Reliance Industries Limited acquires stake in Eros International PLC
Joint partnership with Eros International Media Limited establishes a $150 million fund to co-produce and consolidate content
Eros International Plc EROS ("Eros" or "the Company"), a leading global company in the Indian film entertainment industry, today reported its financial results for the three and nine months ended December 31, 2017.
Key Highlights:
- Reliance Industries Limited ("RIL" or "Reliance") and Eros announced yesterday that RIL, through a subsidiary, has agreed to subscribe to a 5% equity stake in Eros at a price of $15 per share. This represents an 18% premium to the closing price on February 16, 2018. The transaction is subject to customary regulatory and other approvals.
- RIL and Eros International Media Limited ("Eros India") announced that they have agreed to partner in India to jointly produce and consolidate content from across India. The new partnership will equally invest up to $150 million to produce and acquire Indian films and digital originals across all languages.
- Ms. Jyoti Deshpande, Group CEO and MD of Eros, will be stepping down from her Executive role at Eros and move on to head the Media and Entertainment business at RIL as President of the Chairman's Office. Ms. Deshpande will start her role at RIL in April 2018 and will remain as a Non-Executive Director on the Board of Eros. Mr. Kishore Lulla will resume his position of Group Chairman and CEO of Eros.
- Eros Now's paying subscriber base increased 150% y-o-y - triple digit growth from 2 million paying subscribers as of December 31, 2016 to 5 million paying subscribers as of December 31, 2017. Registered users reached over 80 million as of December 31, 2017. Company re-affirms previous guidance of 6-8 million paying subscribers by FYE 2018 and expects to double that base by FYE 2019.
- Eros closed $100 million equity-linked financing in December 2017. The proceeds will be used for general corporate purposes, which will include content acquisitions and increased investment in Eros Now, including serials and originals, as well as refinancing of existing credit facilities as previously announced.
- Eros Now has long term contracts across India's largest telcos including Airtel, Idea and Vodafone. Additionally, Eros Now has renewed its platform integration partnership with Reliance Jio for another term where Eros Now service will be available to approximately 160 million Jio subscribers.
- Having initially concentrated on the India market, Eros Now is increasingly focused on reaching the global South Asian diaspora. With international markets on the radar, global integrations with Roku, LG and Amazon Prime Channels have been launched.
- In adition to Smartron, Eros Now continues to form strategic partnerships worldwide with Smart TV solutions such as Foxxum and Metrological.
- Eros Now has announced an exciting slate of over 15 original series which will be released over the next 18 months, many of which are in the post-production phase. Eros Now also launched its first original short film, ‘Toffee' by Tahira Kashyap. It is a coming of age story that looks at the friendship between two girls from opposite ends of the social spectrum and how they view the life that lies ahead of them.
- Eros' FY16 blockbuster Bajarangi Bhaijan has secured a release in China in more than 8,000 screens in March 2018 during the annual Chinese Lantern Festival. During its first release, Bajarangi Bhaijan has several records in the domestic and international markets including the fastest INR 1 Billion (approximately $15 million) for a Hindi language film, highest single day collection, highest first Monday collection, highest Eid weekend gross overseas and several more.
- Eros Now continues to be focused on building and releasing its original slate with exciting concepts that will entertain global audience.
Financial Highlights:
- Eros has $134.6 million of cash on the balance sheet as of December 31, 2017.
- Consolidated revenue for the three months ended December 31, 2017 was $65.2 million.
- Operating profit for the three months ended December 31, 2017 was $16.5 million.
- Adjusted EBITDA for the three months ended December 31, 2017 was $23.6 million which resulted in a margin of 36.2%.
- Net debt decreased 4.6% to $150.3 million as at December 31, 2017 from $157.6 million as of March 31, 2017.
A reconciliation of the non-GAAP financial measures discussed within this release to our GAAP operating results are included at the end of this release. See also "Non-GAAP Financial Measures."
Management Comments:
Kishore Lulla, Eros' Group Executive Chairman said:
"We are pleased to announce a strategic partnership with Reliance, which we believe will be transformational for us and the Indian entertainment industry. Our new joint venture, combined with Eros' existing library of over 10,000 digital titles, our new originals and our current telco partnerships will not only enhance our competitive advantage and cement our position as owners of the largest premium content offering in India, but will also equip us to be in a unique position as a global digital content company. Jyoti and I look forward to continuing to work together closely in her new role."
Jyoti Deshpande, Eros' Group Chief Executive Officer and Managing Director said:
"The Reliance stake and content JV deal gives Eros incredible fire power to take a lead in content consolidation. The synergies are complementary and I hope this is the beginning of a long and fruitful partnership. I think this will allow Eros to once again scale up the content slate significantly as well as build a competitive advantage for ErosNow. On a bittersweet note, while I will stay on as a non-executive director on the board of Eros I will be going on to head RIL's media and entertainment business as President of the Chairman's office. The last 20 years with Eros have been nothing short of magical and I am glad it's not a goodbye but a continued meaningful association from a win-win perspective."
Prem Parameswaran, Group Chief Financial Officer and President of North America also commented:
"We are proud to deliver a strong performance in the third quarter. The $100 million convertible notes offering in December 2017 has further strengthened our balance sheet and increased our liquidity position. As of December 30, 2017, our net leverage on a trailing basis has reduced to 2.35x, and our net debt now stands at just over $150 million. The investment in the business has already shown positive results in several areas, which is reflected in our Adjusted EBITDA margin of 36% for the quarter.
We continue to invest aggressively in our Eros Now platform, including new originals and increased marketing efforts around our new campaign in India and globally. We feel strongly that our subscriber growth, compelling content library and focus on new originals positions us well to capitalize on the growing demand and opportunity in the OTT space. In this context, I want to reiterate our previously stated guidance of reaching 6-8 million paying subscribers by March 31, 2018, and doubling that base by fiscal year end 2019."
Recent Operational Highlights
- Four films were released in Q3 Fiscal Year 2018, all of which were low budget films as compared to eight films in Q3 Fiscal Year 2017, of which three were medium budget and five were low budget films. This is in line with the Eros strategy of developing its own intellectual property and concentrating on content driven films rather than high budget star driven films.
- Rukh (Hindi), Ribbon (Hindi), Kadvi Hawa (Hindi) and Viswa Vikhyatharaya Payyanmar (Malayalam) were the main revenue contributing films during the quarter.
- Eros has a compelling film slate planned for Fiscal Year 2019, including films such as Haathi Mere Saathi, Kaptan, Manmarziyan, Happy Bhaag Jayegi Returns, ‘Bhavesh Joshi', ‘Chandamama Door Ke', the India-China co-productions, ‘Panda' by Kabir Khan, a Colour Yellow Production films starring Shah Rukh Khan, Tanu Weds Manu 3 and films to be co-produced under its deal with Dhrishyam Films. In addition, Eros looks forward to releasing Tamil, Punjabi, Marathi and Malayalam films during the year.
