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/2016/12/05/kahaani-2-800x800_0.jpg?itok=2rm8IB0e
A silver lining among damp squibs

Kahaani 2, a sequel to Kahaani (2012), turned out to be only an attempt to cash in on the earlier film. The film has nothing to do with the previous film and, even the character of the protagonist, Vidya Balan, is quite contrary to the original where she was a gutsy fighter on a mission while here...

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2016/12/02/fax-800x800.jpg?itok=jTkCFrnA
Sony Le Plex HD to premiere Foxcatcher in India

“A coach is a father. Coach is a mentor. Coach has great power on an athlete’s life,” says John Du Pont, the coach of team Foxcatcher.

Movies Hollywood
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2016/12/02/kahaani-2-800x800_0.jpg?itok=vi8AEWx6
Kahaani 2: Durga Rani Singh......Predictable story

Sequel is a misnomer for films using a similar or the same title as an older film including, surprisingly, not always successful ones. The use of an old title and, if possible, the protagonist from the earlier film seem to suffice. In Kahaani 2: Durga Rani Singh, the common factor as in Kahaani (...

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2016/12/02/dashing.jpg?itok=0yAM4SrU
Zee Classic to air Dharmendra movies from 5-9 December

MUMBAI: The he-man's fans are in for a sweet surprise next week.

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2016/12/01/Transformers.jpg?itok=PLJ3sgAf
&pictures to premiere 'Transformers: Age of Extinction' on 2 December

MUMBAI: Enviable structures, remarkable visual effects and electrifying action sequences- The iconic Transformers series has never failed to flabbergast the viewers. To flavor up your weekend, &pictures, Naye India Ka Blockbuster Movie Channel is all set to premiere the blockbuster film...

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2016/11/30/rajkumar-800x800.jpg?itok=UiPHalmO
CineAsia to honour Akella; feature Shyamalan's 'Split'

The Motion Picture Association Asia-Pacific Copyright Educator Award will be bestowed on comScore India managing director, theatrical, Rajkumar Akella, at CineAsia in Hong Kong. comScore which is an American media measurement and analytics company providing marketing data and analytics to many of...

Movies Hollywood
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2016/11/29/Dear%20Zindagi.jpg?itok=t5N1hFIl
Star power fades away, collections crumble

*Writer-director Gauri Shinde followed her success of English Vinglish with Dear Zindagi. To her advantage, she had the reigning star, Shah Rukh Khan, along with an emerging star, Alia Bhatt, to boast of in the cast.

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2016/11/28/robot-800x800.jpg?itok=ajjH6ifG
Leading Korean filmmaker impressed by Rajini 'Robot'; keen to co-produce with India

Critically-acclaimed Korean filmmaker Kim Jee-Woon, whose action thriller 'The Age of Shadows’ is the Closing Film for the International Film Festival of India, said it would “surely be great” to incorporate elements of cinema from both countries into each other’s films.

Movies Regional
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2016/11/26/SonyMax.jpg?itok=yeelQmkG
Sony Max brings 'No Talkies Nautanki Returns' for media agencies

MUMBAI: Sony Max gave Bollywood enthusiasts a reason to rejoice as it kick-started the third season of its flagship event, No Talkies Nataunki Returns. Organised exclusively for media agencies, this property is an absolute treat for movie buffs as it provides them an opportunity to participate in...

Movies Hindi

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories