 61, Basant Lok, Vasant Vihar, New Delhi 110 057, India UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED JUNE 30, 2008 (Rs. in lacs) Three months ended Year ended Sl. No. Particulars 30.06.2008 30.06.2007 31.03.2008 (Audited) 1 Net Income from operations 6,022 5,480 23,608 2 Other Income 237 179 862 3 Total Revenues 6,259 5,659 24,470 4 Total Expenditure a) Film Distributors' Share 1,510 1,421 6,095
b) Consumption of food and beverages 377 380 1,579
c) Employee Cost 724 562 2,471 d) Rent 651 588 2,929 e) Depreciation/Amortization 430 344 1,510 f) Other Expenditure 1,792 1,323 6,017 5 Total Expenditure 5,484 4,618 20,601 6 Interest 233 142 682 7 Profit Before Taxes 542 899 3,187
8 Income Tax ( including deferred tax and other Tax Adjustments) (139) (286) (1,023)
Fringe Benefit Tax (15) (13) (58) 9 Net Profit (PAT) 388 600 2,106 10 Paid-up Equity Share Capital 2,301 2,301 2,301 11 Reserves and Surplus 17,487
12 Basic Earning Per Share - not annualized 1.62 2.48 8.78
Diluted Earning Per Share - not annualized 1.54 2.48 8.53
(fully paid up share of Rs.10/- each) 13 Aggregate of public shareholding No. of shares 13,651,126 13,690,101 13,690,101 Percentage of shareholding 59.32% 59.49% 59.49% Notes:
1 Out of balance proceeds of public issue, the Company has during the quarter ended June 30, 2008 spent a sum of Rs. 272 lacs towards projects under implementation, general corporate purpose and share issue expenses. The unspent money is temporarily invested in the units of Mutual Funds.
2 Status of investor complaints / queries during the quarter ended June 30, 2007 :
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Pending at the beginning Nil; Received 5; Disposed off 5; Pending at the end Nil .
3 Income from Operations as disclosed above are net of Entertainment Tax, Value Added Tax and Service Tax collected on generating such Incomes.
4 The Company has during the quarter ended June 30, 2008 commenced operations at Ambience Mall, Gurgaon.
5 The Company is engaged in the business of Film Exhibition and there are no other reportable segments as per Accounting Standard 17 on Segment Reporting issued by ICAI.
6
The Company has till date funded PVR Pictures Limited, CR Retail Malls (India) Private Limited, Sunrise Infotainment Private Limited and PVR bluO Entertainment Limited, its subsidiaries for Rs. 5,380 lacs by way of equity/preference share capital including Rs.230 lacs funded during the quarter ended June 30, 2008) and Rs. 3,478 lacs by way of loan/advances etc. (including Rs. 991 lacs funded during the quarter ended June 30, 2008).
7 Rent expense for the current quarter is after reversal of excess provision of Rs 156 lacs made in last year.
8
The Company collects Entertainment Tax on sale of tickets of cinema operations. The Uttar Pradesh (UP) State Government has, with a view to encourage setting up of multiplexes in the state, granted an exemption to the Company from payment of entertainment tax. As advised by a tax expert, the Company has considered the amount of entertainment tax collected on sale of tickets of the cinema operations at two multiplexes at Uttar Pradesh and retained by it as capital receipt for income tax purposes and hence, not taxable. Accordingly, the tax provision for the current quarter is calculated based on the profits of the business as reduced by the amount of entertainment tax collected at aforesaid two multiplexes by the Company during the current quarter.
9 The Company has redeemed the 10,000,000 , 5% redeemable and non-cumulative preference shares of Rs. 10/- each on July 1, 2008.
10 EPS has been calculated after reducing dividend @ 5% p.a. plus tax thereon on the 10,000,000 , 5% redeemable and non-cumulative preference shares of Rs. 10/- each, from the net profit after tax.
11 The results for the quarter ended June 30, 2008 have been subjected to a limited review by the statutory auditors. The above results as reviewed by the Audit Committee have been approved by the Board of Directors at their meeting held on July 31, 2008.
