Covid2019 pushes PVR to take one-time write off of perishable inventory worth Rs 183 lakh

PVR plans to raise Rs 300 crore through rights issue to shore up capital base

MUMBAI: PVR Ltd, on Monday, announced its audited standalone and consolidated financial results for the fourth quarter.  Consolidated revenues for the quarter stood at Rs 662 crore witnessing a 22 per cent drop compared to corresponding period of last year due to outbreak of Covid2019 in the last month of the quarter. 

“Since all the cinemas are shut, company is not generating any revenue from operations while we continue to incur committed cash outflows, including employee salary pay-outs, overheads as well as payments for older working capital. This has had and will continue to have significant negative impact on profitability and liquidity during lockdown and even thereafter till business comes to normalcy,” it said in an investor presentation.

While PVR started closing its screens beginning 11 March, its revenue and cash flow generation may be impeded further once operations are allowed to reopen as cinemas may not be able to operate at normal capacity utilisation due implementation of social distancing measures as well as health concerns that the patrons may have. Talking about financial impact, it mentioned that it has taken one-time write off of perishable inventory of Rs 183 lakh in March, on account of spoilage due to closure of cinemas pursuant to Covid2019. 

The company is taking decisive actions to mitigate the adverse impact of Covid2019 by implementing cost reduction strategies, enhancing liquidity and cash-flows management. It has stated that it has cut salary across various levels and laid off employees. 

“As on 31 March 2020, company had almost Rs 316 crore in liquid assets. Further, company is considering steps to further augment its liquidity position through fresh borrowings and equity issuance. With respect of the same, the board of directors of the company has given an in-principle approval for a rights issue for an amount of upto Rs 300 crore as “confidence capital” to shore up capital base,” it added in a statement. 

It reported a consolidated net loss of Rs 74.61 crore for the fourth quarter while it had posted a net profit of Rs 46.75 crore in the January-March quarter a year ago. 

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