Movies

Mounting expenses dent bottom line of Inox and Cinemax

MUMBAI: The profitability of multiplexes is being clobbered by rising expenditure as content cost is on the upswing and there is pressure to scale up screens.

Indiantelevision.com looks at two multiplexes to elucidate this reality. Both Inox and Cinemax have announced their fiscal results and the common thread that we find is a dent in the bottom line.


While Inox Leisure Ltd. has seen a gradual rise in annual revenues, profit margins have gradually eroded. Although expenses have increased in all sectors of the business, the chief contributors include film distributors‘ share (at Rs 530 million); property rent and conduction fees (at Rs 264.3 million) and entertainment tax (at Rs 284 million). The corresponding expenditure in these areas last year stood at Rs 449.6 million, Rs 187.7 million and Rs 215.7 million respectively. Inox has also increased its screen tally from 84 to 91 for the year.


The problem area is also on the revenue side, which has slowed down substantially in FY‘09.


A look at the financial figures of Inox reflects the actual picture of a multiplex that is beginning to feel the pinch of a slowdown. The table below shows the numbers from FY‘06 to FY‘09.







INOX financial figures (in Rs millions)


























 
FY‘06

FY‘07

FY‘08

FY‘09
Total Income
1,090.81

1,624.80

2,178.30

2,278.80
Expenditure
711.09

1,170.30

1,660.60

1,908.60
Operating Profit
379.72

454.5

517.7

370.2

The graph below indicates how rising expenditure has eaten into the profits of the company.




Inox is not the only multiplex plagued by rising costs. Cinemax reflects a similar story, though its revenue is also on the upside.


As can be seen from the table and graph below, there is a stark difference in expenditure incurred in FY‘08 and FY‘09. Profit margins have really been compressed.








Cinemax financial figures (in Rs millions)






















 
FY‘07

FY‘08

FY‘09
Net income from operations
933.1

1016.2

1446.1
Expenditure
733.4

826.8

1325.5
Profit before tax
172.9

201.2

151.7


Ambitious expansion plans by Cinemax may be one of the reasons for the steep rise in expenditure. The number of screens increased from 52 in the last fiscal year to 74 this year, which means an addition of 22 screens in the last year.


Profitably of Cinemax has headed south. The graph below shows how expenditure in the year ending 31 March 2009 towers above the corresponding values of the previous year. Although this has been accompanied by an increase in revenues, profits have taken a hit. Other than the first quarter, the profits in FY‘09 have been lower than their counterparts the previous year across all quarters.



It remains to be seen how the new revenue share deal with the film producers and distributors is going to affect these two multiplexes. That, however, is not going to prove a hurdle for Inox‘s and Cinemax‘s growth plans. Cinemax, for instance, is planning to pump in between Rs 800 million and Rs 1 billion to roll out 50 screens in the current fiscal.

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/27/phillauri%20%281%29.jpg?itok=0P_Rrhjw
New films fail to attract viewers

*The poor run of films at the box office continues unabated save for an odd Dangal or a reasonable entertainer in Badrinath Ki Dulhania. Not that any of these films can sustain a multiscreen cinema complex for more than a few weeks

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/25/Rjavardhan-rathor-800x800.jpg?itok=eYAh5ig1
Rs 125 million incurred on Film Heritage Mission this year

NEW DELHI: A total of about 1,32,000 film reels have been acquired and the work of assessment, preventive conservation and restoration started under a mission mode project under the National Film Heritage Mission (NFHM). The scheme is to be implemented between 2014-15 and 2020-21 with total outlay...

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/24/anarkali%20%281%29.jpg?itok=_Hz9Q49z
Anaarkali Of Aarah: Worth a look

Just when one was expecting a week of lack-lustre films especially as some small filmmaker is releasing his or her work, comes a surprise that reinforces faith in good cinema.

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/21/Badrinath-ki-Dulhaniya.jpg?itok=9AKk4o7J
Dismal releases help last week's film to turn lucky at the Box Office

MUMBAI: With dismal releases, the week proved lucky for last week’s ‘Badrinath ki Dulhaniya’ as none of the three films fresh releases this week managed to create any impact on the viewers.

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/20/Freedom%20of%20speech.jpg?itok=S5jPVnrt
'Freedom of speech' vital in progressive society, says Nandita Das

NEW DELHI: Three short films made by renowned filmmakers Sudhir Mishra, Nandita Das and Ram Madhvani on meaningful subjects marked the India Today conclave on its closing day in Mumbai. India Today Group editorial director Kalli Purie said the films had been commissioned by the group to mark four...

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/17/machine%20%281%29_0.jpg?itok=rcz0b_3J
Machine.... Poor show

Machine is a rather unlikely story with an unlikely title. Coming from Abbas Mustan duo, the Burmawalla brothers, who made a reputation for giving thrillers and action films with good musical score, one expected more of the same stuff. Having worked with some of the top artistes of Hindi film...

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/14/badri%20%281%29.jpg?itok=86DVRTqy
'Badrinath Ki Dulhania' is on its way to becoming a hit

The time period for the release of Badrinath Ki Dulhania was dicey to say the least. The film was released bang in the middle of days of election results in the most politically volatile states of the North India, board exams and the pre-Holi Friday. Also, cinema halls are closed till mid-noon on...

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/14/paramount.jpg?itok=gy3_va7l
Paramount & Anonymous Content to make 'The Windfall' as a TV series

Paramount TV and Anonymous Content have come together to develop Indian author Diksha Basu’s upcoming debut novel The Windfall as a TV series.

Movies Hollywood
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/10/kung-fu%20%281%29.jpg?itok=xrr6JRYL
Kung Fu Panda 3 premiering on Star Movies on 19 March

This month Star Movies brings to its viewers Kung Fu Panda 3, the latest installment in the animated series featuring Po, a dumpling loving Panda, who defies all odds to become a Dragon Warrior. From the very first film, Po has created a special space in the hearts of audiences of every age and...

Movies Hollywood

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories