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January 2021
3:03 AM IST
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With morale running high, Aizawl FC aim for win over Indian Arrows        England bowl Sri Lanka out for 381 in 2nd test        Coal India says geared up to meet any surge in fuel demand from power sector        Customary 'Halwa Ceremony' kickstarts process of compilation Budget documents        Larry King, broadcasting giant for half-century, dies at 87        UN: Violence in Sudan's Darfur killed 250, displaced 100,000        At 78 and the oldest president, Biden sees a world changed        Delhi Police has given nod to farmers' tractor parade on Jan 26, claim protesting unions        Govt to continue ban on Chinese apps including Tiktok        Rahul Gandhi assures revisiting GST when Cong is voted to power at Centre        Strong India following Netaji's footsteps, from LOC to LAC: PM        Stage set for grand finale of 23rd JK Racing Tyre National Racing Championship        India's track and field athletes to have first shot at Olympics in IGP Series starting Feb 18        Red carpet welcome for Rahane; Siraj heads straight to father's grave        Average flat size increases 10 pc in 2020 across 7 cities to 1,150 sq ft: Report        Rupee gains 6 paise to close near 5-month high of 72.99 vs USD        Experts: 15 more days to reach trapped China mine workers        Global Teacher Prize winner Ranjitsinh Disale hails Biden's education focus        India provides 1 million doses of COVID-19 vaccine to Nepal        SC notice to Centre, others on plea against web series Mirzapur'        
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Business News
PVR defers capex plans to control costs amid COVID-19 disruptions
 
New Delhi: Multiplex major PVR has deferred its capital expenditure plans in a bid to control costs as the company braces for a significant impact on its profitability in the current fiscal due to the ongoing COVID-19 pandemic.

Cinema halls in India have remained shut since March this year, after the government imposed nationwide lockdown to check the spread of COVID-19.

"We have temporarily deferred a substantial portion of our planned capital expenditures that we were undertaking, prior to the shutdown. All major capital expenditures will now be re-assessed once the shutdown is over," PVR Ltd Chief Operating Officer (CFO) Nitin Sood said in the company's Annual Report for 2019-20.

PVR owns a network of 845 screens across 176 properties in 71 cities in India and Sri Lanka.

In 2019-20, PVR added 87 screens to its portfolio.

PVR, in its annual report, said since cinema exhibition is its only business segment, the company is currently not generating any revenue from admissions, food and beverage sales or other revenue and cash-flow from operations.

The company said it upholds its cash outflow commitments, including employee salary pay-outs, other overheads, as well as payments for older working capital.

Shutdown of cinema halls has and will continue to have a significant negative impact on profitability and liquidity during the lockdown and even thereafter till business comes back to normalcy, PVR said.

PVR pointed out that even after cinema halls are re-opened, the company may not be able to run its establishments at normal capacity utilisation levels on account of social distancing measures that cinemas may be required to follow as well as health concerns that the patrons may have.

"Therefore, the company's revenue and cash flow generation may be impeded even once it is allowed to restart operations...Our operations for FY 2020-21 will be significantly affected, as significant period of FY 2020-21 will be lost due to lockdown," it said.

For the fiscal year 2019-20, PVR's net profit was at Rs 26.85 crore. It was Rs 189.40 crore in 2018-19.

PVR said it is taking decisive actions to mitigate the impact of COVID-19 on its business and has implemented cost reduction strategies such as halting all non-essential operating and capital expenditures, implementing a daily CFO review and approval for all outgoing procurement and payment requests and significant payroll reduction for corporate employees.

PVR said it has reduced personnel cost through measures like layoffs/ retrenchments and reduction in salaries of employees during lockdown. The company said it reduced salary for senior management by 50 per cent and for other staff in the range of 20-35 per cent.

The company, in its annual report, said it has written to developers for waiving rental and common area maintenance (CAM) charges for the lockdown period and is in discussion with developers for reducing rentals post re-opening.


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