PVR INOX Ltd, a leading multiplex operator in India, has announced plans to shut down 50 loss-making cinemas over the next six months. The company, which recently emerged from the merger of India’s top two multiplex operators, reported a quarterly loss of 3.33 billion rupees ($40.72 million) on Monday. This loss was primarily attributed to one-time impairment charges and expenses related to the planned cinema closures.
The company, formed by the merger of India’s top two multiplex operators earlier this year, said it took an accelerated depreciation charge of 105.8 million rupees on 50 loss-making cinemas it plans to shut down over the next six months.
Cinema operators in India have been struggling ever since the pandemic, when a lockdown forced people home and made streaming more popular among movie enthusiasts, prompting PVR and Inox to join forces.
PVR had reported a loss of 1.05 billion rupees a year earlier, when the two companies were separate.
“While there has been some volatility at the box office over the past few months, we are confident that this trend will settle down over the next two to three quarters,” PVR INOX said.
As part of its strategic restructuring, PVR INOX Ltd has decided to streamline its operations by closing down cinemas that have been consistently generating losses. To account for this action, the company has taken an accelerated depreciation charge of 105.8 million rupees on these 50 cinemas. The closures are expected to be completed within the next six months.
The decision to shut down these loss-making cinemas comes as a result of a comprehensive evaluation of their financial performance and market dynamics. PVR INOX Ltd aims to optimise its resources and focus on theatres that are more financially viable and align with its long-term growth strategy.