- As previously reported, as of December 31, 2017, Eros Now has exceeded 80 million registered users and five million paying users worldwide across APP, WAP and Web.
- Eros Now continues to grow above expectations fostered by partnerships with industry leaders to create an ecosystem that is focused on bringing the best in technology and content together on a common platform. Eros Now's new deals include partnerships with Metrological Partner and Foxxum, as well as an integration with Amazon Channels to bring unlimited content to Amazon Prime members in the US and UK. Importantly, its five million paying subscribers as of December 31, 2017 do not include contribution from these deals.
Eros Now Updates
Eros Now continues to partner with industry leaders across local and international markets is focused on making its entertainment service available worldwide.
- Eros Now partnered with Metrological, a cloud-based TV app store and content distribution platform. By joining the Metrological App Store, the wide-ranging library of Bollywood and regional language films, music videos, TV shows, originals and more will now be made available to operators that reach over 40 million homes
- Continuing its global expansion, Eros Now forged a strategic partnership with Foxxum, a leading provider of Smart TV solutions, to provide its vast library of premium content on the Foxxum TV App Store worldwide. Apart from the extensive catalogue of Bollywood and regional language films, music videos, TV shows and original shows will be pre-integrated on Foxxum's Smart TV Store and made available to their millions of users across a wide range of devices worldwide.
- Eros Now is now available to Amazon Prime members on Amazon Channels across the US and UK. Access to Eros Now's entertainment services through the program will include a 7-day free trial.
Eros Now holds rights to more than 10,000 films, of which approximately 5,000 films are owned in perpetuity, and across Hindi and regional languages.
Eros Now is very excited for its slate of originals that are being produced internally in partnership with the best talent. Global concepts that will entertain audiences are being produced internally. A selection of key upcoming titles include:
- Smoke: An unflinching look at the politics within the drug mafia that resides in the intoxicant riddled underbelly of its tropical paradise, Goa. Smoke is lead by an all-star cast including Jim Sarbh, Gulshan Devaiah, Kalki Koechlin, Mandira Bedi, Tom Alter amongst others.
- Blue Oak Academy: a teen-drama thriller that follows one young boy's quest to exact revenge with the most prestigious academic institution of the nation.
- Side Hero with Rohan Sippy: featuring Kunaal Roy Kapur as a fictionalised version of himself – the less successful younger brother of a hotshot Bollywood producer and star – this comedy drama follows Kunaal trying to land a leading role in a bid to prove that his profession of acting is not just a ‘hobby.'
- Toffee by Tahira Kashyap (Short Film): a coming of age story that looks at the firnedship between two girls from opposite ends of the social spectrum and how they look towards the life that lies ahead of them.
- August 25th starring Rajat Kapoor (Short Film): a sci-fi drama that considers the possibility of time travel and the doors that might open up for mankind.
- Flesh with Siddharth Anand: An eight-year-old girl goes missing and her NRI parents are forced to seek the help of a suspended female cop in their search for her. An ex-human trafficker is blackmailed to join the search or else risk his sinful past catching with him.
- Swarajya: On the eve of India's independence, two senior civil servants in Nehru's government find themselves in the center of the storm, having to deal with myriad issues relating to the transfer of power and birth of a new nation.
- Minerva Mills Malady: Following the Minerva Mills Case in the 1970s through the eyes of the petitioners.
- Kurukshetra with Prakash Kovalamadhi: The tribals thought they were Gods. The army thought they were militants. What they turn out to be, are five children with ‘superpowers' emerging from a genetic mutation. And with destinies that, almost uncannily, resemble the trajectory of the Mahabharata.
-
Hacked with Abbas Tyrewala: A young man must team up
with the spirit of a dead hacker that haunts his new laptop to uncover
the truth behind his killing, leading them to a bloody conspiracy of
murdered nuclear scientists.
Eros International Plc Financial Highlights:
Three Months Ended |
Nine Months Ended |
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(dollars in millions) | 2017 | 2016 | % change | 2017 | 2016 | % change | ||||||||||||||||||||||||||
Revenue | $ | 65.2 | $ | 57.3 | 13.8 | $ | 189.3 | $ | 200.3 | (5.5) | ||||||||||||||||||||||
34.7 | 22.3 | |||||||||||||||||||||||||||||||
Gross profit | 55.6 | 88.7 | 68.3 | 29.9 | ||||||||||||||||||||||||||||
Operating profit | 16.5 | 8.2 | 101.2 | 42.7 | 20.9 | 104.3 | ||||||||||||||||||||||||||
Adjusted EBITDA(1) | 23.6 | 14.5 | 62.8 | 54.5 | 46.3 | 17.7 |
(1)Reconciliations of the non-GAAP financial measures discussed within this release to our GAAP operating results are included at the end of this release. See also "Non-GAAP Financial Measures."
- Eros's wholly owned subsidiary - Copsale Ltd has divested its 51% shareholding in Ayngaran International Limited, with effect from October 1, 2017. Consequently, the Ayngaran group consisting of five subsidiaries have not been consolidated in the group financial results with effect from October 1, 2017. The Company has been and will continue to conduct Tamil film distribution business directly. This divestment has no material impact on the group's business operations.
Financial Results for the Three and Nine Months Ended December 31, 2017
Revenue
In the three months ended December 31, 2017, the Eros film slate was comprised of four films which were low budget films as compared to eight films in the three months ended December 31, 2016, of which three were medium budget and five were low budget.
In the three months ended December 31, 2017, the Company's slate of four films comprised of three Hindi film and one regional films as compared to the same period last year where its slate of eight films comprised two Hindi films, three Tamil/Telugu films and three regional films.
In the nine months ended December 31, 2017, the Eros film slate was comprised of 16 films of which one film was high budget, three were medium budget and twelve were low budget films as compared to 40 films in the nine months ended December 31, 2016, of which five were high budget, nine were medium budget and 26 were low budget.
In the nine months ended December 31, 2017, the Company's slate of 16 films comprised of eight Hindi films, one Tamil/Telugu film and seven regional films as compared to the same period last year where its slate of 40 films comprised of twelve Hindi films, sixteen Tamil/Telugu films and twelve regional films.
Three months ended | High | Medium | Low | Total | ||||||||||||||
December 31, 2017 | 0 | 0 | 4 | 4 | ||||||||||||||
December 31, 2016 | 0 | 3 | 5 | 8 |
Nine months ended | High | Medium | Low | Total | ||||||||||||||
December 31, 2017 | 1 | 3 | 12 | 16 | ||||||||||||||
December 31, 2016 | 5 | 9 | 26 | 40 | ||||||||||||||
For the three months ended December 31, 2017, revenue increased by 13.8% to $ 65.2 million, compared to $57.3 million for the three months ended December 31, 2016. In the nine months ended December 31, 2017, revenue decreased by 5.5% to $ 189.3 million, compared to $200.3 million for the nine months ended December 31, 2016.