12 Previous period/year figures have been regrouped/rearranged, wherever considered necessary. For PVR LIMITED New Delhi Ajay Bijli 31-Jul-08 Chairman cum Managing Director
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Section 2 – Overview
We are a leading and premium Multiplex Cinema Exhibition company with growing presence across various verticals of lifestyle
entertainment domain. PVR pioneered the multiplex revolution in India by establishing the first multiplex cinema in 1997 and the
largest 11-screen multiplex cinema in the country in 2004. At present, our geographically diverse cinema circuit in India consists of
25 cinemas with a total of 101 screens spread over Delhi, Faridabad, Gurgaon, ludhiana, Chandigarh, Ghaziabad, Mumbai,
Bangalore, Hyderabad, Lucknow, Indore, Aurangabad , Baroda and Latur.
With approx. 18 million patrons visiting PVR multiplexes annually during FY 07-08, we are one of India’s most recognized film
exhibition brands. Backed by a robust site selection model, PVR is regarded as one of the key Anchor tenant by leading real estate
developers across the country and contributes significantly to the revenue potential of the retail development. This coupled with
emphasis on marketing and promotions, implementation of uniform operational systems, processes and customer oriented staff
training procedures has helped us build strong brand equity with our customers
We successfully completed an Initial Pubic Offering (IPO) in December 2005 in which 77,00,000 equity shares were offered to the
public consisting of a fresh issue of 57,00,000 equity shares and an Offer for Sale of 20,00,000 equity shares by ICICI Venture
Funds Management Company Limited.
We operate a film distribution and production business through PVR Pictures, a subsidiary of the company. PVR Ltd holds 60%
shareholding in the subsidiary with the balance 40% stake held by JP Morgan Mauritius Holding Ltd and ICICI Venture in equal
proportion (20% each). Some of the recent movies co-produced by PVR Pictures include “Taare Zameen Par”, “Jaane Tu Ya
Jaane Na” and “Contract”. Apart from the movies co-produced, some of the other movies recently distributed by us include “Sarkar
Total Revenues for the quarter ended June 2008, were Rs. 6259 lacs as compared to Rs.5659 lacs during the corresponding
quarter ended June 2007, higher by 11%. Revenues are reflected net of Entertainment tax, Sales Tax and Service Tax. During the
period under review, the average entertainment tax for the company witnessed a favorable decline as shown below:
Q1 2008-09 Q1 2007-08 E-tax as a % of Gross Operating Income 12.0% 13.9% E-tax as a % of Gross Ticket Sales and Income from Revenue Share 17.6% 19.2%
The reduction in the average entertainment tax liability of the company has primarily been on account of addition of new screens in
markets which are eligible for tax exemption / holiday. Out of the 101 screens operated by the company, 39 screens are enjoying
entertainment tax exemption/ eligible for entertainment tax exemption.
Revenue growth under various heads
Figures in Rs Lakhs Quarter ended
30.06.2008 30.06.2007 growth Ticket Sales 3,245 3,130 4% Convenience fee 40 23 74% Income from Revenue Sharing 601 596 1% Sale of Food and Beverages 1,235 1,123 10% Advertisement & Royalty Income 901 556 62% Management fees - 48 -
Sale of Film Rights & Film Distribution - 5 -
Net Operating Income 6,022 5,480 10% Other Income 237 179 32% Total Income 6,259 5,659 11%
Despite a sharp decline in overall occupancies from 42% to 32% across cinemas during the quarter under review, net
operating income grew by 10%, led by higher ticket / F & B realization from comparable properties, revenue contribution
from new properties and robust growth in advertisement revenues.
Revenues from Ticket sales for the quarter ended June 2008 were Rs.3245 lacs (up 4% Y.O.Y.) and Income from revenue
sharing for the quarter ended June 2008 was Rs.601 lacs (up 1% Y.O.Y.). Overall revenues from ticket sales and income from
revenue sharing for the quarter ended June 2008 were higher by 3% over the corresponding quarter of previous year.
Revenues from Food & Beverage sales for the quarter ended June 2008 were Rs.1235 lacs (up 10% Y-O-Y) in comparison
with Rs 1123 Lacs earned during corresponding quarter of previous year.
