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Eros’ content investment in FY17 pegged at $225 mn

MUMBAI: Eros International Plc, the parent company of Eros International Media, has pegged its content investment in FY17 at $225 million. This includes investment in its over-the-top (OTT) service Eros Now.

Prem Parameswaran Group CFO and President of North America for Eros International“Our outlook for content investment in Fiscal 2017, including investment for Eros Now, is $225 million,” Eros International Plc group chief financial officer and president North America Prem Parameswaran said.

Parameswaran further added that the investment in content, including investment for Eros Now, was on track at $211.3 million in FY16 compared to $276.2 million in the previous fiscal year.

Eros’ aggregate revenue from television syndication in FY16 decreased 28.8% to $72.1 million from $101.2 million a year ago.

The company said that a large portion of the contract value adds to the receivables not due, as catalogue revenues generally have longer payment cycles that vary from nine months to a year. It also said that foregoing a portion of potential catalogue sales in FY16 allowed it to achieve balance sheet efficiencies, although it came at the cost of short-term P&L sacrifice.

Bajrangi_Bhaijaan_PosterThe aggregate revenue from digital and ancillary services in FY16 increased 6.7% to $63.9 million compared to$59.9 million a year ago. This is due to revenues from Eros Now/Techzone and better realisation from other ancillary revenues such as music sales and in-flight entertainment.
For the 12 months ended 31 March 2016, Eros’ aggregate theatrical revenue increased by 12.4% to $138.4 million from $123.1 million a year ago.

Some of the company’s successful global releases were ‘Bajrangi Bhaijaan’, ‘Bajirao Mastani’, ‘Tanu Weds Manu Returns’, ‘Welcome Back’ and ‘Srimanthudu’, while its overseas releases were ‘Dil Dhadakne Do’, ‘Singh is Bling’ and ‘Gabbar is Back’.

bajirao-mastaniDuring the fourth quarter of FY16, the aggregate revenue from theatrical, television syndication, digital and ancillary services were $17.9 million, $ 26.5 million and $ 20.8 million, respectively, compared to $44.0 million, $25.8 million and $18.7 million, respectively, for the three months ended 31 March 2015.

The company has generated positive free cash flow of $21.8 million in FY16 compared to a loss of $159.6 million in FY15, primarily due to a 98.8% increase in operating cash flow.

It also reduced its net debt by 19.8% to $129.1 million in FY16 compared to $161.0 million in the previous fiscal, primarily on the strength of increased free cash flow from operations.

tanu weds manu returnsThe company’s revenues for FY16 declined 3.4% to $274.4 million compared to $284.2 million in the earlier year.

Adjusted EBITDA decreased 29.9% to $70.9 million in FY16 compared to $101.2 million a year ago.

For the fourth quarter ended 31 March, the company’s revenue decreased 26.4% to $65.1 million compared to $88.5 million in the prior-year period. This was because there was no high-budget release in the period compared to the prior year, as well lower catalogue revenues.

Adjusted EBITDA almost halved to $14.4 million compared to $30.0 million in the prior year.

Film slate in Q4 and FY16

welcome-backThe company released 63 films during FY16. Of these, six were high-budget, 16 were medium-budget and 41 were low-budget films compared to 65 films (6 high-budget, 12 medium-budget and 47 low-budget films) during FY15.

The company’s strong portfolio of films drove theatrical, television and digital/ancillary revenues worldwide with ‘Bajrangi Bhaijaan’, ‘Bajirao Mastani’ and ‘Tanu Weds Manu Returns’ taking No. 1, No. 3 and No. 4 positions on the box-office charts respectively. Other blockbusters such as ‘Welcome Back, ‘Singh is Bling’, ‘Gabbar is Back’ and ‘Dil Dhadakne Do’ gave Eros seven out of the top 15 box-office blockbusters of 2015. In addition to this, ‘Srimanthadu’ was the second-highest Telugu grosser of all time.

Srimanthudu_posterIn Q4, Eros released 12 films, of which six were medium- and six were low-budget films, against one high-, four medium- and 17 low-budget films released in the fourth quarter of FY15.

Theatrical revenues during the fourth quarter of FY16 were driven by releases such as ‘Dictator’ (Telugu), ‘Rajini Murugan’ (Tamil), ‘Guru’ (Marathi), ‘Sanam Teri Kasam’ (Hindi), ‘Aligarh’ (Hindi), ‘Phuntroo’ (Marathi), among other releases. The company’s tactical approach towards capitalising on the high-potential regional markets of Tamil, Telugu, Malayalam, Punjabi, Marathi and Bengali films has further reinforced its reach and scalability in these markets.

Trinity Pictures and the Indo–China opportunity

Dil Dhadakne DoThe first Indo–China film written and developed in-house by Trinity and to be co-produced with leading Chinese studio China Film Group will be directed by Kabir Khan, who also directed ‘Bajrangi Bhaijaan’. It will be shot simultaneously in both languages.

Eros expects this film to be released in FY18. Another Indo–China film, which is currently titled the ‘Wedding Film’, is also in advanced stages of casting and is expected to be released in FY18. Trinity Pictures will have four releases in FY18.

The children’s action franchise, directed by Amole Gupte, has finished pre-production and casting. It will begin shooting in July. The live action elephant film directed by Prabhu Solomon will go on the floors later this year. Both these films are targeting a release in summer 2017. The buddy cop film directed by Krish will also go into production soon.

Staying true to the promise of being India’s first franchise studio, Trinity Pictures is in active discussions with various partners to create a digital comic-book series, online gaming, animation series and merchandise for these franchise films.

‘Bajirao Mastani’ will be released in China in September 2016 across 6,000 screens, one of the widest ever releases for an Indian film in China, with the actors and director travelling to promote the film in China.

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