TIDMEROS
RNS Number : 3097R
Eros International PLC
24 October 2013
EROS INTERNATIONAL PLC
("Eros" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2013
FINANCIAL HIGHLIGHTS
-- Revenue on a constant currency basis in line at $85.0 million (2012: $85.0 million).
-- Reported revenue down 7.5% to $85.0 million (2012: $91.9 million).
-- Operating profit down 18.1% to $14.5 million (2012: $17.7 million).
-- Basic EPS up 131.3% to 7.4 cents (2012: 3.2 cents).
OPERATIONAL HIGHLIGHTS
-- We released 26 new films in the six months ended September
30, 2013, of which none were high budget films and eleven were
medium budget films, compared to 42 films in the six months ended
September 30, 2012, of which three were high budget films and five
were medium budget films.
-- While our reported currency revenues declined, on a constant
currency basis, our revenues remained flat, which reflects the
higher than average performance of our medium budget films in this
period such as Ranjhanaa, Grand Masti and internationally Yeh
Jawaani Hai Deewani.
-- Television revenues included amounts recognised under our
previously announced Viacom 18 deal and ancillary revenues and the
impact from the mix of film releases was offset by higher catalogue
revenues in the six months ended September 30, 2013, compared to
the six months ended September 30, 2012.
-- The six months ended September 30, 2013 also reflected a lack
of production services revenues attributable to EyeQube, our visual
special effects studio that closed down its business in August
2012.
-- In collaboration with HBO Asia, two premium television
channels, HBO Defined and HBO Hits, were launched on the DISH and
Airtel DTH digital platforms in February 2013, and on Hathway and
GTPL digital cable platforms in August 2013.
Selected Major Releases in Fiscal Year Ending March 31, 2014
(1)
Co-Production/ Anticipated Quarter
Film Cast/Director Acquisition Genre of Release
---------------------- --------------------------- ---------------------------- -------------- -------------------
Kochadaiyaan (Tamil) Rajinikanth, Soundarya R Co-production Mythological Q3 FY 2014
Ashwin (director)
Ram Leela Ranvir Singh, Deepika Co-production Romance Q3 FY 2014
Padukone, Sanjay Leela
Bhansali (director)
R... Rajkumar Shahid Kapur, Sonakshi Co-production Action/Romance Q3 FY 2014
Sinha, Prabhudeva
(director)
Krishh 3 Hrithik Roshan, Priyanka Acquisition (International Action/Drama Q3 FY 2014
Chopra, Rakesh Roshan only)
(director)
Singh Saheb The Great Sunny Deol, Anil Sharma Co-production Drama Q3 FY 2014
(director)
Happy Ending Saif Ali Khan, Ileana D Co-production Romance/Comedy Q4 FY 2014
Cruz, Raj Nidimoru & D.K.
Krishna (directors)
1-Nenokkadine (Telegu) Mahesh Babu, Sukumar Co-production Action/drama Q4 FY 2014
(director)
_______________
(1) The list of films set forth in the table above is for illustrative purposes only, is not complete
and only includes anticipated future releases. Due to the uncertainties involved in the development
and production of films, the date of their completion can be significantly delayed, planned
talent can change and, in certain circumstances, films can be cancelled or not approved by
the Indian Central Board of Film Certification.
For further information, please contact:
Eros International Plc Eros International Plc
Sean Hanafin Jamie M.M. Kirkwood
Chief Corporate & Strategy Officer VP, Investor Relations
T: +44 (0) 20 7258 9909 T: +44 (0) 20 7258 9906
Investec Bank plc Peel Hunt LLP
Nominated Adviser & Joint Broker Joint Broker
Patrick Robb / Jeremy Ellis / Carlton Richard Kauffer
Nelson T: +44 (0) 20 7418 8900
T: +44 (0) 20 7597 5000
Operating and Financial Review
This financial review is primarily based upon the comparison of
our results for the six months ended September 30, 2013 with those
for the six months ended September 30, 2012. Unless otherwise
stated percentage growth relates to the percentage comparison
between these two periods.
Overview
We are a leading global company in the Indian film entertainment
industry and we co-produce, acquire and distribute Indian language
films in multiple formats worldwide. Our success is built on the
relationships we have cultivated over the past 30 years with
leading talent, production companies, exhibitors and other key
participants in our industry. Leveraging these relationships, we
have aggregated rights to over 2,000 titles in our library, plus
approximately 700 additional films for which we hold digital rights
only, including recent and classic titles that span different
genres, budgets and languages, and we have distributed a portfolio
of over 230 new films over the last three completed fiscal years
and 26 new films in the three months ended September 30, 2013.
The primary geographic areas from which we derive revenue are
India, Europe and North America, with the remainder of our revenue
generated from an area that we report as the rest of the world.
Outside of India, we distribute films to South Asian expatriate
populations and in countries where we release Indian films that are
subtitled or dubbed in local languages. Our primary revenue streams
are derived from three channels: theatrical, television syndication
and digital and ancillary. The contribution from these three
distribution channels can fluctuate year over year based on, among
other things, our mix of films and budget levels, the size of our
television syndication deals and our ability to license music in
any particular year.