For the three months ended December 31, 2017, aggregate theatrical revenues decreased by 35.2% to $12.9 million from $19.9 million for the three months ended December 31, 2016, mainly due to a lower number of films, especially high and medium budget Hindi films. In the nine months ended December 31, 2017, revenue decreased by 36.9% to $ 55.9 million, compared to $88.6 million for the nine months ended December 31, 2016. The decrease in theatrical revenue reflects the mix of films released in each period as mentioned above.
For the three months ended December 31, 2017, aggregate revenues from television syndication increased by 45.5% to $ 29.4 million from $20.2 million for the three months ended December 31, 2016, mainly due to increased catalogue revenues. In the nine months ended December 31, 2017, revenue increased by 6.4% to $70.0 million, compared to $65.8 million for the nine months ended December 31, 2016. This was due to increased catalogue sales in nine months ended December 31, 2017.
For the three months ended December 31, 2017, the aggregate revenues from digital and ancillary increased by 33.1 % to $ 22.9 million from $17.2 million for the three months ended December 31, 2016 primarily on account of contribution from Eros Now and catalogue revenues. In the nine months ended December 31, 2017, revenue increased by 38.1 % to $ 63.4 million, compared to $45.9 million for the nine months ended December 31, 2016.
Revenue from India increased by 13.8% to $ 22.3 million in the three months ended December 31, 2017, compared to $19.6 million in the three months ended December 31, 2016 mainly due to lower overall theatrical revenue as offset by stronger catalogue revenue contribution in the quarter ended December 31, 2017. In the nine months ended December 31, 2017, revenue from India decreased by 28.6% to $ 73.0 million, compared to $102.2 million for the nine months ended December 31, 2016. This was due to lower overall theatrical revenue in nine months ended December 31, 2017
Revenue from Europe decreased by 13.6 % to $5.1 million in the three months ended December 31, 2017, compared to $5.9 million in the three months ended December 31, 2016. This was due to lower theatrical revenues associated with fewer films released in the quarter ended December 31, 2017. In the nine months ended December 31, 2017, revenue from Europe increased by 30.5 % to $19.7 million, compared to $15.1 million for the nine months ended December 31, 2016.
Revenue from North America decreased by 83.3% to $ 0.1 million in the three months ended December 31, 2017, compared to $0.6 million in the three months ended December 31, 2016 mainly due to lower theatrical revenues associated with fewer films released in the quarter ended December 31, 2017. In the nine months ended December 31, 2017, revenue from North America decreased by 72.0% to $ 0.7 million, compared to $2.5 million for the nine months ended December 31, 2016.
Revenue from the rest of the world increased by 20.4% to $37.7 million in the three months ended December 31, 2017, compared to $31.3 million in the three months ended December 31, 2016. This was due to higher catalogue sales partially offset by lower theatrical revenues associated with fewer films released in the quarter ended December 31, 2017. In the nine months ended December 31, 2017, revenue from rest of world increased by 19.0% to $ 95.9 million, compared to $80.6 million for the nine months ended December 31, 2016.
Cost of sales
For the three months ended December 31, 2017, cost of sales decreased by 12.9% to $ 30.5 million compared to $35 million in the three months ended December 31, 2016. The decrease was mainly due to lower amortization costs, lower marketing, advertising and distribution costs associated with fewer films released in the quarter ended December 31, 2017. In the nine months ended December 31, 2017, cost of sales decreased by 23.8% to $ 100.6 million, compared to $132 million for the nine months ended December 31, 2016.
Gross profit
For the three months ended December 31, 2017, gross profit increased by 55.6% to $ 34.7 million, compared to $22.3 million in the three months ended December 31, 2016. As a percentage of revenues, the Company's gross profit margin was 53.2% in the three months ended December 31, 2017, compared to 38.9% in the three months ended December 31, 2016. This was mainly due to lower cost of sales linked to film mix and contribution from high margin catalogue revenues. In the nine months ended December 31, 2017, gross profit increased by 29.9 % to $ 88.7 million, compared to $68.3 million for the nine months ended December 31, 2016.
EBIT (Non- GAAP)
For the three months ended December 31, 2017, EBIT decreased by 64.3 % to $ 6.6 million compared to $ 18.5 million in the three months ended December 31, 2016. This was mainly due to lower cost of sales linked to film mix and contribution from high margin catalogue revenues. In the nine months ended December 31, 2017, EBIT decreased by 28% to $ 25 million, compared to $ 34.7 million for the nine months ended December 31, 2016.
Adjusted EBITDA (Non- GAAP)
For the three months ended December 31, 2017, Adjusted EBITDA increased by 62.8 % to $ 23.6 million compared to $14.5 million in the three months ended December 31, 2016 due to increased gross profit margin in the quarter In the nine months ended December 31, 2017, adjusted EBITDA increased by 17.7 % to $ 54.5 million, compared to $46.3 million for the nine months ended December 31, 2016.
Administrative costs
For the three months ended December 31, 2017, administrative costs increased by 28.4 % to $ 18.1 million compared to $14.1 million for the three months ended December 31, 2016 mainly due to increase in share based compensation. In the nine months ended December 31, 2017, administrative costs decreased by 3.2% to $ 46 million, compared to $47.5 million for the nine months ended December 31, 2016.
Net finance costs
For the three months ended December 31, 2017, net finance costs decreased by 35.3% to $ 2.2 million, compared to $3.4 million in the three months ended December 31, 2016 mainly due to repayment of revolving credit facilities loan. In the nine months ended December 31, 2017, net finance costs increased by 16.4 % to $ 12.8 million, compared to $11 million for the nine months ended December 31, 2016.
Income tax expense
For the nine months ended December 31, 2017, income tax expenses decreased by 51 % to $ 5.0 million, compared to $10.2 million in the nine months ended December 31, 2016. Effective income tax rates were 19.3% and 30.2% for December 31, 2017 and December 31, 2016, respectively excluding non-deductible share-based payment charges 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.
Net Income
For the three months ended December 31, 2017, net income decreased by 72.2 % to $ 3.2 million, compared to $ 11.5 million in the three months ended December 31, 2016. For the nine months ended December 31, 2017, net income decreased by 46.7% to 7.2 million, compared to $13.5 million in the nine months ended December 31, 2016.
Trade Receivables
As of December 31, 2017, Trade Receivables decreased to $226.1 million from $226.8 million as of March 31, 2017. The Company collected over $ 34 million of trade receivables post December 31, 2017.
Net Debt
As of December 31, 2017, net debt decreased by 4.6% to $ 150.3 million from $157.6 million as of March 31, 2017.
Conference Call
The Company will host a conference call on Wednesday, February 21, 2018, at 8:30 AM Eastern Standard Time.
To access the call please dial 646-828-8143 or 800-263-0877 from the United States, or +44 (0)330 336 9105 or +44 (0)800 358 6377 from outside the U.S. The conference call I.D. number is 8732366. Participants should dial in 5 to 10 minutes before the scheduled time.