Overall, Q1 was a very lackluster quarter for the movie industry and cinema exhibition industry. The quarter was impacted on
account of the launch of Indian Premiere League (IPL), a cricket extravaganza, which lasted for a period of 45 days, coinciding
with the school / college holidays. Unlike similar quarter last year, which had releases such as Spider Man 3, Namaste London
and Life In a Metro, the first quarter of FY 08-09 was characterized by lower occupancies due to lack of quality movies, affecting
the performance of the exhibition sector as a whole.
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Revenues from Advertising & Royalty Income for the quarter ended June 2008 witnessed a robust growth on account of
growth in corporate alliances and increase in sponsorship revenues from existing as well as new cinema properties. The
revenues for the quarter were Rs.901 lacs (up 62% Y-OY).
Revenues from Convenience fee for the quarter ended June 2008 were Rs 40 Lacs, exhibiting a growth of 74% (Y-O-Y) on
account of increase in tickets sales from website and allied channels like IVR, Mobile Ticketing etc. Overall, the company sold
around 4.15 lacs tickets through website and allied channels during Q1 2008-09, representing around 11% of overall tickets
sold.
Other Income
Other Income for the quarter ended June 2008 was Rs.237 lacs (up 32% Y-O-Y) and it includes the following:
Figures in Rs Lakhs Quarter ended
30.06.2008 30.06.2007 growth Interest / Dividend income 131 135 -3%
Rent Received 17 15 16%
Royalty Income - 8
Miscellaneous income 89 21 317%
Total Income 237 179 32%
Expenses Film Distributors’ share: Film hire cost as a % of Net Operating Income was 25.1% during Q1 2008-09 as compared to 25.9%
during Q1 2007-08. As a % of Net ticket sales and Income from revenue share, film hire cost was at 39.3% during Q1 2008-09 as
compared to 38.1% during Q1 2007-08, essentially driven by increase in flow of content and shorter run of films.
Food & Beverage Cost: F&B cost as a % of net F&B sales declined from 33.8% during Q1 2007-08 as compared to 30.5% during
the quarter under review. A reduction in COGS % has been achieved through cost-effective F & B product-mix and higher
realisation on account of F & B revenues.
Personnel costs: Personnel cost as a % of Net Operating Income was 12% during Q1 2008-09 and 10.3% during similar quarter
last year. The increase in on account of addition of new cinema properties and lower revenue realisation during the quarter under
review .
Rent: Rent cost as a % of Net Operating Income was 10.8% during Q1 2008-09 as compared to 10.7% during Q1 2007-08. Rent
expense for the current quarter is after reversal of excess provision of Rs 156 lacs made in last year.
Operating and Other expenses : These include repair & maintenance expenses, security charges paid to security agencies to
provide security at our cinemas; electricity charges and water charges; insurance charges; expenditure on advertisement and
publicity and sales and business promotion; expenditure incurred on various administrative and other overheads, such as traveling,
printing & stationery, professional fees, communication expenses, bank charges etc.
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The total Operating and other expenses grew from Rs.1323 lacs in Q1 2007-08 to Rs. 1792 lacs in Q1 2008-09, due to increase in
number of cinema properties. As a percentage of Net Operating Income, Operating and other expenses were at 29.8% in Q1 2008-
09 and 24.1% in FY 07-08. The increase in operating expenses has been on account of increase in R & M / Common Area
Maintenance costs in mall-based properties and increase in Advertisement and publicity expenses due to launch of new properties.
Earnings before Interest Depreciation and Tax (EBIDTA) EBIDTA declined from Rs.1385 lacs in Q1 2007-08 to Rs 1205 Lacs during the quarter under review. EBITDA margin declined
from 24.5% to 19.3%, on account of lower revenue realization during the quarter under review.
Profit After Tax (PAT) PAT for the quarter ended June 2008 was Rs.388 lacs, as compared to Rs.600 lacs during the corresponding quarter of previous
year.
EPS
EPS (basic) for the quarter under review year was Rs.1.62 as compared to Rs.2.48 during the corresponding quarter of previous
year.
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Section 3.2 – Operational Highlights
The operating performance has been analyzed by making a like to like comparison between properties which were operational
during the corresponding period of the previous year (classified as “Comparable Properties”), properties which were not operational
or operational only during a part period during the corresponding period of previous year (classified as “Non Comparable
Properties”) and new properties which commenced operations during the year ( classified as “ New Properties”).