Six months ended September 30 Year ended March 31
2013 2012 2013
Reported Constant Currency Reported Constant Currency Reported Constant Currency
Revenue $ 84,987 $ 84,987 $ 91,919 $ 85,002 $ 215,346 $ 201,416
Cost of sales (54,664) (54,664) (62,862) (59,508) (134,002) (127,268)
-------- ----------------- -------- ----------------- ---------------- -----------------
Gross profit $ 30,323 $ 30,323 $ 29,057 $ 25,494 $ 81,344 $ 74,148
======== ================= ======== ================= ================ =================
Revenue. Revenue was $85.0 million in the six months ended
September 30, 2013, compared to $91.9 million in the six months
ended September 30, 2012, a decrease of 6.9 million, or 7.5%. We
released 26 new films in the six months ended September 30, 2013,
of which there were no high budget films and eleven medium budget
films compared to 42 films in the six months ended September 30,
2012, of which three were high budget films and five were medium
budget films.
Revenue by customer location from India was $43.4 million in the
six months ended September 30, 2013, compared to $65.8 million in
the six months ended September 30, 2012, a decrease of $22.4
million, or 34.0%, principally reflecting lower theatrical revenues
due to the change in the mix of film releases and the strong
performance in the six months ended September 30, 2012 of certain
high budget films. Revenue from Europe was $9.6 million in the six
months ended September 30, 2013, compared to $14.0 million in the
six months ended September 30, 2012, a decrease of $4.4 million, or
31.4%, principally reflecting a decline in television and
production services revenue in the six months ended September 30,
2013. Revenue from North America was $5.9 million in the six months
ended September 30, 2013, compared to $3.4 million in the six
months ended September 30, 2012, an increase of $2.5 million, or
73.5%, principally reflecting increased digital and syndication
revenues. Revenue from the rest of the world was $26.1 million in
the six months ended September 30, 2013, compared to $8.7 million
in the six months ended September 30, 2012, an increase of $17.4
million, or 200.0%, principally reflecting an increase in catalogue
sales with respect to television as well as digital and ancillary
rights.
Cost of sales. Cost of sales was $54.7 million in the six months
ended September 30, 2013, compared to $62.9 million in the six
months ended September 30, 2012, a decreased of $8.2 million, or
13.0%. The decrease was primarily due to an amount of $5.5 million
impacting the six months ended September 30, 2012 due to the
rescinding of a sales contract. In addition, amortization in the
six months ended September 30, 2013 decreased by $4.6 million due
in part to the lower capitalized cost of our released slate in the
period as compared to the released slate in the six months ended
September 30, 2012.
Gross profit. Gross profit was $30.3 million in the six months
ended September 30, 2013 compared to $29.1 million in the six
months ended September 30, 2012, an increase of $1.2 million, or
4.1%, driven primarily by the decrease in revenue, which was
partially offset by a decrease in cost of sales. As a percentage of
revenue, our gross profit margin increased to 35.6% in the six
months ended September 30, 2013 from 31.7% in the six months ended
September 30, 2012.
Administrative costs. Administrative costs, including rental,
legal, travel and audit expenses, were $15.8 million in the six
months ended September 30, 2013, compared to $11.3 million in the
six months ended September 30, 2012, an increase of $4.5 million,
or 39.8%, which was driven by an increase of $5.9 million in share
based payments in the six months ended September 30, 2013. The
increase was primarily due to the charge arising from the issue of
shares to employees. As a percentage of revenue, administrative
costs were 18.6% in the six months ended September 30, 2013,
compared to 12.3% in the six months ended September 30, 2012.
Net finance costs. Net finance costs in the six months ended
September 30, 2013 were $4.2 million, compared to $0.5 million in
the six months ended September 30, 2012, an increase of $3.7
million, or 740.0%. The increase was primarily attributable to a
reduction in finance income together with higher finance costs
reflecting an overall increase in net debt as a result of increased
working capital and continued investment in content.
Other gains and losses. Other gains in the six months ended
September 30, 2013 were $5.2 million, principally comprised of a
$5.0 million interest rate derivative gain and a net foreign
exchange gain of $0.2 million, compared to a loss of $9.8 million
in the six months ended September 30, 2012, principally arising
from a foreign exchange loss of $1.2 million and a $8.4 million
interest rate derivative loss. The foreign exchange gain for the
six months ended September 30, 2013 was mainly caused by the fall
of the U.S dollar as compared to the sterling which impacted
Sterling deposits, offset by the fall of India Rupee as compared to
the U.S. Dollar which impacted U.S. Dollar denominated loans in one
of our Indian subsidiaries.
Income tax expense. Income tax expense in the six months ended
September 30, 2013 was $3.9 million, compared to $1.9 million in
the six months ended September 30, 2012, an increase of $2.0
million, or 105.3%. Our effective tax rate was 25.2% in the six
months ended September 30, 2013 and 26.1% in the six months ended
September 30, 2012.
Sources and Uses of Cash
Six months ended September 30 Year Ended March 31
--------------------------------- ---------------------
2013 2012 2013
--------------- -------------- -----------------
in thousands
Net cash from operating activities............ $ 40,637 $ 58,759 $ 137,447
Net cash used in investing activities....... $ (59, 799) $ (94,687) $ (182,328)
Net cash from financing activities............ $ 21,953 $ (4,719) $ 11,471
Net cash from operating activities in the six months ended
September 30, 2013 was $40.6 million compared to $58.8 million in
the six months ended September 30, 2012, a decrease of $18.2
million, or 31.0%, notwithstanding a decrease in interest paid and
a reduction in taxes in the six months ended September 30, 2013 of
$0.3 million and $1.4 million respectively. In addition, there was
an increase in working capital of $18.6 million in the six months
ended September 30, 2013, primarily due to a $2.9 million decrease
in trade payables and an increase in trade receivables of $15.7
million, compared to a $3.2 million decrease in trade receivables
and a $3.1 million increase in trade payables in the six months
ended September 30, 2012.
