Prime Focus Ltd reported consolidated net loss of Rs7cr in Q3FY18 vs. net profit of Rs28.2cr in Q3FY17

India Infoline Research Team | February 16, 2018 14:53 IST

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Prime Focus Ltd Q3FY18

Consolidated Results Q3FY18: (Rs. in crore)

Q3FY18 YoY (%)
Revenue 609.60 20.2
EBITDA 120.60 8.7
EBITDA Margin (%) 19.8 [210]
Net Profit (adjusted) [7] NA
***EBITDA margin change is bps
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Reco. Price

109.45

Last updated on

25-Jan-2018

Prime Focus reported mixed set of numbers for Q3FY18 with healthy revenue growth, however, higher interest cost dragged the company into loss. Revenue grew by 20.2% yoy to Rs609.6cr. However, due to higher costs, EBITDA grew by only 8.7% yoy despite higher revenue growth. Higher technical costs (fee plus service cost) as percent of revenue led to 210bps yoy contraction in EBITDA margin to 19.8%. Higher depreciation and interest cost weighed down the performance and company reported loss of Rs7cr against profit of Rs28.cr in Q3FY17 and Rs21.9cr in Q2FY18.
  • During the quarter the movies which were delivered are : Justice League, Thor: Ragnarok, Hostiles, The Hurricane Heist and The 15:17 to Paris
  • Creative and Tech/Tech Enabled Services contributed 78% & 14% to revenues respectively.
  • Depreciation increased by 16% yoy to Rs75.8cr.
  • Interest cost almost doubled on yoy basis to Rs45.3cr on account of change in accounting treatment towards redemption premium on Standard Chartered PE NCDs. Earlier it was expensed as against capitalized in the Balance Sheet.
  • The company paid a tax of Rs9.1cr for the quarter on a PBT of Rs2.1cr.
  • Company's current order book for the Creative Service segment stands over $250mn owing to the projects like: Venom, The New Mutants, Ant-Man and the Wasp, Avengers: Infinity War, Mission: Impossible - Fallout, Godzilla: King of the Monsters, Pacific Rim: Uprising, and Fantastic Beasts: The Crimes of Grindelwald.
  • In the Tech Enabled Services segment, company has an order book of ~$200mn to be executed over next 4-5 years. Company added new clients like Discover and Spotify in the International markets. It also signed new contracts with existing clients such as Hearst, Sony Emerging markets, BCCI and Star TV.
  • Company announced issuance of warrants worth Rs3,300cr, on a preferential basis to the promoter and the raised funds are to be used primarily for debt reduction.
Con Call Highlights
  • In Q3FY18, company’s gross debt stood at Rs1,550cr while net debt stood at Rs1,450cr at consolidated level.
  • After the success of Padmaavat, company expects more usage of VFX and 3D in upcoming bollywood movies.
  • Revenue recognition happens on the basis of % of completion of efforts. Company estimates total efforts required at the beginning of the project.
  • Company’s revenue are not directly dependent on the performance of movies.
Technical View:

Prime Focus Ltd is currently trading at Rs. 109, up by 1 points or 0.93% from its previous closing of Rs. 108 on the BSE.
The scrip opened at Rs. 108.85 and has touched a high and low of Rs. 110.40 and Rs. 107 respectively. So far 74,525(NSE+BSE) shares were traded on the counter. The stock is currently trading above its 50 DMA.


***Note: This is a NSE Chart

 

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