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PVR Shares Rise On Lower-Than-Expected Q3 Loss

The multiplex operator’s net loss and operating loss were narrower than Bloomberg consensus estimates.

An employees wears a protective mask while waiting to greet customers outside the PVR Icon cinema at the DLF Promenade Mall in New Delhi, India. (Photographer: Anindito Mukherjee/Bloomberg)
An employees wears a protective mask while waiting to greet customers outside the PVR Icon cinema at the DLF Promenade Mall in New Delhi, India. (Photographer: Anindito Mukherjee/Bloomberg)

Shares of PVR Ltd. rose on the back of a lower-than-expected quarterly loss.

The multiplex operator’s loss stood at Rs 49.2 crore for the three months through December, compared to the Rs 213-crore consensus estimate of analysts tracked by Bloomberg.

Revenue declined 95% year-on-year to Rs 45.4 crore as the company gradually opened cinemas at restricted capacity following the Covid-19 induced lockdowns—compared with the consensus estimate of Rs 101.9 crore.

“We have cautiously started resuming our operations, introducing the best in the industry hygiene and safety standards, across all cinemas, to make our patrons feel safe and secure while enjoying the big screen experience,” the company said in a post-earnings statement.

Operating loss for December quarter was Rs 78.2 crore—lower than the analysts’ estimate of Rs 92.65 crore. The company reported an operating profit of Rs 307.1 crore during the same period a year ago.

“Even post reopening, the combination of staggered state-wide reopening, capacity restrictions and limited movie releases impacted the admit levels while costs continue to be incurred,” the company said, adding that settlements have been reached with landlords for 88% of cinemas for complete or partial waiver or discounts for the lockdown period.

Cinemas across the country had reopened in most states in the middle of October with 50% capacity. “We’re yet to reopen 56 screens in 13 cinemas as of Jan. 15, 2021,” the company said.

Management Commentary:

  • Have been able to achieve significant reduction in our fixed cost during the period of lockdown.
  • Raised additional borrowings from existing bankers to shore up liquidity.
  • Cash and bank balance of Rs 373 crore, including investments as of Dec. 31, 2020.
  • Have negotiated with the suppliers and vendors for an alternative payment schedule for clearing opening outstanding.
  • Significantly reduced capex outlay during the lockdown with minimal capex spends on projects that have been in advanced stage of construction.
  • Have reasonable liquidity to meet all debt and interest obligations for the next few months.

Shares of PVR ended 2.6% higher at Rs 1,473.9 on Jan. 15—the highest in over a month. Out of the 30 analysts that track the stock, 21 have a ‘Buy’ recommendation, five suggest ‘Hold’ while four have a ‘Sell’ call.

The stock crossed its 12-month Bloomberg consensus price target of Rs 1,465.4 during trade today.