Reports Revenue of $43.5 Million and Adjusted
EBITDA(1) of $18.6 Million
Eros Now Paying Subscribers Reach 21.1 Million
as of June 30, 2019
$60 Million reduction in Gross Debt
Eros International PLC (NYSE:EROS) (“Eros” or the “Company”), a
global Indian entertainment company, today announced unaudited
financial results for the first quarter fiscal year 2020.
(USD in millions) Q1
FY20 Q4FY19
Q3FY19 Q2 FY19 Q1
FY19 Gross Revenue (1)
$43.5
$79.0
$86.7
$72.3
$66.6
Reported Revenue
43.5
69.7
76.7
63.4
60.2
Y/Y % Growth
-27.7%
-3.1%
17.6%
0.2%
-1.0%
Q/Q % Growth
-37.6%
-9.1%
21.0%
5.3%
-16.3%
Operating Profit
1.0
-4.4
13.2
8.4
10.4
Operating Profit Margin
2.3%
-6.3%
17.2%
13.2%
17.3%
Adjusted EBITDA (1)
18.6
13.1
35.8
27.5
27.5
Adjusted EBITDA Margin
42.8%
18.8%
46.7%
43.4%
45.7%
Global Paid EN Memberships
21.1
18.8
15.9
13.0
10.1
Y/Y Growth
108.9%
138.0%
218.0%
251.4%
248.3%
Q/Q Growth
12.2%
18.2%
22.3%
28.7%
27.8%
Global EN Registered Users
166
154.7
142
128
113
Paid / Registered Users
12.7%
12.2%
11.2%
10.2%
8.9%
Films Released
12
16
25
17
14
Cash
$80.8
$135.8
$134.9
$134.9
$86.1
Gross Debt
220.9
280.8
294.0
297.0
272.9
Net Debt
140.1
145.0
159.1
162.1
186.8
(1)
A reconciliation of the non-GAAP financial measures discussed
within this release to the Company’s IFRS revenue and net income is
included at the end of this release. See also “Non-GAAP Financial
Measures”.
The Company made the following statement:
“We are pleased to announce a positive set of results this
quarter, with $43.5 million of revenue and $18.6 million in
adjusted EBITDA. The hard work and investment we have made in the
Eros Now platform continues to pay off. Our Eros Now business
offers users worldwide the promise of endless entertainment with
one of the largest libraries of Indian movies, as well as premium
television programmes, music videos and audio tracks, which are
unmatched in quantity and quality. As of June 30, 2019 the platform
reached 21.1 million paid monthly subscribers, a 109% increase over
the same period last year. We are planning to achieve at least 50
million paid monthly subscribers within the next three years. We
anticipate our registered user base to reach at least 200 million
by the end of the 2020 Fiscal Year. We have a very strong slate of
films and compelling original digital series scheduled for release
over the coming quarters, which we expect to help drive growth in
our Eros Now business.
Our strategy going forwards will pivot towards focusing on the
direct to consumer user base of our Eros Now business – through
increased marketing, technology advancements, innovative windowing
and most importantly through best-in-class, compelling Digital
content. The recent Microsoft announcement is a key part of this
strategy – we will be working with one of the world’s largest and
most cutting-edge technology companies to develop a digital
platform that will deliver an unparalleled user experience. In
parallel with the B2C focus, we will be scaling back on non-digital
windowing in many overseas markets in order to help drive consumers
to our Eros Now platform. Our goal has always been for Eros Now to
be the ultimate destination for consumers looking for high-quality
Indian entertainment anywhere in the world – this will help us get
there.
We are on the cusp of completing our transformation from the
Film Studio model into a Digital-led OTT business with traditional
Studio offerings and capabilities. While this will have an impact
on near-term revenues, principally to our syndication business in
the overseas markets, this will increase the premium nature of our
content and ultimately increase ARPUs and loyalty of our customers.
For the full fiscal year 2020, we are forecasting consolidated
revenue in the range of $200 million-220 million, Adjusted EBITDA
of $80 million – 95 million and net debt in the range of $100
million – 110 million.
We have also made some management changes which we believe
demonstrate the depths of our management talent pool and also put
us in a stronger position to execute on our long-term plan.
Firstly, Kumar Ahuja will become the Chief Operating Officer of our
Indian subsidiary, Eros International Media Limited, effective
immediately, and will report directly to the Chairman and Chief
Executive Officer. Mr. Ahuja has been with Eros for over 20 years
and has most recently been head of Business Development for New
Initiatives. Mr. Ahuja has been instrumental in negotiating and
securing our China distribution partnerships and this will remain a
key focus area for him.
Rishika Lulla Singh will become Chairman of Eros Digital while
continuing to oversee all digital activities of the group with a
focus on long-term strategy and deepening our relationships with
technology and content partners around the world. Ali Hussein will
become CEO of Eros Now. Mr. Hussein has been with Eros since 2017
and has been driving technology and distribution growth worldwide.
