Companies

Prolonged lockdown, social distancing norms at multiplexes could impact revenue streams: INOX Leisure

Our Bureau Mumbai | Updated on June 09, 2020

INOX Leisure Ltd on Tuesday said its future revenue streams could be impacted from a prolonged lockdown situation resulting in its inability to reopen multiplexes and to operate these at optimal capacity on account of government-imposed social distancing norms.

The company also referred to retail customers being more prone to the immediate impact of the pandemic, and thereby postponing their discretionary spends due to change in priorities.

“Since all cinema halls are temporarily closed, there is presently no demand for our products/services. We expect there may be pent-up demand for our products/services but we cannot estimate the same,” the company said in a stock exchange filing.

Steps taken

In its disclosure made to the exchanges about the material impact of the Covid-19 pandemic, the company said it has taken steps, including cutting costs across all the functions and departments, engaging with business partners ― developers, distributors, producers, and making representations to State and Central governments for support.

INOX also said that it is planning to utilise its resources better post opening/resumption of operations and has increased liquidity by adding additional lines of funding through short-/long-term debt.

Enough liquidity

According to the disclosure, the company’s management believes that these measures will ensure sufficient liquidity to fund the business operations for at least the next six months. Additional term loans from banks will add to this liquidity, it said..

“As the government has been announcing phased lifting of the lockdown, the management believes that normalcy could be gradually restored during the financial year ending March 31, 2021, and consequently the company will be in a position to resume and continue its operations for the foreseeable future, thereby realising its assets and discharging its liabilities as they fall due for payment in the normal course of business,” it added.

INOX emphasised that these measures have helped significantly reduce its monthly cash burn.

The company also said that it has treasury shares which can be encashed to add more liquidity, if needed.

Published on June 09, 2020

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