A replay of the call can be accessed through February 28, 2018 by dialing 719-457-0821 or 888-203-1112 from the U.S., or +44 (0) 207 660 0134 or +44 (0) 808 101 1153 from outside the U.S. The conference call I.D. number is 8732366. The call will be available as a live webcast, which can be accessed at Eros' Investor Relations website. A replay of the webcast recording will be available until February 21, 2019.
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.
Adjusted EBITDA
In addition to the results prepared in accordance with IFRS provided in this release, the Company uses Adjusted EBITDA. The company uses Adjusted EBITDA along with other IFRS measures to evaluate operating performance. Adjusted EBITDA is defined by the Company as net income before interest expense, income tax expense and depreciation and amortization (excluding amortization of capitalized film content and debt issuance costs) adjusted for impairments of financial assets and available-for-sale financial assets, profit/loss on held for trading liabilities (including profit/loss on derivatives) share based payments and transaction costs related to equity transactions.
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 movement or tax position. However, our management team believes that Adjusted EBITDA is useful to investors in evaluating our 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;
- help investors to evaluate and compare the results of our operations from period to period by removing the effect of our capital structure from our operating structure; and
- is used by our management team for various other purposes, including presentations to our board of directors, as a basis for strategic planning and forecasting.
See the supplemental financial schedules for a reconciliation of Adjusted EBITDA to Net Income.
Cautionary Statement Concerning Forward-Looking Statements
Some of the information presented in this press release and in related comments by Eros' management contains forward-looking statements. In some cases, these forward-looking statements are identified by terms and phrases such as "aim," ‘‘anticipate,'' ‘‘believe,'' "feel," "contemplate," ‘‘intend,'' ‘‘estimate,'' ‘‘expect,'' ‘‘continue,'' ‘‘should,'' ‘‘could,'' ‘‘may,'' ‘‘plan,'' ‘‘project,'' ‘‘predict,'' ‘‘will,'' "future," "goal," "objective," and similar expressions and include references to assumptions and relate to Eros' future prospects, developments and business strategies. Similarly, statements that describe Eros' strategies, objectives, plans or goals are forward-looking statements and are based on information available to Eros as of the date of this press release. Forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those contemplated by the relevant statement. Such risks and uncertainties include a variety of factors, some of which are beyond Eros' control, including but not limited to market conditions and economic conditions. Information concerning these and other factors that could cause results to differ materially from those contained in the forward-looking statements is contained under the caption "Risk Factors" in Eros' Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission. Eros undertakes no obligation to revise the forward-looking statements included herein to reflect any future events or circumstances, except as required by law. Eros' actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements.
Seasonality
The Groups' financial position and results of operations for any period fluctuate due to film release schedules. Film release schedules take account of holidays and festivals in India and elsewhere, competitor film releases and sporting events.
About Eros International, Plc
Eros International Plc 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 a competitive advantage through its extensive and growing movie library comprising of over 3,000 films, which include Hindi, Tamil, and other regional language films for home entertainment distribution. Eros International has built a dynamic business model by combining the release of new films every year with the exploitation of its film library. The company also owns the rapidly growing OTT platform Eros Now. For further information please visit: www.erosplc.com
EROS INTERNATIONAL PLC UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Amounts in thousands, except share and per share data) |
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Note |
December 31, |
March 31, 2017 |
|||||||||
ASSETS | |||||||||||
Non-current assets | |||||||||||
Property and equipment | $ | 9,845 | $ | 10,354 | |||||||
Goodwill | 4,992 | 4,992 | |||||||||
Intangible assets — trade name | 14,000 | 14,000 | |||||||||
Intangible assets — content | 5 | 908,330 | 904,628 | ||||||||
Intangible assets — others | 5,257 | 4,360 | |||||||||
Available-for-sale financial assets | 29,693 | 29,613 | |||||||||
Trade and other receivables | 1 | 23,639 | 11,443 | ||||||||
Income tax receivable | 1,086 | 1,051 | |||||||||
Restricted deposits | 1,272 | 335 | |||||||||
Deferred income tax assets | 563 | 112 | |||||||||
Total non-current assets | $ | 998,677 | $ | 980,888 | |||||||
Current assets | |||||||||||
Inventories | $ | 126 | $ | 214 | |||||||
Trade and other receivables | 1 | 246,150 | 242,762 | ||||||||
Current income tax receivable | 13 | 253 | |||||||||
Cash and cash equivalents | 134,559 | 112,267 | |||||||||
Restricted deposits | 6,115 | 6,981 | |||||||||
Total current assets | 386,963 | 362,477 | |||||||||
Total assets | $ | 1,385,640 | $ | 1,343,365 | |||||||
LIABILITIES | |||||||||||
Current liabilities | |||||||||||
Trade and other payables | $ | 72,831 | $ | 120,082 | |||||||
Acceptances | 3 | 6,891 | 8,935 | ||||||||
Short-term borrowings | 2 | 133,912 | 180,029 | ||||||||
Current income tax payable | 6,626 | 7,055 | |||||||||
Total current liabilities | $ | 220,260 | $ | 316,101 | |||||||
Non-current liabilities | |||||||||||
Long-term borrowings | 2 | $ | 150,939 | $ | 89,841 | ||||||
Other long-term liabilities | 5,320 | 5,349 | |||||||||
Derivative financial instruments | - | 12,553 | |||||||||
Deferred income tax liabilities | 40,272 | 35,973 | |||||||||
Total non-current liabilities | $ | 196,531 | $ | 143,716 | |||||||
Total liabilities | $ | 416,791 | $ | 459,817 | |||||||
EQUITY | |||||||||||
Share capital | 4 | $ | 32,653 | $ | 31,877 | ||||||
Share premium | 422,798 | 399,686 | |||||||||
Reserves | 449,314 | 436,997 | |||||||||
Other components of equity | (46,460 | ) | (48,118 | ) | |||||||
JSOP reserve | (15,985 | ) | (15,985 | ) | |||||||
Equity attributable to equity holders of Eros International Plc | $ | 842,320 | $ | 804,457 | |||||||
Non-controlling interest | 126,529 | 79,091 | |||||||||