His previous experiences with media and tech companies adjacent to
our business, including Google, Viacom 18 and Discovery board
advisory as well as growing multiple startups in the ecosystem will
help him lead the Eros Now business. These management changes
underscore the strength of our broader management team, which has
deep experience in digital media, advertising, finance and
accounting.
As announced on June 19, 2019, Eros is currently assessing
strategic alternatives for the Company with a view to maximizing
shareholder value and have engaged Citigroup to assist with that
review. The process is ongoing and the Company will update the
market accordingly, as and when there are any material
developments.
Eros’ balance sheet remains conservative and the Company is
well-capitalized, with net debt of $140.1 million and $80.8 million
of cash and cash equivalents. The Company has no meaningful
near-term debt maturities payable in cash over the next twelve
months. We recently completed a $25 million equity-linked financing
which gives us increased balance sheet flexibility and incremental
capital to go after the digital opportunity in India and continue
to create and acquire more compelling digital content.”
Results Overview
Eros Now reached 21.1 million paid subscribers as of June 30,
2019, which represents growth of 108.9% year-over-year, and
registered users grew to approximately 166 million, a 46.9%
increase versus the prior year period. Eros Now’s registered user
base of approximately 166 million grew by 11.34 million users in
the last quarter alone.
Eros Now is currently prioritizing developments on its the
technology stack, with several innovations and global “firsts” to
be launched later this year. The business is tailoring its
technology to serve both English speaking audiences around the
world and regional Indian languages to appeal to both the diaspora
and growing regional populations in India. Eros Now announced a
number of alliances and distribution partnerships recently, most
notably with Apple +, Paytm, Vodafone Qatar, Veriown, Tata Sky
Binge and WASU Media in China. This quarter Eros Now increased its
focus on digital marketing, in India and globally, which helped
grow our user base and engagement – the platform saw a fourfold
increase in app installations in May as compared to June 2019.
Eros Now user metrics continue to show a positive trend in
engagement, stickiness and loyalty among consumers. A few key
highlights:
- Over 18% of our paid subscribers are accessing Eros Now through
TV or Smart TV applications, in the US this figure is over 24%
- As per the Counter Point Research Report Released in June 2019
- Eros Now is the most popular OTT Brand in the M/F Segment of
25-24
- 68% of Eros Now users Indicate they watch content daily
compared to 58% as the average for other incumbent services
- Eros Now is the most popular VOD service across rural Tier 2,3
cities in India with over 50% market share
Content &
Programming
Our major Eros Now original series this quarter was a biopic on
Narendra Modi, the Indian Prime Minister – Modi – The Journey of a
Common Man – which was released in 4 regional languages (Gujarati,
Tamil, Telugu, Kannada) to cater to regional audiences. The series
was also released in Hindi. The series garnered strong viewership
in Gujarat, Tamil Nadu, Andhra Pradesh among others. Ahmedabad, a
rural city in India, had the largest viewership of any city in
India for the Modi series.
In June we released an Eros Now Quickie ‘My name is Sheela,’ a
story of a domestic worker who overcomes many hurdles in life to
become a social media star. It is a slice of life story that is
full of irreverent dialogues and funny performances by Sheela as a
standup comedian. In June we also celebrated Short Films with the
launch of three Eros Now Original Short Films: ‘A Monsoon Date’ –
about an eventful, rainy evening when a young woman is on her way
to see a young man she is dating; ‘That Man in the picture’ - guilt
weighs heavy on a man after he witnesses a murder of a young girl;
and ‘Maunn’ – about rift between two families when a shocking
revelation compels a couple to face a truth but are unable to
confront the perpetrator. All the short films have been very well
received among the respective audiences and have registered some of
the highest engagement we’ve received to date. Our short films have
also received accolades and awards at leading film festivals. Maunn
was the Winner of the Asia Pacific Film Festival in Los Angeles,
and was nominated at the Vancouver International Film Festival
amongst others. ‘The Monsoon Date’ was also the Official Selection
at the 20th MAMI Mumbai Film Festival. This quarter we continued
our strategy of weekly movie premieres and launching new short form
assets on the platform, and delivered a very strong and diverse
portfolio of content and programming across the platform.
Marketing and Promotion
The beginning of this quarter saw the launch of a 360 degree
campaign for Modi across 24 markets in India. It was one of our
largest and most extensive marketing campaigns for an Original
Series on Eros Now. It was also the first time in the last year
that we targeted a mainstream advertising campaign beyond the
larger Indian cities and went into “mini-Metros” such as
Chandigarh, Ahmedabad and others. Our marketing efforts were
successful, with the Modi campaign ultimately generating over 100
million impressions across TV, print, online and all other
platforms in India and globally. Eros Now expanded its financial
sector marketing and promotion partnerships with launch of partners
such as Axis Bank, American Express, Paytm and others. In
particular, Paytm First was big win for Eros Now, which is one of
only two Video OTT brands to partner with of Paytm.
