A film exhibition company, a lower tax provision for current Q2 helped the company show a marginal rise in PAT. Its net revenue rose 27% at Rs.78.84 crore and despite a 30% rise in operating expenses, EBITDA was up 11%.
Interest outgo rose 105% and depreciation by 29%, resulting a 10% fall in PBT. The company for current Q2 made a tax provision of just Rs.64 lakhs as against Rs.3.31 crore in Q2FY08. This helped shore up the PAT, which showed a 27% rise at Rs.7.93 crore.
Why was the tax provision lowered? Tax has been calculated based on the profits of the business as reduced by the amount of entertainment tax collected at respective multiplexes operational at all states where exemption for entertainment tax is available (restricted to the amount of capital expenditure). Till the last quarter, the company considered such exemption amount for computing income tax provision only for cinemas operating in the state of Uttar Pradesh. As a result of above, tax provision for the current quarter is lower by Rs. 2.16 crore.
PVR has during the current Q2 commenced operations at Centra Mall, Chandigarh. It currently has upto 101 screes at 25 locations across 14 cities in 9 States and 1 Union Territory. In current Q2, there has been no addition to screens.
Surviving only on film exhibition will not give the company too much mileage and growth of profit margins would be restricted. Competitor Pyramid Saimira is developing its F&B segment and making it into a separate profit making segment.
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