Total equity | $ | 968,849 | $ | 883,548 | |||||||
Total liabilities and shareholder's equity | $ | 1,385,640 | $ | 1,343,365 | |||||||
EROS INTERNATIONAL PLC |
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Three Months Ended December 31, |
Nine Months Ended December 31, |
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Note | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Revenue | 8 | $ | 65,187 | $ | 57,348 | $ | 189,327 | $ | 200,319 | ||||||||||||
Cost of sales | (30,528 | ) | (35,029 | ) | (100,638 | ) | (131,974 | ) | |||||||||||||
Gross profit | 34,659 | 22,319 | 88,689 | 68,345 | |||||||||||||||||
Administrative cost | (18,128 | ) | (14,119 | ) | (46,022 | ) | (47,470 | ) | |||||||||||||
Operating profit | 16,531 | 8,200 | 42,667 | 20,875 | |||||||||||||||||
Financing costs | (2,731 | ) | (4,005 | ) | (14,264 | ) | (12,806 | ) | |||||||||||||
Finance income | 488 | 590 | 1,468 | 1,824 | |||||||||||||||||
Net finance costs | (2,243 | ) | (3,415 | ) | (12,796 | ) | (10,982 | ) | |||||||||||||
Other (losses)/gains | 9 | (9,944 | ) | 10,264 | (17,696 | ) | 13,829 | ||||||||||||||
Profit before tax | 4,344 | 15,049 | 12,175 | 23,722 | |||||||||||||||||
Income tax | (1,143 | ) | (3,565 | ) | (4,960 | ) | (10,194 | ) | |||||||||||||
Profit / (Loss) for the period | $ | 3,201 | $ | 11,484 | $ | 7,215 | $ | 13,528 | |||||||||||||
Attributable to: | |||||||||||||||||||||
Equity holders of Eros International Plc | $ | 301 | $ | 8,184 | $ | (2,957 | ) | $ | 6,484 | ||||||||||||
Non-controlling interest | 2,900 | 3,300 | 10,172 | 7,044 | |||||||||||||||||
Earnings/(loss) per share(cents) | |||||||||||||||||||||
Basic earnings/(loss) per share | 7 | 0.5 | 13.5 | (4.8 | ) | 11.0 | |||||||||||||||
Diluted earnings/(loss) per share | 7 | (8.6 | ) | 12.7 | (14.5 | ) | 9.7 |
EROS INTERNATIONAL PLC |
||||||||||||||||||
Three Months Ended December 31, |
Nine Months Ended December 31, |
|||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Profit / (Loss) for the period | $ | 3,201 | $ | 11,484 | $ | 7,215 | $ | 13,528 | ||||||||||
Other comprehensive loss: | ||||||||||||||||||
Items that will be subsequently reclassified to profit or loss | ||||||||||||||||||
Exchange differences on translating foreign operations | 2,973 | (4,075 | ) | 223 | (2,852 | ) | ||||||||||||
Reclassification of the cash flow hedge to the statement operations, net of tax | 188 | 201 | 375 | 602 | ||||||||||||||
Total other comprehensive income/(loss) for the period | $ | 3,161 | $ | (3,874 | ) | $ | 598 | $ | (2,250 | ) | ||||||||
Total comprehensive income for the period, net of tax | $ | 6,362 | $ | 7,610 | $ | 7,813 | $ | 11,278 | ||||||||||
Attributable to: | ||||||||||||||||||
Equity holders of Eros International Plc | $ | 3,472 | $ | 5,054 | $ | (1,299 | ) | $ | 4,755 | |||||||||
Non-controlling interest | 2,890 | 2,556 | 9,112 | 6,523 | ||||||||||||||
EROS INTERNATIONAL PLC UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands, except share and per share data) |
|||||||||||
Nine Months Ended December 31, |
|||||||||||
Note | 2017 | 2016 | |||||||||
Cash flows from operating activities: | |||||||||||
Profit before tax | $ | 12,175 | $ | 23,722 | |||||||
Adjustments for: | |||||||||||
Depreciation | 838 | 590 | |||||||||
Share based payment | 6 | 13,502 | 18,645 | ||||||||
Amortization of intangible film and content rights | 87,322 | 105,730 | |||||||||
Amortization of other intangibles assets | 1,112 | 1,029 | |||||||||
Other non-cash items | 10 | 14,511 | (12,898 | ) | |||||||
Net finance costs | 12,796 | 10,982 | |||||||||
Gain on sale of available for sale financial asset | — | (58 | ) | ||||||||
Loss on sale of property and equipment | 18 | — | |||||||||
Changes in trade and other receivables | (105,883 | ) | (38,443 | ) | |||||||
Changes in inventories | 210 | 41 | |||||||||
Changes in trade and other payables | 32,300 | 4,195 | |||||||||
Cash generated from operations | 68,901 | 113,535 | |||||||||
Interest paid | (17,160 | ) | (13,744 | ) | |||||||
Income taxes paid | (2,154 | ) | (6,464 | ) | |||||||
Net cash generated from operating activities | $ | 49,587 | $ | 93,327 | |||||||
Cash flows from investing activities: | |||||||||||
Proceeds from sale of available for sale financial assets | — | 288 | |||||||||
Proceeds from sale of share of subsidiaries | 40,221 | — | |||||||||
Purchases of property and equipment | (191 | ) | (629 | ) | |||||||
Proceeds from sale of property and equipment | 46 | — | |||||||||
Proceeds from/(investment in) restricted deposits held with banks | 190 | (4,937 | ) | ||||||||
Purchase of intangible film and content rights | (89,107 | ) | (168,585 | ) | |||||||
Purchase of other intangible assets | (93 | ) | — | ||||||||
Interest received | 2,222 | 2,309 | |||||||||
Net cash used in investing activities | $ | (46,712 | ) | $ | (171,554 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from issue of share capital | 16,600 | 30,452 | |||||||||
Proceeds from issue of shares by subsidiary | 502 | 19 | |||||||||
Proceeds from short-term debt | 31,892 | 66,524 | |||||||||
Proceed from issue out of treasury shares | — | 938 | |||||||||
Repayment of short-term debt with maturity less than three months (net) | (1,036 | ) | (1,685 | ) | |||||||
Repayment of short-term debt | (125,760 | ) | (74,809 | ) | |||||||
Proceeds from long-term borrowings | 110,829 | 16,598 | |||||||||
Repayment of long-term borrowings | (9,126 | ) | (11,225 | ) | |||||||
— | — | ||||||||||
Net cash generated from financing activities | $ | 23,901 | $ | 26,812 | |||||||
Net decrease in cash and cash equivalents | 26,776 | (51,415 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (4,484 | ) | 4,462 | ||||||||
Cash and cash equivalents, beginning of period | 112,267 | 182,774 | |||||||||
Cash and cash equivalents, end of period | $ | 134,559 | $ | 135,821 | |||||||
EROS INTERNATIONAL PLC UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Amounts in thousands, except share and per share data) |
||||||||||||||||||||||||||||||||||||||||||||||||||
Other components of equity | Reserves | |||||||||||||||||||||||||||||||||||||||||||||||||
Share |
Share premium account |
Currency translation reserve |
Available for sale fair value reserves |
Revaluation reserve |
Hedging reserve |
Reverse acquisition reserve |
Merger reserve |
Retained earnings |
JSOP reserve |
Equity Attributable to Shareholders of EROS International PLC |
Non- controlling interest |
Total equity |
||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as at |
$ | 31,877 | $ | 399,686 | $ | (55,810 | ) | $ | 6,238 | $ | 1,829 | $ | (375 | ) | $ | (22,752 | ) | $ | 70,275 | $ | 389,474 | $ | (15,985 | ) | $ | 804,457 | $ | 79,091 | $ | 883,548 | ||||||||||||||||||||
