Mumbai: Movie producer and distributor Eros International Media Ltd (EROS.NS) expects earnings to rise 30 percent both this fiscal year and next as Indian film-goers clamour for more 3D and other digitally enhanced offerings, its chief financial officer said.
Eros, a unit of Eros International Plc (EROS.L), is counting on a large line-up of big-budget productions and improving ticket sales after a dearth of movie releases in India hurt sales and earnings in the second quarter, Kamal Jain said on Thursday.
Second-quarter net profit fell 40 percent to 273.5 million rupees, reflecting one-off gains a year earlier. Sales fell 6 percent to 1.75 billion rupees.
Eros, which recently produced the Shah Rukh Khan sci-fi film 'Ra.One' in 3D, has three more 3D movies in the pipeline and at least five big-budget films set for release in coming months.
At least four 3D movies are scheduled for release in India this year, up from three last year. These include Eros's 'Kochadaiyan', featuring superstar Rajnikanth, who has achieved cult status in the south.
"The new wave of 3D movies is driving growth in this industry as it increases footfalls (ticket buyers) by 30-40 percent," Jain said. "3D brings in people to the theatres as most of the people cannot watch it at home."
Eros also expects to boost revenue through content-sharing deals with new media platforms such as video websites as demand for content increases, he said.
"We have already digitised our entire library ... We are planning to announce a deal in this space very soon, sometime in this quarter, which will be a big boost to our revenues," Jain said, without providing details.
The company, which has released about 75 movies every 12-18 months in recent years, said last month it planned to release at least 50 films over the next year-and-a-half.
Eros plans capital expenditure of about 12 billion rupees over the next two years, up about 1 percent from the previous two years and largely funded internally, Jain said.
Net debt as of September 30 was 500 million rupees.
The company, which listed its shares in 2010, reported a net profit of 1.17 billion rupees on sales of 7.07 billion rupees in the year to March 2011.
Global Distribution Deals
Eros recently tied up with Dharma Productions to distribute the latter's action film 'Agneepath', starring Hrithik Roshan, to theatres outside India, and Jain said the company expects to sign more such deals in the coming months.
These deals can be lucrative because overseas ticket prices are often double those in India, where an average movie ticket costs about $5.
Jain declined comment on media reports that parent Eros Plc plans to buy out all the shares it does not already own in UK Hindi entertainment channel B4U Television. Eros owns a 24 percent stake in B4U.
Eros, which has a presence in India's Tamil, Punjabi and Marathi language markets, plans to increase regional market earnings from the current 10 to 15 percent, Jain said, declining to elaborate.
Eros traditionally invests about 15 percent of its capital expenditure in regional films and the rest on Hindi language films, Jain said.
Shares of the company, which has a market value of about $365 million, rose about 29 percent in 2011. The stock closed 2.6 percent down at 211.3 rupees on Thursday.
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