Net cash used in investing activities in the six months ended
September 30, 2013 was $59.8 million, compared to $94.7 million in
the six months ended September 30, 2012, a decrease of $34.9
million, or 36.9%, reflecting a lower investment in film content.
Our investment in film content in the six months ended September
30, 2013 was $61.2 million, compared to $98.0 million in the six
months ended September 30, 2012, a decrease of $36.8million, or
37.6%, reflecting the lower comparable overall cost of films
released in the two periods.
Net cash from financing activities in the six months ended
September 30, 2013 was $22.0 million, compared to a net cash
outflow of $4.8 million in the six months ended September 30, 2012,
principally due to the additional net proceeds of long-term
borrowings of $12.9 million as well as short-term borrowings of
$10.6 million.
The results for the six months ended September 30, 2012 have
been restated to be consistent with the application of average
exchange rates being applied on a quarterly basis as opposed to a
six monthly basis and also to incorporate changes in estimates
relating to derivatives as reflected in the audited results for the
year ended March 31, 2013. While this affects the figures for the
six months ended September 30, 2012, the figures for the year ended
March 31, 2013 are as previously reported.
A registration statement relating to Eros' A Ordinary Shares has
been filed with the United States Securities and Exchange
Commission, but has not yet become effective. These securities may
not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This press release shall
not constitute an offer to sell or a solicitation of an offer to
buy nor shall there be any offer or sale of these securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction. 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 and
statements regarding the proposed offering and the anticipated
costs of these transactions 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 market
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' Registration Statement on Form F-1 filed with the
U.S. Securities and Exchange Commission. Eros undertakes no
obligation to revise the forward-looking statements included in
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.
EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION AS AT SEPTEMBER 30, 2013 AND MARCH 31, 2013
As at September 30 As at March 31
Note 2013 2013
---- -------------------- ----------------
(in thousands)
ASSETS
Non-current
assets.....................................................
........................
Property, plant and
equipment.....................................................
...... $ 10,279 $ 11,680
Goodwill......................................................
........................................... 1,878 1,878
Intangible assets - trade
name........................................................ 14,000 14,000
Intangible assets -
content.......................................................
....... 8 531,853 535,304
Intangible assets -
others........................................................
........ 1,804 2,117
Available-for-sale financial
assets.................................................... 30,385 30,385
Deferred tax
assets........................................................
....................... 541 569
-------------------- ----------------
$ 590,740 $ 595,933
=== =============== ============
Current assets
Inventories...................................................
......................................... $ 756 $ 793
Trade and other
receivables...................................................
............ 9 104,575 93,327
Current tax
receivable....................................................
...................... 748 962
Cash and cash
equivalents...................................................
.............. 11 106,076 107,642
-------------------- ----------------
$ 212,155 $ 202,724
--- --------------- ------------
Total
assets........................................................
................................... $ 802,895 $ 798,657
=== =============== ============
LIABILITIES
Current liabilities
Trade and other
payables......................................................
............. 10 $ 29,801 $ 28,979
Short-term
borrowings....................................................
.................... 12 81,403 79,902
Current tax
payable.......................................................
....................... $ 469 $ 1,846
--- --------------- ------------
$ 111,673 $ 110,727
=== =============== ============
Non-current liabilities
Long-term
borrowings....................................................
..................... 12 $ 176,359 $ 165,898
Other Long term
liabilities...................................................
................ 345 357
Derivative financial
instruments...................................................
..... 13 11,657 16,660
Deferred
tax...........................................................
................................ 18,148 18,839
-------------------- ----------------
$ 206,509 $ 201,754
--- --------------- ------------
Total
liabilities................................................
................................ $ 318,182 $ 312,481
--- --------------- ------------
Equity
Share
capital.......................................................
................................... 16 $ 23,674 $ 22,653
Share
premium.......................................................
............................... 164,996 159,547
Reserves......................................................
.......................................... 321,317 311,315
Other components of
equity........................................................
...... (43,823) (29,432)
JSOP
Reserve.......................................................
................................. (25,505) (25,505)
-------------------- ----------------
Equity attributable to equity holders of
Eros International Plc $ 440,659 $ 438,578
Non-controlling
interest......................................................
................ 44,054 47,598
-------------------- ----------------
Total
equity.....................................................
.................................. $ 484,713 $ 486,176
=== =============== ============
Total liabilities and
equity.....................................................
....... $ 802,895 $ 798,657
=== =============== ============
The accompanying notes form an integral part of these unaudited
condensed consolidated financial statements.
EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
Six months ended September 30 Year ended March 31
-------------------------------------
Note 2013 2012 2013
----- ------------------- ------------ ---------------------
(in thousands, except per share amounts)
Revenue..................................
.........................................
...................... 3 $ 84,987 $ 91,919 $ 215,346
Cost of
sales....................................
.........................................
............. (54,664) (62,862) (134,002)
------------------- ------------ -----------------
Gross
profit...................................
.........................................
............... 30,323 29,057 81,344
Administrative
costs....................................
........................................ (15,791) (11,341) (26,308)
------------------- ------------ -----------------
Operating
profit...................................
.........................................
....... 14,532 17,716 55,036
Financing
costs....................................
.........................................
....... 4 (5,142) (3,821) (6,202)
Finance
income...................................
.........................................
......... 4 983 3,325 4,733
------------------- ------------ -----------------
Net finance
costs....................................
.........................................
