Multiplex Revenues Surpasses Pre-Pandemic Level By 6-8%: Report

According to credit rating agency Icra, multiplex industry revenues will surpass pre-pandemic levels of FY2020 by 6-8 per cent in FY2023. 

Total revenue growth will be aided by higher average ticket prices that will increase by 10-15 per cent in FY2023 over pre-pandemic levels and by 30-35 per cent more money spent per person on food and drink.

The current occupancy levels, at 27–29 per cent, are still below pre-pandemic levels of 32–33 per cent notwithstanding revenue and profit growth. With occupancy levels of 32 per cent in the first quarter of FY2023. 

According to Icra, the industry had a fantastic start to the year. While a lacklustre content lineup caused occupancy to decline sequentially during the second quarter, occupancy is predicted to increase in future quarters due to a strong content pipeline and positive consumer perceptions of going to the movies.

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

Beginning in August 2022, the pre-pandemic eight-week buffer between theatrical and digital premieres will be reinstated, which is expected to be advantageous to exhibitors. 

Due to a rebound in the high-margin advertising sector, which underperformed pre-pandemic levels by 35–40 per cent in the first half of FY2023, overall revenues and operating margins are predicted to increase in the second half of FY2023. 

For the entire fiscal FY2023, the industry profitability margin is forecast to be 14–16 per cent, compared to operational losses in the preceding two years.

The outlook revision to stable from negative reflects Icra’s expectation that occupancy will touch pre-covid levels in the ensuing 12-month period. 

With recovery in footfall, higher ATP supported by premiumization of screens, higher SPH and recovery in advertising business, the positive operating leverage are expected to play out, leading to improvement in profitability margins, she added.