Release Slate
As we progress through Fiscal Year 2020, we have a strong film
slate, which includes ‘Kaptan’ starring Saif Ali Khan, the
trilingual remake of ‘Haathi mere Saathi’ and ‘Kaamiyab’as well as
a host of regional releases. In addition, Eros has a series of
originals coming up on Eros Now that it expects to release in the
coming quarters, including:
- Flesh by Siddharth Anand (target release Q2 FY20)
- Brahmm by Gaurav Sharma (target release Q2 FY20)
- Halahal, a digital film, by Zeishan Qadri (target
release Q3 FY20)
- Avatar: The Legend of Vishnu by Anirudh Pathak and Sree
Narayan Singh (target release Q4 FY20)
- Metro Park 2 by Abi Varghese and Ajayan Venugopalan
(target release Q4 FY20)
- Crisis by Gaurav Chawla and Nikhil Advani (target
release Q4 FY20)
- Ponnyein Selvin (target release FY Y21)
- Smoke 2 by Neel Guha (target release FY Y21)
- Bhumi by Pavan Kripalani (target release FY Y21)
Eros International Plc Financial Highlights:
Three Months Ended June
30
(dollars in millions)
2019
2018
% change
Revenue
$
43.5
$
60.2
(27.7)%
Gross profit
27.0
23.6
14.4%
Operating profit
1.0
10.4
(90.4)%
Adjusted EBITDA(1)
$
18.6
$
27.5
(32.4)%
(1)
A reconciliation of the non-GAAP financial
measures discussed within this release to the Company’s IFRS
revenue and net income is included at the end of this release. See
also “Non-GAAP Financial Measures”.
Financial Results for the Three Months Ended June 30,
2019
Revenue
In the three months ended June 30, 2019, the Eros film slate
comprised of 12 low budget films, as compared to 14 films in the
three months ended June 30, 2018, of which one was medium budget
and 13 were low budget films. In addition, Eros Now released five
original series titled Modi: Journey of a Common Man, My name is
Sheela, A Monsoon Date, That Man In The Picture and Maunn during
the three months ended June 30, 2019.
In the three months ended June 30, 2019, the Company’s slate of
12 films comprised of one Hindi film and 11 regional films as
compared to the same period last year where its slate of 14 films
comprised three Hindi films, two Tamil films and nine regional
language films.
Three months ended
High
Medium
Low
Total
June 30, 2019
-
-
12
12
June 30, 2018
-
1
13
14
For the three months ended June 30, 2019, reported revenue was
$43.5 million compared to $60.2 million for the three months ended
June 30, 2018. After making adjustment towards significant
financing component under IFRS 15 as per details hereunder, gross
revenue for the three months ended June 30, 2019 is $43.5 million
compared to $66.6 million for the three months ended June 30, 2018.
There was no adjustment towards significant financing component
under IFRS 15 in the three months ended June 30, 2019 because there
was no revenue accounted with credit period more than 365 days.
Three months ended June
30,
2019
2018
(dollars in millions)
Revenue (GAAP)
$
43.5
$
60.2
Adjustment towards significant financing
component under IFRS 15
-
6.4
Gross Revenue (Non-GAAP)
$
43.5
$
66.6
For the three months ended June 30, 2019, aggregate revenues
from decreased by 27.7% to $43.5 million from $60.2 million for the
three months ended June 30, 2018 mainly due to lower syndication
revenue for the three months ended June 30, 2019, partially offset
by increase in revenues largely from the Eros Now business for the
three months ended June 30, 2018
Cost of sales
For the three months ended June 30, 2019, cost of sales
decreased by 54.9% to $16.5 million compared to $36.6 million in
the three months ended June 30, 2018. The decrease was mainly due
to lower amortization costs.
Administrative cost
For the three months ended June 30, 2019, administrative cost
increased by 97% to $26.0 million compared to $13.2 million in the
three months ended June 30, 2018. The increase was mainly due to
increase in expected credit loss accounted as per default method
under IFRS 9.
Gross profit
For the three months ended June 30, 2019, gross profit increased
by 14.4% to $27.0 million, compared to $23.6 million in the three
months ended June 30, 2018. The increase was mainly due to a
decrease in amortization, marketing, advertising and distribution
costs, which was partially offset by an increase in administrative
cost.
Adjusted EBITDA (Non- GAAP)
For the three months ended June 30, 2019, Adjusted EBITDA was
$18.6 million compared to $27.5 million in the three months ended
June 30, 2018. The Adjusted EBITDA margin based on Gross Revenue
was 42.8% in the three months ended June 30, 2019 compared to 41.3%
in the three months ended June 30, 2018. The improvement in margins
was largely due to an decrease in amortization charge over the same
period.
Net finance costs
For the three months ended June 30, 2019, net finance costs
decreased by 8.7% to $2.1 million, compared to $2.3 million in the
three months ended June 30, 2018 mainly due to an increase in
finance cost which was partially offsetted by interest income on
account of unwinding of credit impairment loss.