(Loss)/Profit |
— | — | — | — | — | — | — | — | (2,957 | ) | — | (2,957 | ) | 10,172 | 7,215 | |||||||||||||||||||||||||||||||||||
Other |
— | — | 1,303 | — | (20 | ) | 375 | — | — | — | — | 1,658 | (1,060 | ) | 598 | |||||||||||||||||||||||||||||||||||
Total |
— | — | 1,303 | — | (20 | ) | 375 | — | — | (2,957 | ) | — | (1,299 | ) | 9,112 | 7,813 | ||||||||||||||||||||||||||||||||||
Share based |
— | — | — | — | — | — | — | — | 13,014 | — | 13,014 | 488 | 13,502 | |||||||||||||||||||||||||||||||||||||
Shares issued |
208 | 6,934 | — | — | — | — | — | — | (7,142 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Changes in |
568 | 16,178 | — | — | — | — | — | 8,161 | — | — | 24,907 | 32,060 | 56,967 | |||||||||||||||||||||||||||||||||||||
Changes in |
— | — | — | — | — | — | — | 1,241 | — | — | 1,241 | 5,778 | 7,019 | |||||||||||||||||||||||||||||||||||||
Balance as at |
$ | 32,653 | 422,798 | (54,507 | ) | 6,238 | 1,809 | — | (22,752 | ) | 79,677 | 392,389 | (15,985 | ) | 842,320 | 126,529 | 968,849 | |||||||||||||||||||||||||||||||||
EROS INTERNATIONAL PLC UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Amounts in thousands, except share and per share data) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other components of equity | Reserves | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share capital |
Share premium account |
Currency translation reserve |
Available for sale investments |
Revaluation reserve |
Hedging reserve |
Reverse acquisition reserve |
Merger reserve |
Retained earnings |
JSOP reserve |
Equity Attributable to Shareholders of EROS International PLC. |
Non- controlling interest |
Total equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of |
$ | 30,793 | $ | 356,865 | $ | (60,609 | ) | $ | 6,622 | $ | 1,856 | $ | (1,179 | ) | $ | (22,752 | ) | $ | 69,586 | $ | 376,317 | $ | (17,167 | ) | $ | 740,332 | $ | 68,762 | $ |
809,094 |
||||||||||||||||||||||||||||||||||||||
Profit/(loss) for |
— | — | — | — | — | — | — | — | 6,484 | — | 6,484 | 7,044 | 13,528 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other |
— | — | (2,361 | ) | — | 29 | 603 | — | — | — | — | (1,729 | ) | (521 | ) | (2,250 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total |
— | — | (2,361 | ) | — | 29 | 603 | — | — | 6,484 | — | 4,755 | 6,523 | 11,278 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issue of shares |
808 | 29,644 | — | — | — | — | — | — | — | — | 30,452 | — | 30,452 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued |
265 | 12,541 | — | — | — | — | — | — | (12,806 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share based |
— | — | — | — | — | — | — | — | 18,175 | — | 18,175 | 470 | 18,645 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in |
— | — | — | — | — | — | — | 387 | — | — | 387 | 160 | 547 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issue out of |
— | (164 | ) | — | — | — | — | — | — | — | 1,182 | 1,018 | — | 1,018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of |
$ | 31,866 | 398,886 | (62,970 | ) | 6,622 | 1,885 | (576 | ) | (22,752 | ) | 69,973 | 388,170 | (15,985 | ) | 795,119 | 75,915 | 871,034 | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
1. | TRADE AND OTHER RECEIVABLES |
As at | |||||||
December 31, 2017 |
March 31, 2017 |
||||||
Trade receivables, net | $ | 226,125 | $ | 226,822 | |||
Other receivables | 36,943 | 25,683 | |||||
Prepaid charges | 506 | 277 | |||||
Accrued revenues | 6,215 | 1,423 | |||||
Trade and other receivables | $ | 269,789 | $ | 254,205 | |||
Current trade and other receivables | 246,150 | 242,762 | |||||
Non-current trade and other receivables | 23,639 | 11,443 | |||||
$ | 269,789 | $ | 254,205 | ||||
2. | BORROWINGS |
An analysis of long-term borrowings is shown in the table below.
As at | ||||||||||||
Nominal Interest Rate |
Maturity |
December 31, 2017 |
March 31, 2017 |
|||||||||
Asset backed borrowings | ||||||||||||
Vehicle loan | 10.0% - 12.0% | 2017-21 | $ | 195 | $ | 325 | ||||||
Term loan | BPLR+1.8% - 2.75% | 2017 | — | 1,264 | ||||||||
Term loan | BPLR+2.75% | 2017-18 | — | 466 | ||||||||
Term loan | BPLR+2.85% | 2019-20 | 4,109 | 5,776 | ||||||||
Term loan | BPLR+2.55% - 3.4% | 2020-21 | 9,725 | 11,945 |
|
|||||||
Term loan | 13.75% | 2017-22 | 10,008 | — | ||||||||
Retail bond | 6.5% | 2021-22 | $ | 67,513 | $ | 62,672 | ||||||
Revolving facility |
LIBOR +7.5% and |
2017-18 | — | 85,000 | ||||||||
Term loan | MCLR+3.45% | 2021-22 | 12,674 | 14,603 | ||||||||
$ | 104,224 | $ | 182,051 | |||||||||
Other borrowings | 10.5% | 2021-22 | — | 5,853 | ||||||||
Convertible notes | 14.2% | 2020-21 | 93,994 | — | ||||||||
$ | 93,994 | $ | 5,853 | |||||||||
Nominal value of borrowings | $ | 198,218 | $ | 187,904 | ||||||||
Cumulative effect of unamortized costs | (1,241) | (1,665 | ) | |||||||||
Installments due within one year | (46,038) | (96,398 | ) | |||||||||
Long-term borrowings — at amortized cost | $ | 150,939 | $ | 89,841 |
Bank Prime Lending Rate ("BPLR") and Marginal Cost Based Lending Rate
("MCLR") is an Indian equivalent to LIBOR. Asset backed borrowings are
secured by fixed and floating charges over certain Group assets.
Analysis of short-term borrowings
As at | |||||||||||
Nominal |
December 31, 2017 |
March 31, 2017 |
|||||||||
Asset backed borrowings | |||||||||||
Export credit bill discounting and overdraft | BPLR+1-3.5% | $ | 44,648 | $ | 41,687 | ||||||
Export credit and overdraft | LIBOR+4.5% | 21,512 | 24,572 | ||||||||
Other short-term loan | 13-14.25% | 10,204 | 5,396 | ||||||||
Other short-term loan | 10.20% | 11,510 | — | ||||||||
Term loan | MCLR+4.25% | — | 4,943 | ||||||||
$ | 87,874 | $ | 76,598 | ||||||||
Unsecured borrowings | |||||||||||
Other short-term loan | 12-14% | — | 7,033 | ||||||||
Installments due within one year on long-term borrowings | 46,038 | 96,398 | |||||||||
Short-term borrowings - at amortized cost | $ | 133,912 | $ | 180,029 |
Fair value of the long-term borrowings as at December 31, 2017 is $166,641 (March 31, 2017: $155,923). Fair values of long-term financial liabilities except retail bonds and convertible notes have been determined by calculating their present values at the reporting date, using fixed effective market interest rates available to the respective entities within the Group. As at December 31, 2017, the fair value of retail bond amounting to $49,622 (March 31, 2017: $43,416) has been determined using quoted prices from the London Stock Exchange (LSE). As at December 31, 2017, the fair value of convertible notes amounting to $93,994 has been determined using implied cost of debt as on the issue date. Carrying amount of short-term borrowings approximates fair value.
