New Delhi: Multiplex operator PVR Ltd will not produce any new movie for at least a year and will focus on exhibition business, a top official said on Thursday.
Shares in PVR, valued at $71 million, rose as much as 3.8% on the news before closing down at Rs117.60, down 1.47% in a firm Mumbai market.
“While there are predominant risks in any business, but in production business, these risks are something which we are unable to calculate, due to which our strategy is to have a stand off sort of thing,” Pramod Arora, chief executive officer, told Reuters in a telephone interview.
PVR’s home production, Abhishek Bachchan-starrer “Khelein Hum Jee Jaan Sey” bombed at the box office, dragging down the firm’s Dec-quarter consolidated earnings.
PVR last month reported a loss of Rs132 million for Oct-Dec quarter, compared to a profit of Rs66 million in the year-ago period.
Talent cost has sharply risen in the Indian film industry and is not linked with the performance of the movie, Arora said, adding that the industry must ‘mature´ to make talent pay variable with movie’s performance.
PVR may revisit decision not to produce movies after a year. “If the industry then, matures up, and one is able to forecast revenues and the other things, we will have a relook.”
PVR, which started as a movie exhibitor in New Delhi and recently branched off into movie-making, plans to now “dive deep” into the exhibition business as it had huge potential.
“(Exhibition) seems to be the place where we are more comfortable investing and confident of basically getting returns out of the business,” Arora said.
PVR plans to add 150 screens by March 2013 across India to its existing tally of 142 with an investment of about Rs220 crore to be funded through internal resources, Arora said.
From April, the cinema chain also plans to have all concessionaires in-house, from about 40% now, to boost quality as well as margins, Arora said.
The cricket world cup in India and a consequent go-slow on movie releases will hurt movie exhibition business in Jan-March, which could be the weakest for the industry, Arora said.
In India, major cricket events like World Cup or Indian Premier League routinely drive away traffic from movie theatres to cricket stadia and TV screens.
PVR’s internal projection had already factored this in and the company may do better than its own estimates because of some small releases that were not known earlier, Arora said, adding company will use the quarter to revamp its theatres.