..... 4 (4,159) (496) (1,469)
Other
gains/(losses)...........................
.........................................
......... 5 5,177 (9,786) (7,989)
------------------- ------------ -----------------
Profit before
tax......................................
.........................................
.... 15,550 7,434 45,578
Income tax
expense..................................
.........................................
... 6 (3,908) (1,943) (11,913)
------------------- ------------ -----------------
Profit for the
period...................................
.........................................
. $ 11,642 $ 5,491 $ 33,665
===== ============ =========== =================
Attributable to:
Owners of the Eros International
Plc......................................
........... $ 8,811 $ 3,776 $ 27,107
Non-controlling
interest.................................
..................................... 2,831 1,715 6,558
------------------- ------------ -----------------
$ 11,642 $ 5,491 $ 33,665
===== ============ =========== =================
Earnings per share
(cents)..................................
................................ 7
Basic earnings per
share....................................
................................. 7.40 3.19 22.9
Diluted earnings per
share....................................
.............................. 7.34 3.13 22.9
The accompanying notes form an integral part of these unaudited
condensed consolidated financial statements.
EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
Six months ended September 30 Year ended March 31
-----------------------------------
Note 2013 2012 2013
------ ----------------- ------------ ---------------------
(in thousands)
Profit for the period
Other comprehensive
income...............................................
....... $ 11,642 $ 5,491 $ 33,665
Items that may be reclassified
subsequently
to profit or loss
Revaluation of Property - - 1,726
Exchange differences on translating foreign
operations.......... (21,383) (9,441) (14,613)
Cash flow hedges
Reclassification to profit and
loss................................................ 617 - --
----------------- ------------ -----------------
Total other comprehensive loss for the
period.......................... $ (20,766) $ (9,441) $ (12,887)
------------- ----------- -----------------
Total comprehensive loss for the period, net of
tax.................. $ (9,124) $ (3,950) $ (20,778)
------------- ----------- -----------------
Attributable to:
Owners of Eros International
Plc.................................................. (5,580) (4,270) 16,194
Non-controlling
interests............................................
................... (3,544) 320 (4,584)
================= ============ =================
The accompanying notes form an integral part of these unaudited
condensed consolidated financial statements.
EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
Year ended March
Six months ended September 30, 31
---------------------------------- ----------------
2013 2012 2013
------------------ -------------- ----------------
(in thousands)
Cash flow from operating activities
Profit before
tax.......................................................
.......................................... $ 15,550 $ 7,434 $ 45,578
Adjustments for:
Depreciation..............................................
........................................................ 359 484 1,003
Share based
payment...................................................
.................................... 6,669 838 1,888
Amortisation of intangibles-
content...................................................
......... 43,450 48,080 101,955
Amortisation of intangibles- other............. 251 261 715
Non cash
items.....................................................
............................................ (4,734) 8,352 5,662
Net finance
charge....................................................
....................................... 4,159 496 1,469
Loss on sale of
property..................................................
...... --- 241 389
Movement in trade and other
receivables...............................................
..... (15,687) (3,185) (21,338)
Movement in
inventories...............................................
................................. 5 265 254
Movement in trade
payables..................................................
........................ (2,898) 3,126 13,634
------------------ -------------- ----------------
Cash generated from
operations................................................
.................... 47,124 66,392 151,209
Interest
paid......................................................
................................................ (4,229) (3,916) (4,659)
Income taxes
paid......................................................
....................................... (2,258) (3,717) (9,103)
------------------ -------------- ----------------
Net cash generated from operating
activities............................................. $ 40,637 $ 58,759 $ 137,447
-------------- ------------- ----------------
Cash flows from investing activities
Purchase of property, plant and
equipment................................................. (68) (292) (86)
Proceeds from disposal of property, plant and
equipment........................ 8 518 88
Purchase of intangible film rights and related
content............................... (61,229) (97,988) (186,676)
Purchase of intangible assets
others....................................................
........ (121) (220) (473)
Interest
received..................................................
............................................. 1,611 3,295 4,819
------------------ -------------- ----------------
Net cash used in investing
activities................................................
............ $ (59,799) $ (94,687) $ (182,328)
-------------- ------------- ----------------
Cash flows from financing activities
Proceeds from disposal of subsidiary shares - - 9,435
Proceeds from issue of share capital by
subsidiary.................................... - 135 596
Proceeds from issue of share
capital...................................................
.......... 831 - -
Dividend to non-controlling interests - - (770)
Net change in other short term
debt......................................................
........
..........................................................
..........................................................
.... 8,225 (2,353) (6,969)
Proceeds from issuance of short term debt (commercial
paper) - - 1,842
Repayment of short term debt (commercial paper) - - (1,842)
Proceeds from long-term
borrowings................................................
............ 26,113 6,070 11,015
Repayment of long-term
borrowings................................................
............. (13,216) (8,643) (1,836)
------------------ -------------- ----------------
Net cash generated from financing
activities............................................. $ 21,953 $ (4,791) $ 11,471
============== ============= ================
Net decrease in cash and cash
equivalents...............................................
.. 2,791 (40,719) (33,410)
Effects of foreign exchange rate
changes...................................................
.. (4,357) (2,596) (4,370)
Cash and cash equivalents at beginning of
period..................................... 107,642 145,421 145,422
------------------ -------------- ----------------
Cash and cash equivalents at end of
period................................................. $ 106,076 $ 102,106 $ 107,642
============== ============= ================
The accompanying notes form an integral part of these unaudited
condensed consolidated financial statements.
EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2013
Other components of equity Reserves
------------------------------------------------------ ------------------------------------
Equity
Attributable
to
shareholders
Share Currency Available Reverse of EROS Non
Share Premium Translation for sale Revaluation Hedging Acquisition Merger Retained JSOP International Controlling Total
Capital Account Reserve Investments reserve Reserve Reserve Reserve Earnings reserve PLC. Interest Equity
--------- --------- ------------- ------------- ------------- --------- ------------- --------- ---------- --------- --------------- ------------- --------
in thousands
Balance
as of April 1,2013. $22,653 $159,547 $ (32,742) $5,802 $1,528 $(4,020) $(22,752) $62,097 $271,970 $(25,505) $438,578 $47,598 $ 486,176
Profit for the
period................... - - - - - - - - 8,811 - 8,811 2,831 11,642
Other
comprehensive
income/(loss)
for the period........ - - (15,008) - - 617 - - - - (14, 391) (6,375) (20,766))
Total
comprehensive
income/(loss)
for the period - - (15,008) - - 617 - - 8,811 - (5,580) (3,544) (9,124))
Issue of shares 992 -- 992 992
Share
based
compensation.................
........ 29 5,449 - - - - - - 1,191 - 6,669 - 6,669
Balance
as of
September 30,
2013......................... $23,674 $164,996 $(47,750) $5,802 $1,528 $(3,403) $(22,752) $62,097 $281,972 $(25,505) $440,659 $44,054 $ 484,713
------ ------- -------- ----- ----- ------ ------- ------ ------- -------- ------- ------ ---------
The accompanying notes form an integral part of these unaudited
condensed consolidated financial statements.
EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2012
Other components of equity Reserves
--------------------------------------------------- -------------------------------
Equity
Attributable
to
shareholders
Share Currency Available Reverse of EROS Non
Share Premium Translation for sale Revaluation Hedging Acquisition Merger Retained JSOP International Controlling Total
Capital Account Reserve Investments reserve Reserve Reserve Reserve Earnings reserve PLC. Interest Equity
------- -------- ------------- ----------- ------------- ------- ----------- ------- -------- -------- ------------- ----------- --------
(in thousands)
Balance as of
April 1, 2012 $21,687 $135,008 $ (20,534) $ 5,802 $ 233 $(4,020) $ (22,752) $57,766 $242,975 $ - $ 416,165 $ 38,083 $454,248
Profit for the
period - - - - - - - - 3,776 - 3,776 1,715 5,491
Other
comprehensive
income /
(loss) for
the period - - (8,046) - - - - - - - (8,046) (1,395) (9,441)
Total
comprehensive
income
/(loss) for
the period - - (8,046) - - - - - 3,776 - (4,270) 320 (3,950)
Issues of
shares upon
exercise of
options by
employees 966 24,539 - - - - - - - (25,505) - - -
Share based
Compensation
charge.......
........ - - - - - - - - 838 - 838 - 838
Changes in
ownership
interests in
subsidiaries
that do not
result in a
loss of
control - - - - - - - 100 - - 100 100
Balance as of
September 30,
2012 $22,653 $159,547 $ (28,580) $ 5,802 $ 233 $(4,020) $ (22,752) $57,866 $247,589 $(25,505) $ 412,833 $ 38,403 $451,236
------ ------- ------------ ---------- --------- ------ ---------- ------ ------- ------- ------------ ---------- -------
The accompanying notes form an integral part of these unaudited
condensed consolidated financial statements.
EROS INTERNATIONAL PLC
UNAUDITED NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
1. GENERAL INFORMATION
Eros International Plc ("Eros") and its subsidiaries' (the
"Group") principal activities include the acquisition,
co-production and distribution of Indian films and related content.
Eros International Plc is the Group's ultimate parent company. It
is incorporated and domiciled in the Isle of Man. The address of
Eros International Plc's registered office is Fort Anne, Douglas,
Isle of Man, IM1 5PD. Eros International Plc's shares are admitted
to trading on the Alternative Investment Market of the London Stock
Exchange ("AIM").
These condensed interim consolidated financial statements are
prepared in compliance with International Accounting Standard (IAS)
34, "Interim financial reporting" as issued by International
Accounting Standards Board ("IASB"). They do not include all of the
information required in annual financial statements in accordance
with IFRS as endorsed by the European Union, as issued by IASB and
should be read in conjunction with the audited consolidated
financial statements and related notes for the fiscal year ended
March 31, 2013.
The accounting policies applied are consistent with the policies
that were applied for the preparation of the consolidated financial
statements for the year ended March 31, 2013, except the
application of the followings standards IFRS 10 'Consolidated
Financial Statements', IFRS 11 'Joint Arrangements' and IFRS 13 '
Fair Value Measurements'. The effect of applying these standards
has not resulted in any impact on the classification or accounting
treatment of any items within the financial statements, but has led
to certain enhanced disclosures.
The composition of the Group and the ownership interests in
subsidiaries remain the same as those of March 31, 2013. All the
subsidiaries are primarily engaged in the principal activities of
the Group.
The Group meets its day to day working capital requirements and
funds its investment in content through a variety of banking
arrangements and cash generated from operations. There were no
material contingent liabilities as at September 30, 2013, except
for the amounts noted in relation to contractual obligations and
commitments in note 15.
The condensed interim financial statements for the six months
ended September 30, 2013 were approved by the Eros Board of
Directors and authorized for issue on 23 October, 2013.
2. 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.
