Conference Call with Inox Leisure Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen to the full earnings transcript.
Comments from Alok Tandon, CEO Inox Leisure
For Inox, it has been a glorious journey for the past 18 years ever since we opened our first multiplex in Pune. We have always stood tall and firm in the face of adversity when it occurred and we assure you that our teams are keeping the glory intact. The recognition we have received in the years gone by, at various forums are a validation of the team’s remarkable performance.
Despite the headwinds, we have seen a strong full year performance, and continue our endless growth streak. We are at the top of the industry in profit per screen and per patron basis. We are the only national chain to be net debt free.
We achieved a milestone of 600 screens in FY20. We saw the highest ever yearly footfalls of 660 lakhs, a rise of 6% for the year. We saw the highest yearly revenue in our history of Rs. 1915 crore rupees, an increase of 12% YoY and the highest yearly PAT of Rs. 141 crore, an increase of 6%.
For the quarter revenue fell down by 22%. PAT went down from Rs. 40 crore to Rs. -2 crore, a decline of 105% YoY. Footfalls fell 29% in Q4 YoY, and occupancy fell 6%. We started seeing declines in footfalls from mid February due to fears from COVID19.
COVID-19 impacted screen openings in FY20 - while guidance for FY20 was 70 screens, actual screens opened were 58, 83% pf target.
Looking to open 41 screens in FY21. 86% of the work for opening the new screens is complete. We will require an additional capex of Rs. 28-30 crore for work completion and opening. We will restart our capex cycle, currently paused, once we resume normalcy.
As per the directive from the Government of India, INOX had to shut operations due to COVID19 pandemic. As a result, INOX had to invoke the Force Majeure clause from its agreement with the landlords, wherein the landlord needs to forego Rent and CAM charges for the lockdown period. We have spoken to all our landlords, and they understand the difficulty we are going through and they have been very supportive.
We are also negotiating for rent reductions post reopening of theatres. The company is also looking to raise Rs. 75 crores in additional debt.
We have been regularly engaging with production houses and distributors, and we are confident that barring a few exceptions, the majority of the content will not release on OTT platform before a theatrical release. We are expecting Akshay Kumar's Suryavanshi, and Salman Khan's new release Raadhe come out in October. We have movies starring Ajay Devgan, Ranveer Singh and Aamir Khan coming out in December.
India releases around 2000 movies a year and a few low-budget movies releasing on OTT are least of our worries. There have been movies in the past which have directly released on OTT and have perished without putting any dent on the exhibition industry.
The entire ecosystem of the Indian film industry understands the strong fundamentals of the global cinema consumption chain, which begins with theatricals, which turns out to be the most value-generating medium, ahead of OTT and Satellite. If a movie releases theatrically it has many more sources of revenue as compared to releasing directly on OTT.
Driving advocacy for the sake of protecting the business from the impact of Covid-19, we have proactively engaged with the government across various levels right from the PMOs office to various Ministry centers and most of the state governments. We have also been in touch with the city level administration. The engagement has been driven with the industry level association as well as individually by Inox. I am very hopeful that we will bounce back strongly.
Our current screen count today is at 626 screens across 47 properties in 68 cities. At present, we are now operational in 19 states, 68 cities as accepted with 626 screens and 1,44,467 seats.
As you all know, our revenue comprises of four key streams which are net box office, net food & beverage, advertisement and other revenues. For the quarter ending March, the net box office figures went down from Rs 284 crore in Q4F19 to Rs 218 crore in Q4FY20, a decline of 23%.
F&B revenues went down from Rs 123 crore in Q4FY19 to Rs 94 crores in Q4FY20, a decline of 24%. Advertising income went down from Rs 43 crore in Q4FY19 to Rs 35 crore in Q4FY20, a decline of 20%, and other revenues went down from Rs 33 crore in Q4FY19 to Rs 29 crore in Q4FY20 which is a decline of 12%. As a result of which the total revenues went down from Rs 484 crore in Q4FY19 to Rs 370 crore in FY20.
