Multiplex revenue to exceed pre-pandemic levels in FY23: Report

 

ICRA said higher average ticket prices and per capita spending on food and beverages would drive overall revenue growth.

According to credit rating agency Icra, the revenue of the multiplex industry will exceed the pre-pandemic levels of FY20 by 6-8% in FY23. Higher average ticket prices 10-15% higher in FY2023 than pre-pandemic levels, and 30-35% higher per capita spending on food and beverage will drive overall revenue growth.

Despite revenue and margin growth, current occupancy levels (27-29%) are down from pre-pandemic levels of 32-33%. ICRA said that the industry made a great start to FY2023 with an occupancy level of 32% in the first quarter of FY2023. While occupancy declined sequentially during the second quarter due to a poor content line-up, a solid content pipeline and favorable consumer sentiments about watching movies in theaters are expected to propel occupancy in the coming quarters.

A return to the eight-week window between theatrical and digital premieres, like the pre-pandemic days starting August 2022, is likely to be beneficial for exhibitors. Total revenue and operating margin are expected to increase in H2 FY2023, due to recovery in high-margin advertising business, which has reduced from pre-pandemic levels by 35-40% in H1 FY2023. done. The industry profitability margin for the full fiscal year 2023 is estimated to be 14-16%, compared to operating losses in the last two years.

“The film exhibition industry has witnessed a healthy rebound in performance in FY2023, indicating that the cinema experience continues to have an impact on consumers. Given the healthy content pipeline in the coming months and encouraging consumer sentiments towards watching movies in theatres, occupancy levels are expected to improve in H2 FY2023 after a hiatus forced by the pandemic," Ritu Goswami, Sector Head, Corporate Ratings, ICRA, said in a statement.

The outlook revision from negative to stable reflects ICRA's expectation that occupancy will touch pre-Covid levels in the coming 12 months. With recovery in footfalls, higher ATP, higher SPH and recovery in ad business supported by premiumization of screens, positive operating profit growth is expected, leading to improved profitability margins, he said.