3. BUSINESS SEGMENTAL DATA
Eros acquires co-produces and distributes Indian films in
multiple formats worldwide. Film content is monitored and strategic
decisions around the business operations are made based on the film
content, whether it is new release or catalog. Hence, management
identifies only one operating segment in the business, film
content. We distribute our film content to the Indian population in
India, the South Asian diaspora worldwide and to non-Indian
consumers who view Indian films that are subtitled or dubbed in
local languages. As a result of these distribution activities, Eros
has identified four geographic markets, India, North America,
Europe and the Rest of the World.
Revenues are presented based on customer location:
Year ended
Six months ended September 30 March 31
-----------------------------------
2013 2013 2013
----------------- ---------------- ----------
(in thousands)
Revenue by customer location
India............................................................
.................................................................
.......... $ 43,401 $ 65,768 $ 135,292
Europe...........................................................
.................................................................
........ 9,555 14,011 35,147
North
America..........................................................
............................................................ 5,913 3,419 12,678
Rest of the
world............................................................
...................................................... 26,118 8,721 32,229
----------------- ---------------- ----------
Total
Revenue..........................................................
............................................................. $ 84,987 $ 91,919 $ 215,346
=== ============ ============ ==========
Segment Assets
North Rest of the
Assets India America Europe World
---------------------------------------------------------------- -------- ---------- ------- -------------
(in thousands)
As of September 30, 2013.................................. $204,355 $ 36 $52,668 $ 302,755
As of March 31, 2013........................................... 230,143 44 32,672 302,120
4. FINANCE CHARGES AND INCOME
Year ended
Six months ended September 30 March 31
-----------------------------------
2013 2013 2013
----------------- ---------------- ----------
(in thousands)
Interest on bank overdrafts and
loans............................................................
........... $ 8,628 $ 5,883 $ 13,720
Reclassification of losses on hedging previously recognized in
other comprehensive
income...........................................................
............................... 617 - -
Capitalized interest on film
content..........................................................
.................. (4,103) (2,062) (7,518)
------------- ------------ ----------
Total finance
costs............................................................
........................................... $ 5,142 $ 3,821 $ 6,202
Less: Interest
revenue...........................................................
.......................................
Bank
deposits.........................................................
....................................................... (978) (2,866) (4,206)
Held- to- maturity financial
assets...........................................................
................... (5) (459) (527)
----------------- ---------------- ----------
Total finance
income...........................................................
......................................... (983) (3,325) (4,733)
----------------- ---------------- ----------
Net finance
costs............................................................
.............................................. $ 4,159 $ 496 $ 1,469
============= ============ ==========
5. OTHER GAINS AND LOSSES
Year ended
Six months ended September 30 March 31
------------------------------------
2013 2013 2013
------------------ ------------ ----------
(in thousands)
Loss on sale of fixed asset $ ---- $ 241 $ 389
Net foreign exchange (profit)/
losses..................................................
...................... (175 ) 1,193 1,933
Net (profit)/ loss on held for trading financial
liabilities......................................... (5,002 ) 8,352 5,667
------------------ ------------ ----------
$ (5,177 ) $ 9,786 $ 7,989
=== ============= =========== ==========
The net (profit)/loss on held for trading financial liabilities
principally relates to derivative instruments not designated in a
hedging relationship.
6. INCOME TAX EXPENSE
Income tax expense for the six months ended September 30, 2013
was $3.9 million compared to $1.9 million in the six months ended
September 30, 2012.
7. EARNINGS PER SHARE
Year Ended
Six months ended September 30 March 31,2013
--------------------------------------------------------------- ----------------------------
2013 2012
-------------------------------- ---------------------------- ------------- -------------
Basic Diluted Basic Diluted Basic Diluted
----------------- ------------- ------------- ------------- ------------- -------------
(in thousands, except earnings per share and the number of shares)
Earnings
Earnings
attributable to
the equity
holders of the
parent...........
.................
.................
.................
.... $ 8,811 $ 8,811 $ 3,776 $ 3,776 $ 27,107 $ 27,107
--- ------------ --- -------- --------- --------- ------------- -------------
Potential dilutive
effect related to
share based
compensation
scheme in
subsidiary
undertaking......
.................
.................
................ - (61) - (74) - (23)
----------------- ------------- ------------- ------------- ------------- -------------
Adjusted earnings
attributable to
equity holders of
the
parent...........
.................
............ $ 8,811 $ 8,750 $ 3,776 $ 3,702 $ 27,107 27,084
=== ============ === ======== ========= ========= ============= =============
Number of shares
Weighted average
number of
shares...........
....... 119,095,761 119,095,761 118,316,874 118,316,874 118,316,874 118,316,874
Potential or
dilutive effect
related to share
based
compensation
scheme...........
................ - 41,696 - 26,131 - 52,371
----------------- ------------- ------------- ------------- ------------- -------------
Adjusted weighted
average number of
shares. 119,095,761 119,137,457 118,316,874 118,343,005 118,316,874 118,369,245
================= ============= ============= ============= ============= =============
Earnings per share
Earnings
attributable to
the equity
holders of the
parent per share
(cents)..........
.................
......... 7.40 7.34 3.19 3.13 22.9 22.9
================= ============= ============= ============= ============= =============
8. INTANGIBLE CONTENT ASSETS
Gross
Content Accumulated Content
Assets Amortisation Assets
--------- --------------- ---------
(in thousands)
As at September 30, 2013
Film and content
rights.................................................................
.... $ 819,654 $ (453,523) $ 366,131
Content
advances...............................................................
