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Eros International begins FY2019 on a strong footing; PAT up by 22.8% in Q1

Eros International Media Ltd, a leading global Indian film and digital studio, has reported Profit After Tax (PAT) of Rs 593 million for the first quarter ended June 30, 2018. PAT margin expanded to 26.5 per cent in Q1 FY2019 from 17.7 per cent in Q1 FY2018. 

EBIT stood at Rs 967 million, up by 30.5 per cent from the corresponding quarter of the previous fiscal, while EBIT margin expanded to 43.2 per cent in Q1 FY2019 from 27.1 per cent in Q1 FY2018. 

Theatrical revenues contributed 30.7 per cent to the overall revenues in Q1 FY2019, while overseas revenues contributed 12.6 per cent and Television & Others contributed 56.7 per cent as a percentage of income from operations. 

During the quarter, Reliance Eros Productions LLP was formed to co-produce and consolidate content with $150 million joint fund, even as Reliance Industries completed acquisition of 5 per cent stake in Eros International at $15.00 per share. 

Key Business Highlights & Announcements: 

  • 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)
  • Eros and veteran writer V Vijayendra Prasad have agreed to partner and jointly develop scripts, greenlight projects, produce & distribute films and web-series across Hindi, Telugu and Tamil languages. 10 stories are already in the pipeline 
  • 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 host of new content series including short form web series, short films, as well as digital films on Eros Now.

Eros maintains focus on films with high ROI potential and augment the library with quality content for exploitation through the distribution channels and explore new bundling strategies to monetise existing content. It has enhanced the momentum to invest in future slates, which comprises a diverse portfolio mix ranging from high budget global theatrical releases to lower budget movies with targeted audiences. Eros continues to leverage the longstanding relationships with creative talent, production houses and other key industry participants that have been built from founding years to source a wide variety of content. 

Commenting on the Q1 FY2019 performance, Sunil Lulla, Executive Vice Chairman & MD, Eros International Media Ltd, 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 green lighting 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 Q1 FY2019. The new JV kicking in with V Vijayendra Prasad for Hindi and regional content and Reliance Eros Productions LLP for $150 million already in process is bound further boost our content strategy and reflect in our financial performance in the forthcoming quarters.” 

He further said, “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 monetisation of our films’ library further supported the performance during the quarter.”

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