Income tax expense
For the three months ended June 30, 2019, income tax expenses
decreased by 37.9% to $1.8 million, compared to $2.9 million in the
three months ended June 30, 2018. Effective income tax rates were
32.8% and 15.0% for June 30, 2019 and June 30, 2018, respectively
excluding non-deductible share-based payment charges, impairment
loss and gain/loss on fair valuation of derivative liabilities. The
change in effective rate principally reflects a change in the mix
of the profits earned from taxable and non- taxable
jurisdictions.
Trade receivables
As of June 30, 2019, Trade Receivables increased to $200.3
million from $196.4 million as of March 31, 2019. The increase in
receivables is on account of unwinding of expected credit loss
(included in finance income) as per IFRS 15 amounting to $2.9
million in the three months ended June 30, 2019.
Net debt
As of June 30, 2019, net debt decreased by 3.4% to $140.1
million from $145.0 million as of March 31, 2019 primarily on
account of repayment of loans.
Conference Call
The Company will host a conference call on Tuesday October 8th,
2019, at 8:30 AM Eastern Standard Time.
To access the call please dial (888) 753-4238 from the United
States, or +1 (706) 643-3355 from outside the U.S. The conference
call I.D. number is 2697233. Participants should dial in 5 to 10
minutes before the scheduled time.
A replay of the call can be accessed through October 22, 2019 by
dialling (800) 585-8367 from the U.S., or +1 (404) 537-3406 from
outside the U.S. The conference call I.D. number is 2697233. The
call will be available as a live webcast, which can be accessed at
Eros’ Investor Relations website.
About Eros International
Plc
Eros International Plc (NYSE: EROS) is a leading global company
in the Indian film entertainment industry that acquires,
co-produces and distributes Indian films across all available
formats such as cinema, television and digital new media. Eros
International Plc was the first Indian media company to list on the
New York Stock Exchange. Eros International has experience of over
three decades in establishing a global platform for Indian cinema.
The Company has an extensive and growing movie library comprising
of over 3,000 films, which include Hindi, Tamil, and other regional
language films. The Company also owns the rapidly growing OTT
platform Eros Now which has rights to over 12,000 films across
Hindi and regional languages. For further information, please
visit: www.erosplc.com.
This release contains “forward-looking statements.” These
statements include, among other things, the discussions of our
business strategy and expectations concerning our market position,
future operations, margins, profitability, liquidity and capital
resources, tax assessment orders and future capital expenditures.
All of our forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially
from those that we are expecting, including, without limitation,
the factors discussed in our most recent Form 20-F filed with the
U.S. Securities and Exchange Commission on August 14th, 2019 (the
“20-F”), including under the sections captioned “Risk Factors.” The
forward-looking statements contained in this presentation are based
on historical performance and management’s current plans, estimates
and expectations in light of information currently available to us
and are subject to uncertainty and changes in circumstances. There
can be no assurance that future developments affecting us will be
those that we have anticipated. Actual results may differ
materially from these expectations due to changes in global,
regional or local political, economic, business, competitive,
market, regulatory and other factors, many of which are beyond our
control, as well as the other factors described in the 20-F under
the sections captioned “Risk Factors.”
EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Amounts in thousands, except share and per share data)
As at
Note
June 30, 2019
March 31, 2019
(in thousands)
ASSETS
Non-current assets
Property and equipment
$
10,439
$
10,921
Right of use assets
1,868
—
Intangible assets — content
5
720,821
706,572
Intangible assets — others
3,612
3,794
Investments
2,650
2,650
Trade and other receivables — amortised
cost
1
9,090
10,065
Income tax receivable
1,234
1,284
Restricted deposits
766
756
Deferred income tax assets
1,263
1,263
Total non-current assets
$
751,743
$
737,305
Current assets
Inventories
$
—
$
435
Trade and other receivables — fair
value
1
129,929
125,229
Trade and other receivables — amortised
cost
1
78,721
79,916
Investments
233
1,042
Cash and cash equivalents
80,789
89,117
Restricted deposits
9,201
55,858
Total current assets
298,873
351,597
Total assets
$
1,050,616
$
1,088,902
LIABILITIES
Current liabilities
Trade and other payables
$
84,085
$
83,487
Acceptances
3
3,046
8,366
Short-term borrowings — fair value
2
53,401
68,349
Short-term borrowings — amortised cost
2
98,852
140,559
Derivative financial instruments
—
620
Lease Liabilities
837
—
Current income tax payable
22,463
17,291
Total current liabilities
$
262,684
$
318,672
Non-current liabilities
Long-term borrowings — amortised cost
2
68,600
71,920
Lease Liabilities
1,008
—
Other long - term liabilities
15,969
13,898
Deferred income tax liabilities
23,433
27,427
Total non-current liabilities