............... 165,334 - 165,334
Film
productions............................................................
.................... 388 - 388
--------- --------------- ---------
Non-Current Content
assets........................................................... $ 985,376 $ (453,523) $ 531,853
-------- ----------- --------
As at March 31,2013
Film and content
rights.................................................................
.... $ 766,387 $ (396,034) $ 370,353
Content
advances...............................................................
............... 163,781 - 163,781
Film
productions............................................................
.................... 1,170 - 1,170
--------- --------------- ---------
Non-Current Content
assets............................................................ $ 931,338 $ (396,034) $ 535,304
======== =========== ========
Changes in the main content assets are as follows:
Six
months ended Year ended
September 30 March 31
2013 2012
--------------- ------------
(in thousands)
Film productions
Opening
balance............................................................................
...................................... $ 1,170 $ -
Transfer to film and content
rights.............................................................................
....... (625) 1,170
Exchange
difference.........................................................................
.................................... (157) -
--------------- ------------
Closing
balance............................................................................
........................................ $ 388 $ 1,170
=========== ========
Content advances
Opening
balance............................................................................
...................................... $ 163,781 $ 162,377
Additions..........................................................................
..................................................... 67,676 174,567
Exchange
difference.........................................................................
.................................... (13,482) (5,948)
Transfer to film and content
rights.............................................................................
....... (52,641) (167,215)
--------------- ------------
Closing
balance............................................................................
........................................ $ 165,334 $ 163,781
=========== ========
Film and content rights
Opening
balance............................................................................
...................................... $ 370,353 310,715
Amortisation.......................................................................
.................................................. (43,449) (101,955)
Adjustments........................................................................
.................................................. - (771)
Exchange
difference.........................................................................
.................................... (14,039) (4,851)
Transfer from other content
assets.............................................................................
...... 53,266 167,215
--------------- ------------
Closing
balance............................................................................
........................................ $ 366,131 $ 370,353
=========== ========
9. TRADE AND OTHER RECEIVABLES
As at
---------------------------
September 30 March 31
2013 2013
-------------- ----------
(in thousands)
Trade accounts
receivables........................................................................
.................. $ 86,759 $ 77,104
Trade accounts receivables
reserve............................................................................ (851) (759)
-------------- ----------
Trade accounts receivables,
net................................................................................
.. $ 85,908 $ 76,345
Other
receivables........................................................................
.................................... 10,817 11,089
Prepaid
charges............................................................................
................................... 7,850 5,893
-------------- ----------
Trade and other
receivables........................................................................
................. $ 104,575 $ 93,327
========== ======
10. TRADE AND OTHER PAYABLES
As at
---------------------------
September 30 March 31
2013 2012
-------------- ----------
(in thousands)
Trade accounts
payable............................................................................
.................... $ 18,485 $ 13,694
Accruals and other
payables...........................................................................
............. 7,417 12,964
Value added taxes & other taxes
payable................................................................... 3,899 2,321
-------------- ----------
$ 29,801 $ 28,979
========== ======
11. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and balance
with banks and investments in money market investments, classified
as held to maturity investments.
12. BORROWINGS
Analysis of long-term borrowings
Nominal As at
-------------------------
Interest Rate September 30 March 31
% Maturity 2013 2013
------------------------------- -------- -------------- --------
(in thousands)
Asset backed borrowings
Term
loan..............................
................... LIBOR+5.5% 2014-15 $ - $ 928
Term
loan..............................
................... LIBOR+8.5% 2014-15 - 1,055
Term
Loan..............................
.................. BR+5.5% 2014-15 957 633
Vehicle
Loans.............................
............. 10-15% 2014-15 52 91
Term
loan..............................
................... BR+2.75% 2016-17 15,961 18,421
Term
Loan..............................
.................. BR+2.75% 2017-18 4,869 6,401
-------------- --------
$ 21,839 $ 27,529
========== =======
Unsecured borrowings
Other
borrowings........................
........... 10.5% 2021-22 9,757 10,257
Revolving
facility.......................... LIBOR +1.9%-2.9% + Mandatory
......... Cost 2016-17 167,500 150,000
-------------- --------
$ 177,257 $160,257
========== =======
Nominal value of borrowings 199,096 187,786
Cumulative effect of unamortized
costs.............................
........................ (2,499) (2,767)
Installments due within one
year......... (20,238) (19,121)
============== ========
Long-term borrowings - at amortized
cost..............................
......................... $ 176,359 $165,898
========== =======
Base rate ("BR") is the Indian equivalent to LIBOR. Asset backed
borrowings are secured by fixed and floating charges over certain
group assets.
On July 31, 2013, HSBC acceded as a lender to the revolving
credit facility. HSBC's participation in the facility is $25.0
million. This increased the total facility amount to $167.5
million, following the amortization of $7.5 million which occurred
in July 2013.
Analysis of short-term borrowings
As at
------------------------------
Nominal interest September 30 March 31
rate (%) 2013 2013
------------------ -------------- -------------
(in thousands)
Asset backed borrowings
Export credit and
overdraft.............................................
................. BR+0.75-5.25% $ 23,451 $ 25,600
Export credit and
overdraft.............................................
................. LIBOR+3.5% 19,722 13,997
Short Term
loan..................................................
