Highlights of the call

• For Q4FY09, the Company expects revenues of Rs 40 crore taking the total revenues for the year at about Rs 150 crore. For FY10, the Company is confident of achieving revenues of about Rs 230-240 crore.

• The management is of the view that entertainment spend is not impacted by recession.

• For the third quarter of FY09, on consolidated basis, Cinemax reported 37% growth in operating revenues at Rs 37.72 crore with operating margins dipping 40bps at 22.9% and the PAT de-grew 42% at Rs 2.06 crore on the back of higher deferred tax asset created on windmill project.

• Of the total revenues of Rs 117 crore, ticket sales were Rs 73 crore, F&B revenues were Rs 18.40 crore, advertising revenues Rs 8 crore, gaming Rs 2 crore, distribution revenues of Rs 6.5 crore, Mall rentals of Rs 2.23 crore, gain of sale of mutual funds of Rs 3 crore and others Rs 4 crore.

• During the quarter, the Company commissioned a multiplex in Kolkata with 4 screens and 1200 seats. The Company also opened 2 Food-courts.

• The fire at the Versova property in Mumbai impacted operations for 26 days leading to loss of revenues of Rs 2.5 crore and profits of Rs 90 lakh.

• In January 2009, the Company opened 2 new properties in Kalyan and Hyderabad. The total number of properties has increased to 25 properties, with 74 screens and 20305 seats.

• The Company plans to increase the number of properties to 28 locations with 83 screens and more than 23000 seats.

• For 9MFY09, footfalls were 66 lakh up from 48 lakh with occupancy down at 27% from 31% and ATP of Rs 129 and spend per head of Rs 30.

• The Company plans to add atleast 50-60 screens per year. The capex per year would be 60 crore with funding of 60-65% from debt and balance from internal accruals. The capex per seat is Rs 60000-70000.

• The consolidated debt is Rs 75 crore and cash is Rs 2 crore. The interest rate is about 12.5%.

• The company has re-negotiated rent downwards at 3 of its properties. Currently, all properties are on foxed rent model.

• The rental cost is at 11.3% as a % of sales. The Company is comfortable with a level of 16-18%.

• The yield on windmill business is about 12-13%. Alongwith the tax benefit, the yield would go upto 16-17%. The Company has entered the business mainly to get tax benefit. Also, after 5 years there is regular annuity revenue from the business.

• 50% of the properties of the Company have Entertainment tax exemption. The Entertainment tax as a % of revenues is 12%.