$
109,010
$
113,245
Total liabilities
$
371,694
$
431,917
EQUITY
Share capital
4
$
40,924
$
39,326
Share premium
591,250
580,013
Reserves
6,763
(2,202)
Other components of equity
(79,017)
(79,696
)
JSOP reserve
(15,985
)
(15,985
)
Equity attributable to equity holders
of Eros International Plc
$
543,935
$
521,456
Non-controlling interest
134,987
135,529
Total equity
$
678,922
$
656,985
Total liabilities and shareholder’s
equity
$
1,050,616
$
1,088,902
EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Amounts in
thousands, except share and per share data)
Three Months Ended June
30,
Note
2019
2018
Revenue
$
43,511
$
60,212
Cost of sales
(16,544)
(36,571
)
Gross profit
26,967
23,641
Administrative cost
(25,970)
(13,219
)
Operating profit
997
10,422
Finance costs
(6,012)
(4,927
)
Finance income
3,865
2,579
Net finance costs
(2,147)
(2,348
)
Other gains/(losses)
8
8,051
(14,685
)
Profit/(Loss) before tax
6,901
(6,611
)
Income tax
(1,834)
(2,879
)
Profit/(loss) for the period
$
5,067
$
(9,490)
Attributable to:
Equity holders of Eros International
Plc
$
6,112
$
(13,591
)
Non-controlling interest
(1,045)
4,101
Earnings/(loss) per
share(cents)
Basic earnings/(loss) per share
7
8.1
(20.2
)
Diluted earnings/(loss) per share
7
2.8
(20.2
)
EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME/(LOSS) (Amounts in thousands, except share and per share
data)
Three Months Ended June
30,
2019
2018
Profit/(loss) for the period
$
5,067
$
(9,490
)
Other comprehensive Income:
Items that will be subsequently
reclassified to profit or loss
Exchange differences on translating
foreign operations
1,135
(11,147
)
Total other comprehensive income/(loss)
for the period
$
1,135
$
(11,147
)
Total comprehensive income/(loss) for
the period, net of tax
$
6,202
$
(20,637
)
Attributable to:
Equity holders of Eros International
Plc
$
6,791
$
(20,241
)
Non-controlling interest
(589)
(396
)
The accompanying notes are an integral part of
these unaudited condensed consolidated financial statements.
EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts
in thousands, except share and per share data)
Three Months Ended June
30,
Note
2019
2018
Cash flows from operating
activities:
Profit/(Loss) before tax
$
6,901
$
(6,611)
Depreciation and amortization
12,492
29,214
Non-cash charges
7,935
25,108
Changes in operating assets and
liabilities and non-cash charges
(17,083)
(32,588)
Net cash generated from operating
activities
$
10,245
$
15,123
Cash flows from investing
activities:
Purchase of intangible film and content
rights
(17,426)
(15,429)
Other investing activities, net
48,552
(949)
Net cash (used in) investing
activities
$
31,126
$
(16,378
)
Cash flows from financing
activities:
Net cash generated from financing
activities
$
(49,481)
$
59
Net increase/(decrease) in cash and
cash equivalents
(8,110)
(1,196
)
Effect of exchange rate changes on cash
and cash equivalents
(218)
(512
)
Cash and cash equivalents at beginning of
period
89,117
87,762
Cash and cash equivalents at the end of
period
$
80,789
$
86,054
The accompanying notes are an integral part of
these unaudited condensed consolidated financial statements
EROS INTERNATIONAL PLC NOTES TO UNAUDITED
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Amounts in
thousands, except share and per share data)
1. TRADE AND OTHER RECEIVABLES
As at
June 30, 2019
March 31, 2019
Trade accounts receivables (net of
credit impairment loss)
Trade accounts receivables at fair
value
$
129,929
125,229
Trade accounts receivables at amortised
cost
70,399
71,129
Total Trade accounts
receivables
$
200,328
$
196,358
Other receivables at amortised cost
17,412
18,852
Total Trade and other
receivables
217,740
215,210
Current
208,650
205,145
Non-current
9,090
10,065
$
217,740
$
215,210
The age of account receivables net of credit of credit
impairment loss are past due but not impaired were as follows:
As at
June 30, 2019
March 31, 2019
Not more than three months
$
46,633
$
44,687
More than three months but not more than
six months
35,467
15,948
More than six months but not more than one
year
22,636
15,310
More than one year
7,126
8,796
$
111,862
$
84,741
The movement in the allowances for expected credit losses is as
follows:
Year ended
June 30, 2019
Trade Receivables
Other Receivables
Total Receivables
Balance as on April 1, 2019
$
41,335
$
447
$
41,782
Charged to operations
13,005
—
13,005
Unwinding of expected credit loss
(included in finance income)
(2,885
)
—
(2,885
)
Reversal of expected credit loss (included
in other gains/(losses))
(1,287
)
—
(1,287
)
Translation adjustment
(124)
—
(124)
Bad debts
(2,201)
—
(2,201)
Balance as at June 30, 2019
$
47,843
$
447
$
48,290
Year ended
March 31, 2019
Trade Receivables
Other Receivables
Total Receivables
Balance on April 1, 2018
$
10,193
$
—
$
10,193
Impact of adoption of IFRS 9
18,050
447
18,497
Balance as on April 1, 2018
28,243
447
28,690
Charged to operations
60,208
7,284
67,492
Unwinding of expected credit loss
(included in finance income)
(13,227
)
—
(13,227
)
Reversal of expected credit loss (included
in other gains/(losses))
(20,698
)
—
(20,698
)
Translation adjustment
(160
)
—
(160
)
Bad debts
(13,031
)
(7,284
)
(20,315
)
Balance at the March 31, 2019
$
41,335
$
447
$
41,782
2. BORROWINGS
An analysis of long-term borrowings is shown in the table
below.