............................... BR+1.90-2.50% 13,204 4,605
-------------- -------------
$ 56,377 $ 44,202
Unsecured Borrowings
Commercial Paper 11.00% -12.00% 4,788 16,579
Installments due within one year on long-term borrowings....... 20,238 19,121
-------------- -------------
Short-term borrowings- at amortized cost................................... $ 81,403 $ 79,902
========== =========
Fair value of the long term borrowing as at September 30, 2013
is $ 186,366,000 (2013:$ $ 176,093,000). Carrying amount of
short-term borrowings approximates fair value. Fair values of
long-term financial liabilities have been determined by calculating
their present values at the reporting date, using fixed effective
market interest rates available to the Group.
13. FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
Disclosures of fair value measurements are grouped into the
following levels:
-- Level 1 fair value measurements derived from unadjusted
quoted prices in active markets for identical assets or
liabilities;
-- Level 2 fair value measurements derived from inputs, other
than quoted prices included within Level 1, that are observable for
the asset or liability, either directly (as prices) or indirectly
(derived from prices); and
-- Level 3 fair value measurements derived from valuation
techniques that include inputs for the asset or liability that are
not based on observable market data.
As at
September 30
2013
Recurring fair value measurements Level 2
--------------------------------------------------------------------------------------------- ----------------
(in thousands)
Liabilities - derivative financial
instruments.....................................................................................
....... $ 11,657
------------
$ 11,657
============
There were no identified Level 1 financial instruments at
September 30, 2013 and no transfers between Level 1 and 2 during
the six months ended September 30, 2013.
Financial assets and liabilities subject to offsetting,
enforceable master netting arrangements or similar arrangements as
at September 30, 2013 are as follows:
Gross amount of recognized
financial liabilities offset
in the Net amounts financial assets
Description of type of Gross amount of statement of financial presented in the statement
financial assets recognized financialassets position of financial position
---------------------- ----------------------------- ----------------------------- --------------------------------
Derivative
assets...............
............... $ (2,513) $ (2,513) -
Total................
.....................
............... $ (2,513) $ (2,513) -
Gross amount of recognized
financial assets offset in
Description of type of Gross amount of the Net amounts financial
financial recognized financial statement of financial liabilities presented in the
Liabilities liabilities position statement of financial position
---------------------- ----------------------------- ----------------------------- --------------------------------
Derivative
liabilities..........
................ $ 14,170 $ (2,513) $ 11,657
Total................
.....................
............... $ 14,170 $ (2,513) $ 11,657
Fair value
As at
-----------------------
September 30 March 31
Derivative Instruments 2013 2013
------------------------------------------------------------------------------------ ------------ --------
(in thousands)
2012 Interest rate
Cap....................................................................................
................ (2,513) (2,200)
2012 Interest rate
Floor..................................................................................
................ 7,085 9,430
2012 Interest rate
Collar.................................................................................
................ 7,085 9,430
------------ --------
Net Fair
Value..................................................................................
................................ 11,657 16,660
------------ --------
The carrying amount of the financial assets and liabilities is
considered a reasonable approximation of the fair value:
-- Trade and other receivables excluding prepaid charges
-- Cash and bank balances
-- Trade Payables excluding value added tax and other tax payables
14. 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:
As at
-------------------------------
September 30 September 30
2013 2012
-------------- --------------
(in thousands)
JSOP...........................................................................
..................................................................... $ 937 $ 562
Staff share grant 5,477 -
IPO India
Plan...........................................................................
..................................................... 255 276
-------------- --------------
$ 6,669 $ 838
========== === =========
This charge has been included in administrative costs in the
Income statement.
The Staff grant cost of $5,477,000 represents the cost of shares
granted to employees less any amounts paid in respect of the shares
issued on August 8, 2013 and September 18, 2013. Shares issued for
employee bonus/remuneration and contractual arrangements issued at
$10.83 a share based on the mid-market price on August 8, 2013 and
shares issued for employee bonus/remuneration and contractual
arrangements issued at $12.06 a share based on the mid-market price
on September 18, 2013. Refer to note16 for details of the share
issues. The shares issued on September 18, 2013 are subject to
certain performance conditions and the fair value will be expensed
through the income statement over the next three years.
15. CONTRACTUAL OBLIGATIONS AND COMMITMENTS
Total 1 Year 2 to 5 Years
-------- -------- --------------
(in thousands)
As at September 30,
2013.............................................................. $225,950 $108,209 $ 117,741
======= ======= ==========
As at March 31,
2013......................................................................... $235,935 $ 92,773 $ 143,162
======= ======= ==========
The Group also has certain contractual arrangements in relation
to certain contractual content commitments that would require the
Group to make payments or provide funding if certain circumstances
occur ("contingent guarantees"). The Group expects that these
contingent guarantees totaling at September 30, 2013 $ 83,610,930
(March 31, 2013: $88,276,000) which are included within the
contracted content commitments above, will fall due within the
timeframes above.
16. ISSUED SHARE CAPITAL
Number of
Shares GBP
----------- --------------
(in thousands)
Authorized
200,000,000 ordinary shares of 10p each ("Ordinary Shares") at September
30, 2013 and March,
2013............................................................................................... 200,000,000 20,000
=========== ==============
Number of
Shares USD
----------- --------------
(in thousands)
Allotted, called up and fully paid
As at March 31, 2012.................................................................. 118,316,874 $ 21,687
Issue of shares on April 24, 2012 6,000,943 966
As at March 31, 2013
.................................................................................................. 124,317,367 22,653
Issue of shares on August 8, 2013 1,431,000 221
Issue of shares on September 18, 2013 5,029,935 800
As at September 30, 2013
.......................................................................................... 130,778,302 $ 23,674
=========== ==============
This information is provided by RNS
The company news service from the London Stock Exchange
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