Eros Q1 net profit jumps 23% on lower expenses

MUMBAI: Eros International Media’s net profit for the quarter ended 30 June has jumped 23% to Rs 59.3 crore as against Rs 48.3 crore in the same quarter of the previous fiscal. Adjusted EBITDA was down 1.5% to Rs 110.1 crore compared to Rs 111.8 crore.

The company’s revenue has fallen 18.2% to Rs 223.6 crore compared to Rs 273.4 crore. Expenses dropped sharply at Rs 146.4 crore as against Rs 217.8 crore.

Theatrical revenues contributed – 30.7%, Overseas revenues – 12.6% and Television & Others – 56.7% as a percentage of income from operations.

Eros released 14 films in Q1 FY2019 (1 medium budget and 13 small budget films) as compared to 5 films in Q1 FY2018 (1 high budget, 1 medium budget, and 3 small budget films)

The company revenues were driven during the quarter with the releases ranging across regional languages – Bhavesh Joshi (Hindi), Meri Nimmo (Digital release), Blackmail (Overseas), Haami (Bengali), Goodnight City (Bengali) and Alinagarer Golokdhadha (Bengali) and others

Eros successfully premiered India’s first straight to digital film, Eros Now original, “Meri Nimmo” on the platform. TV and Others segment included satellite sales of catalogue films to Zee Entertainment Network and more

Eros remains focused on its film pipeline, with 40–50 films across genres, Hindi and regional languages slated to release during this financial year, a comprehensive slate of forthcoming releases will see Happy Phir Bhaag Jayegi, Manmarziyaan, Tumbadd and Take Care Good Night (Marathi) shortly. In addition, it plans to release a host of new content series including short-form web series, short films, as well as digital films on Eros Now.

Commenting on the performance of Q1 FY2019, Eros International Media Executive Vice Chairman & MD Sunil Lulla said, “We have started the year on an excellent note on operational and strategic parameters. Our strategy of a content-driven approach reflected in a robust greenlighting process enabling us to de-risk our model. Our film content is deeply researched and evaluated for its revenue potential across platforms and markets by our business leaders, due to which we were able to again deliver margin enhancing performance in Q1FY2019. The new JV kicking in with V. Vijayendra Prasad for Hindi and regional content and Reliance Eros Productions LLP for USD 150 mn already in process is bound to further boost our content strategy and reflect in our financial performance in the forthcoming quarters.”

The first quarter was marked by the successful releases of our films which contributed to the overall growth. Our strong slate across languages, active pre-sales and catalogue monetization of our films’ library further supported the performance during the quarter. Looking ahead, we have drawn a compelling line-up for the remainder of the year featuring high-potential movies such Çolor Yellow Productions “Happy Phir Bhaag Jayegi”, Anurag Kashyap’s “Manmarziyan”, the India-China co-productions, ‘Panda’ by Kabir Khan, trilingual “Haathi mere Saathi” and multiple other films across languages.

He further added, “As always, we continue to be a pioneer in industry innovations in catering to the changing tastes and preferences of the audiences. In this quarter, we released “Meri Nimmo” straight-to-digital on the Eros Now platform. I am happy to share that the film received a tremendous response from the audience and we look forward to launching more such films and originals on the Eros Now platform during the course of this fiscal. Along with it the roll-out of fresh and strong original content, makes us confident that the pace of subscriber addition for Eros Now will further accelerate, going from 50 to 100 cities and almost doubling the subscriber base to 16 million by end of the Fiscal year.

Eros continue to be focused on ramping up productions and co-productions through key partnerships. These partnerships include the partnership with talented producer-director, Aanand L Rai (Colour Yellow Production) and partnership with Reliance to equally invest up to $150 million to produce and acquire Indian films and digital originals across all languages. This investment will dramatically scale Eros’ capabilities in content production, marketing, and distribution. Eros and Reliance formed Reliance Eros Productions LLP which will make new strides on the digital and content forefronts, benefitting from the platform synergies across technology, content and digital platforms.

Eros International also formed a JV with veteran writer V. Vijayendra Prasad, applauded for his work in movies like Baahubali, Makhkhi and Magadheera to name a few, V. Vijayendra Prasad is a name synonymous with stories that live forever. The joint venture has also identified 8 to 10 leading directors that will be announced soon. These include a family action thriller by acclaimed Telugu director Sukumar, another thriller in Tamil and Telugu by S.S. Kanchi and Sriman making his Hindi directorial debut under the joint venture. Eros and Vijayendra Prasad last came together for Bajrangi Bhaijaan, which was a spectacular success worldwide including India and China.

It is also ramping up its digital content creation with a strong slate of Eros Now originals with global concepts that will entertain audiences are being produced internally in partnership with the best talent.

Over the next year, Eros Now is planning to launch an exclusive stable of feature films, made-for-digital originals films and over 20 original episodic programs, out of which three ‘Original’ series – Flip, Smoke and Side Hero will be launched at the beginning of September. Originals will have popular names like Rohan Sippy, Kunal Roy Kapoor, Rajat Kapoor, Siddharth Anand and Pavan Kriplani associated with them in various capacities.

Eros has also partnered with Phars Film, one of the UAE’s largest film distribution and exhibition network. Eros also intends to partner with Pana Film, one of the largest Turkish film studios for Indo-Turkish co-productions. The company also has a distribution partnership with Central Partnership in Russia, that may open new markets for Eros releases. These strategic partnerships not only help Eros augment in-house content production model but also expand the geographical canvas for content monetization.

Meri Nimmo and Toffee are live on the platform, upcoming titles like Blue Oak Academy, August 25th, Flesh, Bhumi, Dashavatar, Hacked, Minerva Mills Malady and Kurukshetra will range across genres of drama, comedy, thriller, crime, horror, and mythology.

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