Nominal
As at
Interest Rate
Maturity
June 30, 2019
March 31, 2019
(in thousands)
Asset backed borrowings
Vehicle loan
2.5 - 9.5%
2017-22
$
243
$
382
Term loan
MCLR +3.2% - 4.50%
2019-22
12,199
12,947
Term loan
BR + 2.75%
2020-21
943
1,083
Term loan
10.39% - 13.75%
2020-23
—
251
$
13,385
$
14,663
Unsecured borrowings
Retail bond
6.50%
2021-22
63,500
65,215
Convertible notes
14.23%
2020-21
53,401
68,349
$
116,901
$
133,564
Cumulative effect of unamortised costs
(606)
(691
)
Instalment due within one year:
Convertible notes
(53,401)
(68,349
)
Others
(7,679)
(7,267
)
$
68,600
$
71,920
Long-term borrowings at fair
value
$
—
$
—
Long-term borrowings at amortised
cost
$
68,600
$
71,920
Analysis of short-term borrowings
Nominal
As at
interest rate (%)
June 30, 2019
March 31, 2019
(in thousands)
Asset backed borrowings
Export credit, bill discounting and
overdraft
MCLR +.40% to 4.60%
$
42,096
$
32,078
Export credit, bill discounting and
overdraft
Base Rate + 0.5% to 1%
27,189
3,533
Export credit, bill discounting and
overdraft
6.01% - 15.25%
3,586
26,719
Short term loan
3.25% - 15.75%
18,301
70,962
$
91,172
$
133,292
Unsecured borrowings
Instalments due within one year on
long-term borrowing
61,081
75,616
$
152,253
$
208,908
Short-term borrowings at fair
value
53,401
68,349
Short-term borrowings at amortised
cost
$
98,852
$
140,559
Bank prime lending rate and marginal cost lending rate (“BPLR”
& “MCLR”) is the Indian equivalent to LIBOR. Asset backed
borrowings are secured by fixed and floating charges over certain
Group assets.
Reconciliation of fair value measurement of Convertible
Notes
June 30, 2019
Particulars
(in thousands)
As at March 31,2019
$
68,349
Interest
2,094
‘A’ ordinary shares issued in lieu of
convertible notes
(12,057)
Gain on fair value of convertible
notes
(4,985)
As at June 30,2019
$
53,401
3. ACCEPTANCES
June, 30
March, 31
2019
2019
(in thousands)
Payable under the film financing
arrangements
$
3,046
$
8,366
$
3,046
$
8,366
Acceptances comprise of short – term credit availed from
financial institutions for payment to film producers for film
co-production arrangement entered by the group. The carrying value
of acceptances are considered a reasonable approximation of fair
value
4. ISSUED SHARE CAPITAL
Number of Shares
GBP
Authorized
(in thousands)
Ordinary shares of 30p each at March 31,
2019
150,000,000
45,000
Ordinary shares of 30p each at June 30,
2019 (*)
150,000,000
45,000
(*) The Company increased authorized number of shares to
200,000,000 on September 25, 2019.
Number of Shares
USD
Allotted, called up and fully
paid
A Ordinary 30p
Shares(*)
B Ordinary 30p
Shares(*)
(in thousands)
As at March 31, 2018
55,718,423
9,712,715
$
35,334
Issue of shares in the quarter ended June
30, 2018
2,747,645
—
1,138
Issue of shares in the quarter ended
September 30, 2018
3,773,385
—
1,471
Issue of shares in the quarter ended
December 31, 2018
1,659,767
—
641
Transfer of B Ordinary to A Ordinary
share
1,500,000
(1,500,000
)
—
Issue of shares in the quarter ended March
31, 2019
1,892,518
—
742
As at March 31, 2019
67,291,738
8,212,715
$
39,326
Issue of shares in the quarter ended June
30, 2019
4,192,459
—
1,598
71,484,197
8,212,715
40,924
(*) Each A ordinary shares is entitled to one vote on all
matters and each B shares is entitled to ten votes.
