Eros sees profit growth without major hits

Bollywood producer, distributor sees turnover up 39%

HONG KONG -- Eros International, the Bollywood producer and distributor, saw last year's profit grow by 7% in a year with fewer releases and without major hits.

Pre-tax profits in the year to end March 2009 reached $48.4 million compared with $45.5 million during the same period the previous year. Group turnover was up 39% at $156 million.

The company blamed its margin dilution on the weakness of the Indian Rupee against the dollar, delays to its releasing schedule and start-up costs in India as it expanded local distribution and special effects unit Eyeqube.

Eros gave global releases to only 24 films, compared with 52 the previous year and deferred big releases like "Kambakkth Ishq," "Love Aaj Kal" and "Aladin" till after settlement of the dispute over rental terms between producers and multiplex owners.

Theatrical revenues in India grew 4% in local currency terms, but global theatrical revenues fell to $46.3 million compared with $52.1 million.

Other sectors did better. Revenues from TV syndication grew 94% to $64 million (from $33 million), while digital distribution and new media revenues grew by 69% to equal theatrical at $46.2million ($27.7 million in 2008).

"The underlying business has produced a very robust performance," said Kishore Lulla, chairman and CEO. "The company will continue build its content portfolio and distribution network while focusing on cash conversion, effective management of costs and reducing net debt."

Lulla said that the outlook for the future looked good, with most of the next two year's productions already funded and Indian films benefiting from a "Slumdog Millionaire" effect. "On the back of the success of 'Slumdog Millionaire,' the company saw interest from new markets and new buyers in existing markets, said Lulla. European revenues more than doubled last year.

After three years of listing on the London Stock Exchange's second tier Alternative Investment Market the company is now looking to move up the main board. Additionally, it is exploring a stock listing in India.
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