Eros International eyes broadcast sector; to list Indian subsidiary

Mumbai: AIM listed Eros International, which exercised its option on the B4U shares and now owns 24 per cent of the worldwide movies and music network of B4U channels, plans to list its Indian subsidiary company Eros Multimedia on the bourses. The Indian listing is being looked at for accelerating its expansion opportunities within the country.

The company also intends to expand into the television broadcasting industry over the next 12 to 18 months through a combination of acquisitions, joint ventures or alliances.

Eros’ growth and expansion plans will be funded by its internal cash flows as well as with the $100 million five year syndicated financing facility signed with Citigroup this year.

The company posted a profit of $ 63 million in 2008, which was up 57.9 per cent as compared to $39.9 million in to 2007.

The company’s profit before tax stood at $ 45.5 million in 2008, up 47.2 per cent as compared to $ 30.9 million in 2007. The company’s turnover was up 70.2 per cent to $ 113.0 million this year vis-à-vis $ 66.4 million in 2007.

Eros released 18 films in 2008 out of which 16 were global releases including Partner and Heyy Babyy being the other notable performers in the financial year apart from Om Shanti Om. The company reported strong performance due to the strength its portfolio, thus proving that it is not a ‘hit’ driven business.

Eros International’s worldwide theatrical revenues grew by 146.9 per cent to $52.1 million as opposed to $21.1 million in 2007.

On the television front, Eros’ revenues from TV syndication were up 56.3 per cent to $33 million (2007: $21.1 million). The company inked syndication deals with channels like Sony Entertainment Television, INX Network, Viacom Network and Sahara Television amongst others. These deals were based on a new syndication model where the limited telecasts are shared on a non-exclusive basis between various channels for a limited period. The copyright is retained by Eros to exploit again after the limited license period.

Revenues from New Media were up 16.9 per cent to $27.7 million as compared to $23.7 million in 2007. New deals were inked with Cablevision, Valuable Technology, Mauritius Telecom, SingNet, RTM Malaysia and Aksh Optifibre. Digital distribution deals were also concluded with Amazon and Walmart.

The company’s film library has grown to 1900 as a result of fresh acquisitions during the year. Eros has invested $200 million across 60 projects giving full visibility of release schedule till 2010. Additionally, the company’s catalogue generated revenues of over $23 million, which is a key competitive advantage for the company.

On the other hand, deals with Hollywood studios such as a co-production joint venture with Sony Pictures and a distribution joint venture for South Asia with Lionsgate were also announced.

Eros International chairman Kishore Lulla said, "Eros will pursue continued growth as well as maintain its lead in consolidating this lucrative yet fragmented sector, ensuring the Company maintains its market leadership through a combination of alliances, acquisitions and organic investment."

The company’s music label Eros Music also continued to grow as a division and released 11 titles in 2008 compared to seven in 2007, which were exploited across mobile platforms as sold as audio cassettes, CDs and digital downloadable files across platforms such as iTunes.

On the regional cinema front, Eros is gearing up to position its Tamil film company Ayngaran as a global player in Tamil film production and distribution. Ayngaran has had a successful half year of trading under Eros with films such as Sivaji – The Boss, Billa, Azahia Tamil Magan, Parivom Santhipom and Vel. Ayngaran has already secured over 30 projects for release over the next two years. Ayngaran also announced a co-production project with director Shankar starring Rajnikanth.

Eros also entered into the VFX space with EyeQube headed by visual effects expert Charles Darby. EyeQube currently employs over 130 people, which will soon increase to 300 producing top-end visual effects work in the Indian industry and internationally. The company has already commenced work on Eros’ projects such as Aladin and Drona amongst others.


Eros International’s revenues from India grew from $46.3 million to $81.1 million (up 75.2 per cent) over the last one year. This growth has been driven by economic and consumer changes within India driving cinema, television and home entertainment as well as an increase in the number of theatrical releases.

In North America revenues of $8 million represented like for like growth of 39.4 per cent over the $5.7 million achieved in the prior year. This growth reflects strong results from cinema and DVD releases together with full year contributions from the new media revenue streams opened up in the year ended 31 March 2007.

European revenues enjoyed a 104 per cent increase to $11.1 million compared to $5.4 million in the previous year. This was due to the emergence of Eastern Europe as a strong growth market, continued success in markets dubbed markets and again a strong theatrical release schedule.

In the rest of the world dubbed markets continued to perform well and the non resident Indian audiences, in the Gulf States, Australia and Africa amongst others, contributed to a 42.5 per cent rise in revenues to $12.7 million compared to $8.9 million in the previous year.

Eros secured content via production, co-production, new release films acquisition or catalogue acquisition. The company has invested $211 million in the last two years and has further content commitments of $351 million over the next three years.