The Company issued A Ordinary shares as follows:
Number of Shares
As at
June 30,2019
March 31, 2019
Issuance to Founders Group(1)
—
1,769,911
Issuance towards settlement of Convertible
notes(2)
3,975,792
4,411,359
Exercise against Restricted Share Unit/
Management scheme (3)
216,667
770,541
Issuance towards Reliance Industries
Limited (4)
—
3,111,088
2015 Share Plan (5)
—
10,416
Total
4,192,459
10,073,315
(1) Average exercise price of NIL (March 2019: $14.69)
(2) Average exercise price of $3.03 (March 2019: $11.28)
(3) 216,667 shares exercised at $NIL (March 2019: 183,000)
exercised price at $NIL (March 2019: $0.39)
(4) Average exercise price of $NIL (March 2019: $15)
(5) Average exercise price of $NIL (March 2019: $7.92)
5. INTANGIBLE ASSETS – CONTENT
Gross Content Assets
Accumulated
Amortization
Impairment Loss
Content Assets
As at June 30, 2019
Film and content rights
$
1,689,687
$
(969,037
)
$
(366,703
)
$
353,947
Content advances
391,317
—
(38,832)
352,485
Film productions
14,389
—
—
14,389
Non-current content assets
$
2,095,393
$
(969,037
)
$
(405,535
)
$
720,821
As at March 31, 2019
Film and content rights
$
1,675,406
$
(954,628
)
$
(366,703
)
$
354,075
Content advances
378,268
—
(38,832
)
339,436
Film productions
13,061
—
—
13,061
Non-current content assets
$
2,066,735
$
(954,628
)
$
(405,535
)
$
706,572
6. SHARE BASED COMPENSATION PLANS
The compensation cost recognized with respect to all outstanding
plans and by grant of shares, which are all equity settled
instruments, is as follows:
Three months ended June
30,
(in thousands)
2019
2018
IPO India Plan
$
123
$
428
2014 Share Plan
—
47
2015 Share Plan
95
7
Other share option awards(**)
665
1,461
Management scheme (staff share grant)
2,783
2,487
$
3,666
$
4,430
(**) includes Restricted Share Unit (RSU) and Other share option
plans
EROS INTERNATIONAL PLC NOTES
TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
7. EARNINGS PER SHARE (EPS)
Three months ended June
30,
(in thousands, except number
of shares and earnings per share)
2019
2018
Basic
Diluted
Basic
Diluted
Earnings/(loss) attributable to the
equity holders of the parent
6,112
6,112
(13,591)
(13,591)
Potential dilutive effect related to
Senior convertible notes
$
—
(2,891)
$
—
—
Potential dilutive effect related to share
based compensation scheme in subsidiary undertaking
—
7
—
(115)
Adjusted earnings attributable to
equity holders of the parent
$
6,112
3,228
$
(13,591)
(13,706)
Weighted average number of shares
75,693,502
75,693,502
67,362,810
67,362,810
Potential dilutive effect of Senior
convertible notes
—
39,469,344
—
—
Potential dilutive effect related to share
based compensation scheme
—
1,801,456
—
75,383
Adjusted weighted average number of
shares
75,693,502
116,964,302
67,362,810
67,438,193
Earnings/(loss) per share
Earnings/(loss) attributable to the
equity holders of the parent per share (cents)
8.1
2.8
(20.2)
(20.2)
The above table does not split the earnings per share separately
for the ‘A’ ordinary 30p shares and the ‘B’ ordinary 30p shares as
there is no variation in their entitlement to participate in
undistributed earnings.
EROS INTERNATIONAL PLC NOTES
TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
8. OTHER GAINS/(LOSSES)
Three months ended June
30,
(in thousands)
2019
2018
Foreign exchange gain/(loss), net
$
1,796
$
3,361
Gain/(loss) on sale of property and
equipment
(4)
—
(Loss) on de-recognition of financial
assets measured at amortized cost net (*)
(270)
(1,304)
Loss of available- for – sale measured at
fair value through profit and loss
(809)
—
Gains/(Loss) on financial liability
(convertible notes) measured at fair value through profit and loss
account
4,985
(21,323)
Reversal of expected credit loss
1,287
4,581
Fair value of receivables
306
—
Credit from Government of India
760
—
$
8,051
$
(14,685)
(*) Arising on assignment and novation of trade receivables and
trade payables with no-recourse. Derecognition of aforesaid
financial assets/liabilities measured at amortized cost is to
mitigate both credit risk and liquidity risk
9. IFRS – 16 LEASES
Effective April 1, 2019, the Company adopted IFRS 16– Leases,
which specifies how to recognize, measure, present and disclose
leases. The standard provides a single accounting model, requiring
the recognition of assets and liabilities for all major leases
previously classified as “operational leases”. The company applied
Modified Retrospective Approach on the date of initial
application.
The Company recognizes a right-of-use asset and a lease
liability at the lease commencement date. The right-of-use asset is
initially measured at cost, based on the initial amount of the
lease liability. The assets are depreciated to the earlier of the
end of the useful life of the right-of-use asset or the lease term
using the straight-line method as this most closely reflects the
expected pattern of consumption of the future economic benefits.
The lease term includes periods covered by an option to extend if
the Company is reasonably certain to exercise that option. In
addition, the right-of-use asset is periodically adjusted for
certain re-measurements of the lease liability. There is no impact
on transition in opening balance of retained earnings as at April
1, 2019.
The weighted average incremental borrowing rate of 12% (for
India) and 7.45% (for other locations) has been applied to lease
liabilities recognized in the statement of financial position at
the date of initial application.
The Company has decided to use the approach that allows the
right-of-use asset to be recognized at an amount equal to the
liability as at the date of initial application. Based on such
approach the Right to Use Asset and Lease Liability as of April 1,
2019, have been created at $ 1,907 and $ 1,907, respectively.
