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Eros Q3 net profit up 2.5 times at Rs 101.9 cr

MUMBAI: Eros International Media’s net profit for the quarter ended 31 December increased 2.5 times to Rs 101.9 crore compared to Rs 40.8 crore in the corresponding quarter of the previous fiscal year.

EBIT was up 99% at Rs 132.6 crore as against Rs 66.7 crore a year ago.

The company’s revenue was down 0.7% at Rs 335.8 crore as against Rs 338.2 crore. The company said that the marginal decrease in revenues was due to a narrower film slate comprising three medium-budget and five small-budget films in Q3 FY2017 as compared to one high-budget, four medium-budget and 10 small-budget films during Q3 FY2016, offset by comparatively stronger catalogue revenues.

Revenues during the period were driven by worldwide releases of Hindi films such as ‘Rock On 2’, ‘Kahaani 2’ (overseas), ‘Dishoom’, ‘Baar Baar Dekho’, ‘Banjo’, ‘Happy Bhaag Jayegi’, ‘Housefull 3’, ‘Ki and Ka’ and regional films such as ‘Sardaar Gabbar Singh’ (Telugu), ‘24’ (Tamil), ‘Janatha Garage’ (Telugu), ‘Happy Wedding’ (Malayalam), ‘Chaar Sahibzaade 2’ (Punjabi), etc. across theatrical, overseas and satellite revenues, reinforcing the portfolio and film mix strategy.

Operational Highlights

  • Refocus on library monetisation and strong presales ensures a profitable quarter
  • Theatrical performances of movies such as ‘Rock On 2’, ‘Kahaani 2’ (Overseas), ‘Chaar Sahibzaade 2’ (Punjabi), ‘Double Feluda’ (Bengali) received subdued response at the box-office primarily due to the temporary effects of the demonetisation in India
  • The company released a total of eight films during the quarter (15 films in Q3 FY 2016). This was also due to holding back further releases in the quarter until the negative impact from demonetization subsides.
  • Strong pre-sales strategy safeguarded overall performance—65% of the total film slate cost in Q3 FY17 covered through satellite, overseas and theatrical pre-sales.
  • In the second half of FY16, the company had held back catalogue revenues to bring about balance sheet efficiencies. In FY 17, it significantly caught up with those sales, with substantial revenues this quarter being contributed from catalogue monetisation.

Diversified revenue mix

Theatrical revenues contributed 35.5%, overseas revenues 30.4%, and television  and others 34.1% as a percentage of income from operations.

Trinity Pictures: Building franchises and not just films

  • Trinity’s first franchise film ‘Sniff’, a superhero film directed by Amole Gupte, is slated for 5 May release.
  • Sniff comics to be distributed by Diamond Comics, first comic to be published in February.
  • Sniff Arcade Game in partnership with Viaan Studios will be launched as a mobile game.
  • A tie-up with Imagica for licensing the Sniff merchandise
  • Animation series for digital/television in partnership with Green Gold post-film release.
  • Three brands are already on board for in-film integration.
  • In pre-production and casting for five other franchises, three of which will enter production in 2017. These include two Indo–China productions:
  • Live-action bilingual (Hindi & Tamil) elephant film directed by Prabhu Solomon
  • Ace director Krish’s buddy cop film, shot in Hindi and Tamil simultaneously
  • Two Indo-China co-productions; Kabir Khan’s travel drama, ‘The Zookeeper’ & Siddharth Anand’s cross-cultural romantic comedy, ‘Love in Beijing’
  • Trinity Writers Room has completed development on 15 other franchises and 80 film concepts. While not all of these will turn into films in the next three years, plans are underway to develop some of them into comic /novels, etc.
  • More than 50 movies with more than 40 directors across eight languages.
  • Nine Bengali Films, including Soumitra Chatterjee’s ‘Posto with Windows’
  • Five Malayalam films, including Maqtro Pictures’ ‘C/O Saira Banu’ starring Manju Warrier
  • A line-up of five Tamil films including films directed by Manikandan and Venkat Prabhu.
  • Four Marathi films with Everest Talkies, including Hemant Dhome’s ‘Baghtos Kay Mujra Kar’ and Prakash Kunte’s sequel to ‘Coffee ani Barach Kahi’
  • Two Punjabi films with Baweja Movies, including Harry Baweja’s ‘Guru Tegh Bahadur’ & ‘Jaita’
  • Two Telugu films with Idream Production

Commenting on the performance, Eros International Media Executive vice chairman & MD Sunil Lulla said, “This quarter results gave us a chance to bring out the strength of our valuable library. In spite of demonetisation move by the government which had a temporary negative impact on theatrical revenues, we demonstrated our robust business model by bringing in strong contributions from catalogue sales across television and other distribution channels. ‘Rock On 2’ although impacted directly by the demonetisation benefited from strong pre-sales in television and digital streams. Although the movies released during the quarter witnessed weak box office performances due to lack of footfalls, we firmly believe, that the demonetisation step, in the longer term, will throw up a huge opportunity for us to strengthen our lead in corporatising the Indian Media and Entertainment industry.

“As we look ahead, we are investing smartly for the longer term in line with our portfolio approach across varied budgets and languages. Our strong industry-leading production slate of over 50 movies in CY2017 has gone through a stringent green-lighting process for many months. The upcoming line-up includes highly promising projects such as five films from Trinity, two Indo-China co-productions, a Shah Rukh Khan film from Color Yellow, two sequels from our own IPs like ‘Vicky Donor 2’, ‘Badlapur 2’, ‘Munna Michael’ starring Tiger Shroff, ‘Chanda Mama Door Ke’ starring Sushant Singh, among others.”