"We will have a normal FY22 and we will go back to our rate of commissioning 80 to 90 screens every year. We hope that the development of real estate by the mall developers keeps pace, allowing us to commission our pipeline of 1,000 screens in the coming years." Movie theatre chains have been hit the hardest by the Covid-19 pandemic, as multiplexes are shut since March to stop the spread of the coronavirus.
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NEW DELHI: INOX Leisure, the country's second biggest multiplex chain, said it will not shut any cinema halls and that the plan to build 1,000 screens is on track, even as theatres continue to be shut and online video-streaming services gain popularity amid the Covid-19 outbreak.
"Our 41 screens are more than 85% complete, and we are looking forward to adding these screens in FY21," chief executive Alok Tandon said, adding that it expects the impact of Covid-19 to remain only in the ongoing fiscal year.
"We will have a normal FY22 and we will go back to our rate of commissioning 80 to 90 screens every year. We hope that the development of real estate by the mall developers keeps pace, allowing us to commission our pipeline of 1,000 screens in the coming years."
Movie theatre chains have been hit the hardest by the Covid-19 pandemic, as multiplexes are shut since March to stop the spread of the coronavirus.
Experts said the cinema exhibition industry would have lost an estimated Rs 5,000 crore of revenue in the past four months.
The crisis is expected to increase the pace of consolidation in the sector, as single screens would close due to the financial strain and uncertainty, and financially stronger multiplex chains could gain market share. According to the Ficci-EY Media and Entertainment Report 2020, the number of single screens in India has been steadily declining, from 7,031 in 2016 to 6,327 in 2019.
With 626 screens at 147 multiplexes in 68 cities, INOX is the second-largest multiplex operator, behind PVR. It recorded an average ticket price of Rs200 in FY20, compared with Rs197 the year before.
Rental is one of the key expenses, accounting for nearly 20% of the chain’s revenues, and the management is in discussions with property developers for a waiver during the lockdown period, as well as a reduction in rent once the chains resume operations.
"With a substantial reduction in revenues, but no real change in our fixed costs, the bottom lines are under severe pressure. Hence, till the business stabilises, revenue share is the most suitable option for both the multiplex as well the mall owners to tide over this phase as long-term partners, with common objectives," said Tandon.
Multiplex chains also have a new threat, after a few films meant for theatre release opted for digital release during the lockdown, thus reducing the availability of ready content to showcase once the chains start operations.
Also, the company said, predicting consumer apprehensions immediately post resumption will not be an easy task.
"We reckon that, post resumption of operations, cinemagoers may continue to harbour reservations, thus delaying visits to theatres, resulting in lower occupancy. In the first half of FY21, INOX Leisure would suffer a Rs160 crore EBITDA loss because of constrained occupancy," said a recent report by Anand Rathi.
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