Further, interest expense on Lease Liabilities amounted to $ 40
during the three months ended June 30, 2019. Depreciation on Right
to Use amounted to $ 281 for the three months ended June, 30
2019.
Impact of IFRS 16 on Finance Lease
April 1, 2019, Equipment amounting of $ 243 has been
reclassified to ROU from property and Equipment. As at April 1,
2019, amount of $ $153 pertaining to term Borrowings and amount of
$ 98 pertaining to Short Term Borrowings have been reclassified to
Lease Liabilities in relation to Finance Lease. The Company has
continued to discount the lease rental amount at Interest Rate
Implicit in the lease agreements.
Non-GAAP Financial Measures
Net Income
The Company uses the term Net Income, as the International
Financial Reporting Standards (“IFRS”) define the term as
synonymous with profit for the period.
Reconciliation of Gross Revenue (Non-GAAP)
In addition to the results prepared in accordance with IFRS, the
Company has presented Gross Revenue. The Company uses Gross Revenue
along with other IFRSs measures to evaluate operating performance.
Gross Revenue is defined as reported revenue adjusted in respect of
significant financing component that arises on account of normal
credit terms provided to catalogue customers.
Reconciliation of Adjusted EBITDA
In addition to the results prepared in accordance with IFRS, the
Company has presented Adjusted EBITDA. The Company uses Adjusted
EBITDA along with other IFRSs measures to evaluate operating
performance. Adjusted EBITDA is defined as EBITDA adjusted for
(gains)/impairments of available-for-sale financial assets,
profit/loss on held for trading liabilities (including profit/loss
on derivatives), transactions costs relating to equity
transactions, share based payments, loss/(gain) on sale of property
and equipment, Loss on de-recognition of financial assets measured
at amortized cost, net, credit impairment loss, net, adjustment
towards arisen significant discounting, component loss on financial
liability (convertible notes) measured at fair value through profit
and loss, Loss on deconsolidation of a subsidiary and exceptional
items such as impairment of goodwill, trademark, film & content
rights and content advances.
Adjusted EBITDA, as used and defined by us, may not be
comparable to similarly-titled measures employed by other companies
and is not a measure of performance calculated in accordance with
GAAP. Adjusted EBITDA should not be considered in isolation or as a
substitute for operating income, net income, cash flows from
operating investing and financing activities, or other income or
cash flow statement data prepared in accordance with GAAP. Adjusted
EBITDA provides no information regarding a company’s capital
structure, borrowings, interest costs, capital expenditures and
working capital changes or tax position. However, Eros’ management
team believes that Adjusted EBITDA is useful to an investor in
evaluating the Company’s results of operations because this
measure:
- is widely used by investors to measure a company’s operating
performance without regard to items excluded from the calculation
of such term, which can vary substantially from company to company
depending upon accounting methods and book value of assets, capital
structure and the method by which assets were acquired, among other
factors;
- helps investors to evaluate and compare the results of Eros’
operations from period to period by removing the effect of the
Company’s capital structure from its operating structure.
See the supplemental financial schedules for reconciliations to
IFRSs measures in the table below, which presents a reconciliation
of Eros’ Adjusted EBITDA to net income.
Adjusted EBITDA
Three months ended June
30,
2019
2018
(in thousand)
Profit/(Loss) for the year
$
5067
$
(9,490
)
Income tax expense
1,834
2,879
Net finance costs
2,147
2,348
Depreciation
391
248
Amortization(1)
224
471
EBITDA (Non- GAAP)
9,663
(3,544
)
Share based payment(2)
3,666
4,430
Loss on sale of property and equipment
4
—
Reversal of credit impairment losses
/(gains)
(1,287)
(4,581
)
Loss on de-recognition of financial assets
measured at amortized cost, net
270
1,304
Closure of derivative asset
—
249
Credit impairment losses/(gains)
10,805
1,919
Fair Value of receivables
(306)
—
Loss/(Gain) of available- for – sale
measured at fair value through profit and loss
809
—
Loss/(Gain) on financial liability
(convertible notes) measured at fair value through profit and
loss
(4,985)
21,323
Adjustment arisen from significant
discounting component
—
6,410
Adjusted EBITDA (Non-GAAP)
$
18,639
$
27,510
Amortization of intangible film and
content rights
11,877
28,495
Gross Adjusted EBITDA
$
30,516
$
56,005
(1) Includes only amortization of intangible assets other than
intangible content assets.
(2) Consists of compensation costs recognized with respect to
all outstanding plans and all other equity settled instruments.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191008005513/en/
Mark Carbeck Chief Corporate and Strategy Officer Eros
International PLC mark.carbeck@erosintl.com +44 207 258 9909
Erica Bartsch Sloane & Company 212-446-1875
ebartsch@sloanepr.com
Eros (NYSE:EROS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Eros (NYSE:EROS)
Historical Stock Chart
From Apr 2023 to Apr 2024