Mumbai: Remember those carefree days when a weekend meant one thing—heading to the cinema, popcorn in hand, with family or friends by your side? Or the thrill of slipping out of a college lecture, knowing a movie adventure awaited? Those were the golden days of cinema. Yet, post-Covid, the big screen seems to have lost some of its allure, and Cineline India’s recent Q2 FY25 results tell a sobering story. Released today, the report reveals an industry grappling with the harsh realities of a shrinking audience base and mounting financial strain. For the quarter ending 30 September 2024, Cineline’s revenue from operations saw a steep 12.47 per cent drop, falling to Rs 5,583.66 lakhs from last year’s Rs 6,378.72 lakhs. As operational expenses climb and finance costs escalate, the road to profitability is riddled with challenges.
The numbers reveal a company grappling with mounting expenses and shrinking profits. Total income for the quarter was Rs 5,617.60 lakhs, a decline from the previous year’s Rs 6,455.44 lakhs. Cineline’s movie exhibition cost—a significant operational component—reached Rs 1,583.38 lakhs, compared to Rs 1,931.11 lakhs last year. This reduction in costs was likely an attempt to mitigate the impact of lower revenues; however, it did not prove sufficient to offset other rising expenses. Notably, finance costs surged to Rs 727.95 lakhs, from Rs 716.53 lakhs in Q2 FY24, placing further pressure on profit margins.
Cineline’s operating loss for continuing operations stood at Rs 607.30 lakhs, a sharp contrast to last year’s profit of Rs 702.36 lakhs. This swing into negative territory highlights Cineline’s current financial strain, driven by a combination of weaker income and heightened expenses. Although depreciation and impairment expenses rose to Rs 550.60 lakhs from Rs 489.09 lakhs, the overall expenses have grown notably, stressing the profitability margins.
Further complicating Cineline’s financial landscape are discontinued operations associated with R&H Spaces Private Limited, its wholly-owned subsidiary classified as ‘Non-Current Assets held for sale’. This segment reported an after-tax loss of Rs 348.10 lakhs, exacerbating the company’s financial position. This negative outcome contrasts sharply with last year’s profit of Rs 15.51 lakhs, a downturn driven by market fluctuations and an inability to find prospective buyers swiftly enough to offset expenses.
For stakeholders, Cineline’s Q2 FY25 results indicate an increasingly challenging environment in cinema exhibition. While the company has undertaken cost-cutting measures, the sharp decline in revenues and heightened financial costs have reduced the scope for quick turnaround. As Cineline aims to divest from non-core assets and consolidate its focus, the current financial constraints reflect a period of adjustment and realignment. However, the path to recovery may hinge on the company’s ability to attract new investment, manage rising operational costs, and secure strategic divestitures for better liquidity.
Cineline India Q2 FY25 Financial Highlights:
1. Revenue Decline: Revenue from operations dropped by 12.47 per cent YoY to Rs 5,583.66 lakhs, down from Rs 6,378.72 lakhs in Q2 FY24.
2. Total Income: The total income stood at Rs 5,617.60 lakhs, a decrease from Rs 6,455.44 lakhs last year.
3. Operational Loss: Operating loss for continuing operations was Rs 607.30 lakhs, a reversal from last year’s profit of Rs 702.36 lakhs.
4. Increased Finance Costs: Finance costs rose to Rs 727.95 lakhs from Rs 716.53 lakhs in Q2 FY24.
5. Overall Profit/Loss: Net loss from continuing and discontinued operations was Rs 963.07 lakhs, reflecting the challenging operational environment.
