Cineline India Limited: Monetization of Hotel Asset for INR 270 crores

Cineline India Limited: Monetization of Hotel Asset for INR 270 crores

  • Commenting on the Company's performance, Mr. Ashish Kanakia, CEO of Cineline India Limited, said,
    • Over the past three years since launching film exhibition business, have surpassed INR 200 crores in revenue, marking a 2X increase in revenue and a 4X growth in EBITDA compared to first year. 
  • Have enhanced operational efficiency by renegotiating lease terms with developers and exiting underperforming screens to optimize costs which has helped us improve profitability. 
  • Have successfully completed the sale of hotel asset for an enterprise valuation of INR 270 Crores, allowing  to fully concentrate on expanding core film exhibition business. 
  • This move will accelerate growth and help expand market presence through addition of new screens. 
  • With debt of INR 228fully repaid, have strengthened financial position which will be reinvested to drive business growth. 
  • By leveraging innovative strategies such as expanding screens through a Low Revenue Share or profit-sharing model with developer-funded capex, are well-positioned to capitalize on the anticipated box office revival, unlocking significant upside potential. 
  • During the quarter, film exhibition segment witnessed robust growth, driven by the successfulrelease of ‘Chhaava,’ followed by ‘Sky Force’. 
    • Pleased to share that ‘Chhaava’ achieved the highestrevenue in Cineline’s history, with gross collections of approximately INR 24 crores. 
  • Recorded around17 lakh admissions, reflecting a 31% year-on-year growth. 
  • Excited to announce the launch of the 'Infinity Format' screen at Ghaziabad location, underscoring commitment to premium cinematic experiences. 
  • Additionally, we introduced the ‘MaxRecliner Club,’ offering exceptional in-auditorium services for our patrons. 
  • The upcoming release of Bollywood films such as Housefull 5, Sitare Zameen Par, and Sardarji 3, along with Hollywood blockbusters like Mission Impossible 8 and Jurassic World: Rebirth, is expected to significantly boost footfalls and elevate the overall theatrical experience. 
  • Looking ahead to FY26, plan to open over 25 new screens and expand strategic partnerships to support growth ambitions. 
  • By FY26, anticipate maintaining a cash reserve of INR 80–100 crores*,which will further support the expansion of film exhibition business.
  • Monetization of Hotel Asset for INR 270 crores 
  • Proceeds facilitated total debt reduction of INR 228 Crores (including hotel asset-related and othercompany debt), leading to a debt-free status
  • Surplus funds to be deployed towards expansion of the core film exhibition business 
  • The company has outlined three key strategic priorities to drive the growth of its core film exhibition business
  • Generating Sustainable Free Cash Flow: 
    • With debt reduction through the hotel sale, the company will now save ~INR 22 Crores annually in debt servicing, allowing for regular free cash flow generation. 
    • This will support planned expansion of new screens.

1. https://youtu.be/KJ2uO9mCDnA?si=X9ylid-ANaQu4lCb 

2. https://youtube.com/shorts/cXRrZZLr_YY?si=iJMx67oIRYmMXcvL

3. https://youtu.be/RlANoKhE2pw?si=4ohVq4DgfQtHxm1c

I spend most of my time in thinking towards turnaround strategies that if they play out well, what are the odds of them being successful along with risk involved.

  • Cineline India re-enters film exhibition business with MovieMax brand

  • The company, which had been present in this business since 1997 under the brand name of Cinemax, recently re-branded itself as MovieMax

  • Earlier on April 1, PVR had announced the discontinuation of its operations of 23 screens across nine properties after the expiry of their lease with Cineline India.

  • Cineline had leased out nine properties with 23 screens to PVR for running multiplex operations.

  • The group marked its foray into the film exhibition business in 2002 through CIL owning & operating one of the reputed multiplex chains – Cinemax. 

  • However, in 2012, the company sold its Cinemax brand as well as operations to PVR Limited (PVR) and changed its business model from film exhibition to owning & leasing of cinema halls to PVR for the latter to run its film exhibition business.

  •  Hence, from 2012 till March 2022, the company generated a major part of its revenues from PVR. However, w.e.f. April 1, 2022, the company marked its re-entry into the film exhibition business by terminating the lease agreements with PVR and developing its own brand – Moviemax. 

  • Hence, since April 2022, Moviemax is operating as a full-fledged multiplex chain.

  • The Company expects to realise an amount of Rs. 350 crores out of the sale proceeds from Hyatt Centric Hotel, Goa. In case of non-realization of the hive off plan, the Company believes that the hotel will generate healthy business and EBITDA going forward.  

  • 29 Cinemas with  26,000+ seats 
  • Admits (# Lakhs):  35.8 
  • Hotel Business – Hyatt Centric, Goa :  5 Star Premium Leisure Hotel 
    • 168 keys

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