3. | ACCEPTANCES |
December 31, 2017 |
March 31, 2017 |
|||||||
(in thousands) | ||||||||
Payable under the film financing arrangements | $ | 6,891 | $ | 8,935 | ||||
$ | 6,891 | $ | 8,935 |
Acceptances comprise of 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 | |||||||
Ordinary shares of 30p each at March 31, 2017 | 83,333,333 | 25,000 | |||||
Ordinary shares of 30p each at December 31, 2017 | 100,000,000 | 30,000 |
*The company increased number of authorized share capital from 83,333,333 shares to 100,000,000 shares.
Number of Shares | USD | ||||||||||||
Allotted, called up and fully paid |
A Ordinary |
B Ordinary 30p Shares |
(in thousands) | ||||||||||
As at March 31, 2016 | 32,949,314 | 24,960,654 | $ | 30,793 | |||||||||
Issue of shares in the quarter ended June 30, 2016 | 1,750 | — | 1 | ||||||||||
Issue of shares in the quarter ended September 30, 2016 | 2,515,436 | 986 | |||||||||||
Issue of shares in the quarter ended December 31, 2016 | 231,043 | 87 | |||||||||||
Issue of shares in the quarter ended March 31, 2017 | 33,387 | — | 10 | ||||||||||
Transfer of B Ordinary to A Ordinary share | 5,581,272 | (5,581,272 | ) | — | |||||||||
As at March 31, 2017 | 41,312,202 | 19,379,382 | $ | 31,877 | |||||||||
Issue of shares in the quarter ended June 30, 2017 | 12,000 | — | 5 | ||||||||||
Issue of shares in the quarter ended September 30, 2017 | 288,291 | — | 114 | ||||||||||
Issue of shares in the quarter ended December 31, 2017 | 1,681,520 | — | 657 | ||||||||||
Transfer of B Ordinary to A Ordinary share | 9,666,667 | (9,666,667) | — | ||||||||||
As at December 31, 2017 | 52,960,680 | 9,712,715 | $ | 32,653 | |||||||||
On May 11, 2017, the Company issued 12,000 shares entered into an exit agreement with an employee pursuant to which the Board approved a grant of 12,000 ‘A' ordinary share awards with Nil exercise price and a fair market value of $10.8 per share.
In May 2017, the Company issued 90,000 shares entered into an exit agreement with an employee pursuant to which the Board approved a grant of 90,000 ‘A' ordinary share awards with Nil exercise price and a fair market value of $10 per share. These shares were issued in July and August 2017.
Between the months of May to December, permitted Class B shares aggregating to 9,666,667 were converted into Class A shares. This was effected through the cancellation of 9,666,667 Class B shares and subsequent issuance of the equivalent amount of Class A shares.
In June 2015, 300,000 ‘A' ordinary shares awards were granted to the Group CFO with a fair market value of $21.34 per share. Subject to continued employment, these awards with nominal value exercise price vest annually in three tranches beginning June 9, 2016. Out of which, 200,000 shares were issued in September 2017.
On September 24, 2014, the Board approved a grant of 116,730 ‘A' ordinary share awards to certain employees. These awards, granted to the employees on October 21, 2014 with $Nil exercise price, subject to continued employment, vest annually in three equal tranches from the date of grant. Fair value of each award was $17.07. In October and November 2017, 24,550 shares were issued.
On October 6, 2017, 25,000 ‘A' ordinary shares were issued to a consultant with a fair value of $14.3 per share.
On October 24, 2017, 148,895 ‘A' ordinary shares were issued to employee as a settlement compensation with a fair value of $12.2 per share.
On November 15, 2017, 9,375 ‘A' ordinary shares were exercised by an employee.
On June 28, 2016, the Board of Directors approved a grant of 197,820 share awards to certain employees with a fair value of $ 14.68 per share. Subject to continued employment, these awards with Nil exercise price vest over a period of two and half years with first tranche vesting on November 11, 2016. In November and December 2017, 52,180 shares were issued.
On November 22, 2017, the Board of Directors approved to offset loan and advances of Founder Group to the company by approving the issuance of 1,421,520 ‘A' ordinary shares with a fair value of $12.2 per share which were subsequently issued in accordance with the resolution.
5. | INTANGIBLE CONTENT ASSETS |
Gross Content Assets |
Accumulated Amortization |
Net Content Assets |
|||||||||||
As at December 31, 2017 | |||||||||||||
Film and content rights | $ | 1,453,393 | $ | (837,323) | $ | 616,070 | |||||||
Content advances | 286,933 | — | 286,933 | ||||||||||
Film productions | 5,327 | — | 5,327 | ||||||||||
Non-current content assets | $ | 1,745,653 | $ | (837,323) | $ | 908,330 | |||||||
As at March 31, 2017 | |||||||||||||
Film and content rights | $ | 1,430,523 | $ | (796,058 | ) | $ | 634,465 | ||||||
Content advances | 266,232 | — | 266,232 | ||||||||||
Film productions | 3,931 | — | 3,931 | ||||||||||
Non-current content assets | $ | 1,700,686 | $ | (796,058 | ) | $ | 904,628 | ||||||
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 ending December 31, |
Nine months ending December 31, |
||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
IPO India Plan | $ | 511 | $ | 574 | $ | 1,230 | $ | 1,787 | |||||||||
JSOP Plan | — | 905 | 615 | 2,716 | |||||||||||||
Option award scheme 2012 | — | 102 | 197 | 599 | |||||||||||||
2014 Share Plan* | (467) | 246 | (83) | 1,128 | |||||||||||||
2015 Share Plan | 19 | 80 | 86 | 295 | |||||||||||||
Other share option awards | 4,109 | (594) | 5,871 | 1,662 | |||||||||||||
Management scheme (staff share grant) | 1,859 | 2,806 | 5,586 | 10,458 | |||||||||||||
$ | 6,031 | $ | 4,119 | $ | 13,502 | $ | 18,645 | ||||||||||
In the meeting date November 22, 2017, the Board of Directors approved the following grants:
243,300 ‘A' ordinary share awards to certain employees with $Nil exercise price, subject to continued employment, first vest immediately and remaining two tranches vest annually from the date of grant. Fair value of each award was $13.25.
