India’s leading multiplex chain, PVR INOX, has announced its strategy to discontinue operations at 50 of its screens over the coming half-year. This decision comes as a response to the diminished profitability of these properties and the declining future prospects of the malls housing them.
The company confirmed on Monday that these locations are either unprofitable or situated in malls nearing the end of their operational lifespan, with minimal chances for resurgence. Consequently, PVR INOX has expedited depreciation charges in its financial records and written off the remaining value of these assets.
PVR and INOX Leisure, formerly competitors, completed their merger in February 2023. This union led to the formation of the country’s largest multiplex chain, boasting 1,689 screens across 361 cinemas in 115 cities, distributed between India and Sri Lanka.
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In the last fiscal year, the joint entity launched 168 new screens across 30 cinemas. The company is now planning to introduce another 150-175 screens during FY24. “We have strategically realigned all upcoming site handovers for new fitouts to the next calendar year, in anticipation of a robust recovery in box office performance,” stated the post-Q4 results press release.
Reflecting on the past year, Ajay Bijli, PVR INOX’s Managing Director, said, “The past year was marked by the first full year of unencumbered operations for the exhibition industry. While there was significant quarter-on-quarter volatility at the box office, we foresee the two major hindrances of FY23 – underperforming Hindi films and fewer Hollywood releases – easing out in FY24.”
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Bijli also emphasized the strategic importance of the merger with INOX, stating, “The merger marks a significant milestone for both our company and the Indian film industry. The integration process is progressing smoothly, and we are confident of achieving operational synergies worth Rs 225 crore within the next 12-24 months.”
The merger, initially announced in March 2022, was an unexpected move prompted by extended cinema screen lockdowns and the rise of video OTT platforms due to the pandemic. The official merger took place on February 6, 2023. Co-CEOs of the unified entity, Gautam Dutta (former PVR CEO) and Alok Tandon (former INOX Leisure CEO), will now oversee operations in different regions of the country.
