PVR INOX to close 70 non-performing screens in India

Multiplex chain PVR INOX plans to shut down 70 non-performing screens in FY25, according to its latest annual report.

“....not wavering from our goal of profitable growth, we will exit almost 60–70 screens that are non-performing and a drag on our profitability,” the report said.

Additionally, it will go for potential monetisation of non-core real estate assets in locations such as Mumbai, Pune, and Vadodara.

The company will add 120 new screens in FY25.

“Our company’s medium to long-term strategy will involve expanding the number of screens in South India due to the region’s high demand for films and comparatively low number of multiplexes in comparison to other regions. We estimate that approximately 40% of our total screen additions will come from South India,” it said.

According to the annual report, PVR INOX is moving towards a capital-light growth model to reduce its capex on new screens addition by 25 to 30 per cent in the current fiscal.

The company is evaluating monetisation of owned real estate assets, as the leading multiplex operator aims to become "net-debt free" company in the future.

PVR INOX opened 130 new screens and has shut down 85 under-performing screens this year, according to the report.

"This rationalisation is part of our ongoing efforts to optimise our portfolio. The number of closures seems high because we are doing it for the first time as a combined entity," the report said.

PVR INOX's net debt in FY24 was at ₹1,294 crore. The company had reduced its net debt by ₹136.4 crore last fiscal, the report stated.

PVR's revenue was at ₹6,203.7 crore and a loss of ₹114.3 crore in FY24. This was the first full year of operations of the PVR INOX merged entity.

In FY24, PVR INOX had a 10 per cent growth in ticket prices and 11 per cent in F&B spend per head.

"Going forward, the increase in ticket prices and food and beverage spending per head will be more in line with the long-term historical growth rates,” the report said.

Additionally, the company wishes to restore pre-pandemic margins. The occupancies are still lower than pre-pandemic levels.

"We aim to boost revenue by increasing footfalls through innovative customer acquisition and retention,” the report said.

“We are rigorously working on driving greater cost efficiencies. This involves renegotiating rental contracts to reduce fixed costs, closing underperforming screens, a leaner organisational structure, and overhead cost control measures,” it added.