525,095 ‘A' ordinary share awards to certain employees and the Group CFO with $Nil exercise price, subject to continued employment vest annually in three equal tranches from the date of grant. Fair value of each award was $13.25.
680,000 ‘A' ordinary shares to certain executive directors. with $Nil exercise price, subject to continued employment vest annually in three equal tranches from the date of grant. Fair value of each award was $13.25.
20,000 ‘A' ordinary shares to certain non- executive directors with a fair market value of $13.25 per share. Subject to continued directorship, with nominal exercise price, vest on November 22, 2018.
*Above includes reversal of charges on account of forfeiture of 100,000 shares
7. | EARNINGS PER SHARE |
Three months ended December 31, | Nine months ended December 31, | |||||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | Basic | Diluted | |||||||||||||||||||||||||
Earnings/(loss) |
$ | 301 | 301 | $ | 8,184 | 8,184 | $ | (2,957) | (2,957) | $ | 6,484 | 6,484 | ||||||||||||||||||||
Potential |
— | (6,086) | — | (265) | — | (6,324) | — | (588) | ||||||||||||||||||||||||
Adjusted |
$ | 301 | (5,785) | $ | 8,184 | 7,919 | $ | (2,957) | (9,281) | $ | 6,484 | 5,896 | ||||||||||||||||||||
Number of |
||||||||||||||||||||||||||||||||
Weighted |
61,715,635 | 61,715,635 | 60,465,835 | 60,465,835 | 61,132,018 | 61,132,018 | 58,964,412 | 58,964,412 | ||||||||||||||||||||||||
Potential |
— | 5,860,475 | — | 1,972,602 | — | 2,969,105 | — | 1,680,698 | ||||||||||||||||||||||||
Adjusted |
61,715,635 | 67,576,110 | 60,465,835 | 62,438,437 | 61,132,018 | 64,101,123 | 58,964,412 | 60,645,110 | ||||||||||||||||||||||||
Earnings per |
||||||||||||||||||||||||||||||||
Earning |
0.5 | (8.6) | 13.5 | 12.7 | (4.8) | (14.5) | 11.0 | 9.7 | ||||||||||||||||||||||||
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.
8. | BUSINESS SEGMENTAL DATA |
Three months ended December 31, |
Nine months ended December 31, |
|||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue by customer's location | ||||||||||||||||
India | $ | 26,724 | $ | 24,810 | $ | 81,293 | $ | 109,532 | ||||||||
Europe | 253 | 1,464 | 2,297 | 7,331 | ||||||||||||
North America | 1,444 | 4,528 | 3,703 | 9,255 | ||||||||||||
Rest of the world | 36,766 | 26,546 | 102,034 | 74,201 | ||||||||||||
Total Revenue | $ | 65,187 | $ | 57,348 | $ | 189,327 | $ | 200,319 | ||||||||
Three months ended December 31, |
Nine months ended December 31, |
|||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue by group's operation | ||||||||||||||||
India | $ | 22,253 | $ | 19,647 | $ | 73,024 | $ | 102,248 | ||||||||
Europe | 5,065 | 5,860 | 19,698 | 15,053 | ||||||||||||
North America | 125 | 569 | 702 | 2,461 | ||||||||||||
Rest of the world | 37,744 | 31,272 | 95,903 | 80,557 | ||||||||||||
Total Revenue | $ | 65,187 | $ | 57,348 | $ | 189,327 | $ | 200,319 | ||||||||
9. | OTHER (LOSSES)/ GAINS |
Three months ended December 31, |
Nine months ended December 31, |
|||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Gains on sale of available for sale financial assets | $ | — | $ | — | $ | — | $ | 58 | ||||||||
Net foreign exchange gains/(losses) | 313 | 1,722 | (3,619) | 5,172 | ||||||||||||
(Losses) on sale of property, plant and equipment | (14) | — | (18) | — | ||||||||||||
Net (losses) on derecognition of financial assets
measured at amortized cost |
(930 | ) | — | (2,708) | — | |||||||||||
Credit impairment (losses) | (1,439 | ) | — | (4,446) | — | |||||||||||
Net (losses)/ gains on held for trading financial liabilities | (969) | 8,542 | — | 8,599 | ||||||||||||
Others | (6,905) | — | (6,905) | — | ||||||||||||
$ | (9,944) | $ | 10,264 | $ | (17,696) | $ | 13,829 |
The net (losses)/gains on held for trading financial liabilities in the three months ended December 31,2017 and 2016, respectively, principally relate to derivative instruments not designated in a hedging relationship.
10. | NON-CASH EXPENSE/(INCOME) |
Significant non-cash expenses except loss on sale of assets, share based compensation, depreciation, derivative interest and amortization were as follows:
Nine months ended December 31, |
||||||||
2017 | 2016 | |||||||
(in thousands) | ||||||||
Net gains on held for trading financial liabilities | $ | — | $ | (8,599) | ||||
Provisions for trade and other receivables | 1,795 | 290 | ||||||
Balance written off | — | (367) | ||||||
Credit impairment losses | 4,446 | — | ||||||
Impairment loss on content advances | — | 950 | ||||||
Net Losses on derecognition of financial assets measured at amortized cost | 2,708 | — | ||||||
Unrealized foreign exchange loss/(gain) | (1,343) | (5,172) | ||||||
Others | 6,905 | — | ||||||
$ | 14,511 | $ | (12,898) |
11. NON GAAP-FINANCIAL MEASURES
Adjusted EBITDA(Non-GAAP)
Three months ended |
Nine months ended |
||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||
(in thousand) | |||||||||||||||||||
Net income (GAAP) | $ | 3,201 | $ | 11,484 | $ | 7,215 | $ | 13,528 | |||||||||||
Income tax expense | 1,143 | 3,565 | 4,960 | 10,194 | |||||||||||||||
Net finance costs | 2,243 | 3,415 | 12,796 | 10,982 | |||||||||||||||
Depreciation | 305 | 197 | 838 | 590 | |||||||||||||||
Amortization(1) | 387 | 259 | 1,112 | 1,029 | |||||||||||||||
EBITDA | 7,279 | 18,920 | 26,921 | 36,323 | |||||||||||||||
Share based payments(2) | 6,031 | 4,119 | 13, 502 | 18,645 | |||||||||||||||
Gains on sale of available – for – sale financial assets | — | — | — | (58 | ) | ||||||||||||||
Net losses on derecognition of financial assets measured at amortized cost | 930 | — | 2,708 | — | |||||||||||||||
Credit impairment losses | 1,439 | — | 4,446 | — | |||||||||||||||
Loss on sale of property | 14 | — | 18 | — | |||||||||||||||
Net losses/(gains) on held for trading financial liabilities | 969 | (8,542 | ) | — | (8,599 | ) | |||||||||||||
Others | 6,905 | — | 6,905 | — | |||||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 23,567 | $ | 14,497 | $ | 54,500 | $ | 46,311 |
(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: http://www.businesswire.com/news/home/20180221005674/en/
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