For the quarter under review, Prashant Vihar, Select City Walk, Ambi Mall and Ludhiana operated by PVR Ltd and Goregaon
property operated by Sunrise Infotainment Pvt Ltd, a wholly owned subsidiary of PVR Ltd, have been categorized under “New
properties”.
Aligarh, where PVR has discontinued its operations, and Baroda have been categorized under “Non-Comparable properties”.
During FY 08, PVR discontinued its franchise agreements with SRS and SPICE Cinemas and these two properties have been
categorized as “Franchise Cinemas”.
Footfalls
We entertained 3.72 mn. patrons at our own cinemas during the quarter ended June 2008 as compared to 3.95 mn. patrons during
the corresponding quarter in previous year. A weak movie line-up and below-average performance of key movies affected the
footfalls for the quarter under review.
Occupancy
With no block-buster movies and low patron turnout during the quarter under review, comparable properties witnessed a dip in
occupancy in comparison with similar quarter last year. The overall occupancy level was further affected by lower occupancies at
22 Delhi Select City Walk Saket 6 1,238 30% No Nov-07
23 Mumbai Goregaon* 6 1,783 45% Yes May-08
24 Gurgaon Ambience Mall 7 1,194 30% No May-08
25 Chandigarh Centra Mall 4 1,150 30% No July-08
Total 101 25,980
* Application for E-tax exemption has been filed with the relevant authorities and the approval is awaited; Property operated by Sunrise Infotainment Pvt Ltd, a wholly owned subsidiary of PVR Ltd
Geographical Distribution North South West Total Seats 13,659 2937 9,384 25,980 % Distribution 53% 11% 36% Screens 56 14 31 101 % Distribution 55% 14% 31%
Total Seats 25,980 Seats enjoying tax exemption* 10,915 As a % of total Seats 42%
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Section 3.7 – Likely Opening Schedule FY 2008-09
Cinema Location Screens Seats Status
Likely opening schedule
E Tax Exemption
1 PVR Goregaon Mumbai 6 1,783
Commenced Operations in May
2008 N /A Yes
2 Ambience Mall Gurgaon 7 1,194
Commenced Operations in May
2008 N /A
3 Centra Mall, Chandigarh
Punjab 4 1,150 Commenced Operations in July 2008 N /A
7 The Acropolis Ahmedabad 6 1,540 Mall under construction; hand-over of property expected in Q2 Q4 2008-09
Total 41 10,468
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Section 4 – Shareholding Pattern as on 30th June, 2008
Category of shareholder Number of
shares Shareholding %
(A) Shareholding of Promoter and Promoter Group[2] (1) Indian (a) Individuals/ Hindu Undivided Family 18172 0.08 (b) Central Government/ State Government(s) (c) Bodies Corporate 9344572 40.60 (d) Financial Institutions/ Banks Sub-Total (A)(1) 9362744 40.68
(2) Foreign (a) Individuals (Non-Resident Individuals/ Foreign Individuals) (b) Bodies Corporate (c) Institutions (d) Any Other (specify) Sub-Total (A)(2) Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2) 9362744 40.68
(B) Public shareholding[3] (1) Institutions (a) Mutual Funds/ UTI 2189908 9.52 (b) Financial Institutions/ Banks (c) Central Government/ State Government(s) (d) Venture Capital Funds (e) Insurance Companies 59295 0.26 (f) Foreign Institutional Investors 6681725 29.03 (g) Foreign Venture Capital Investors (h) Any Other (specify) Sub-Total (B)(1) 8930928 38.81
i. Individual shareholders holding nominal share capital up to Rs. 1 lakh. 1936463 8.41 ii. Individual shareholders holding nominal share capital in excess of Rs. 1 lakh. 955567 4.15
(c) Any Other (specify) Non Resident Indians 69460 0.30 Trust 262 0.00 Clearing Members 48329 0.21 Sub-Total (B)(2) 4720198 20.51 Total Public Shareholding (B)= (B)(1)+(B)(2) 13651126 59.32 TOTAL (A)+(B) 23013870 100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued
0 0.00
GRAND TOTAL (A)+(B)+(C) 23013870 100.00
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List of Non-Promoter Shareholders holding more than 1% of the total number of shares