Press



Eros International Plc Trading Statement: Pre-Close Update

15/04/2008

Eros International Plc (“Eros”, “Group” or “Company”), the AIM listed leading film studio in the Indian media and entertainment sector, today issues the following trading update prior to entering its close period for the full year ended 31st March 2008.

The Company is pleased to report a positive trading outlook and confirms that it is on track to achieve full year performance in line with its expectations for the year ended 31st March 2008.

The Company continued to record a strong growth in revenues from the Group’s core activities of cinema distribution, television syndication and digital distribution and has also seen early revenues from its Tamil subsidiary Ayngaran, which it acquired during the year.

Since admission to AIM in July 2006, the Company has taken a lead in the consolidation of the fast growing, but fragmented $10 billion Indian entertainment sector by:

  • signing long term deals with talent, through content tie ups with productions, co-productions, output deals and acquisitions.
  • expanding its extensive global distribution network particularly within India and other emerging markets.
  • pioneering digital new media opportunities with leading partners around the world.
  • continuing to monetise its valuable library of over 1,900 films through syndication to television channels along with its slate of over 30 new films released on average in a year.

Highlights for the year ended 31st March 2008 include:

About Eros International plc

1. Strong global cinema releases

  • Om Shanti Om took the number one international box office slot (Nielsen EDI) and the highest first week box office in India ever in its week of release before going on to be the highest grossing Hindi film to date.
  • During the year Eros released 18 films theatrically with 16 being released globally. Eros films claimed five of the top ten spots in 2007 with Partner and Heyy Babyy being the other notable performers in the financial year.

2. Television syndication

  • Against a backdrop of the rapidly growing $6 billion Indian television sector and regulatory reforms that have further attracted giants like Reliance, Viacom, Inx, NDTV-NBC, UTV-Disney to join the likes of established players like Zee, Sony, Star and Sahara, the Indian television sector is going through an intensely competitive phase which is further driving the demand for content.
  • During the year the Company concluded a series of television syndication deals of a selection of its catalogue as well as new films with various networks in India and around the world including Sahara, Sony and ViacomTV18. The recently announced deals allowed the Company to implement a new syndication model where the limited telecasts are shared on a non-exclusive basis between the various channels for a limited period and the copyright is retained by Eros to exploit again after the limited license period.

3. Digital Distribution

  • The Company continued to grow its existing new media relationships, music, home entertainment and mobile revenues and signed further new media distribution deals with leading players around the world such as Amazon, Walmart, Mauritius Telecom, SingNet, RTM Malaysia and Aksh Optifibre.
  • This year not only saw an overall growth in digital revenues but also saw a large part of that growth come from India. The Indian market is rapidly waking up to mobile, IPTV and other digital opportunities driven by television, digitisation of cable homes and the telecommunication boom.

4. Content and Talent tie-ups

  • The Company continued to secure a strong content pipeline by signing over 65 projects through a combination of co-production deals and talent tie ups. This is equivalent to a two year pipeline of releases. As previously announced this list includes some of the best names in the industry.

5. Emerging Markets

  • The emerging markets of South East Asia, Europe and the Middle East continue to grow.
  • The Company further strengthened its German distribution by releasing the German dubbed version of Om Shanti Om for the first time theatrically across 35 screens before it goes on to German DVD and Free Television. The film had a special opening at the Berlin Film Festival, which demonstrates the increasing popularity of Indian films in non-Hindi as well as non-English speaking markets.

6. Ayngaran

  • In October 2007 the Company completed the acquisition of a 51% interest in Ayngaran who are the leading players in Tamil film content and distribution with a twenty year old track record and a catalogue of over 600 films. Eros’ investment is intended to accelerate Ayngaran’s growth and consolidation of the Tamil film market. This is similar to what Eros is doing in the Hindi film sector and will shape Ayngaran as a global player in Tamil film production and distribution. Ayngaran has had a successful half year of trading under Eros with blockbuster films such as Sivaji, Billa, Azahia Tamil Magan, Parivom Santhipom and Vel.

7. EyeQube

  • The Company created EyeQube, a state-of-the-art Visual effects studio in Mumbai in collaboration with internationally renowned visual effects expert Charles Darby. EyeQube will employ 300 people to produce top-end visual effects work in the Indian industry and internationally. The company has already commenced work on Eros International's much awaited films Aladin and Drona and has several other films in the pipeline. EyeQube expects to be in full production within 18 months.
  • Charles Darby is one of the pioneers of digital matte paintings and has been associated with more than 45 films in the last 13 years. Darby's work includes Academy and BAFTA award-winning work on films such as 'Titanic,' 'The Matrix', 'Crouching Tiger Hidden Dragon', 'The Fifth Element' and 'Minority Report'. His most recent work includes 'Girl with a Pearl Earring', 'Harry Potter and the Prisoner of Azkaban' and 'I Robot'. He also won an Emmy for the TV series ‘Rome’.

8. Board and Management

  • Naresh Chandra joined the Board as a Senior Independent Director. He has led a distinguished political career spanning over four decades including as Cabinet Secretary of the Government of India, Senior Adviser to the Prime Minister of India, Ambassador of India to the United States and Chairman of the advisory board of Coca-Cola India.
  • To support the growth within India and internationally, the Company recruited various executives in key management positions in India, UK and USA.

Outlook

The Company has built on its competitive advantage as a global player and successfully carried out the initial phase of content consolidation. Eros has firmly emerged as one of India’s leading integrated studios, controlling production and distribution.

The Company will continue to focus on its strategic priorities of securing content and distribution of new films as well as monetisation of its catalogue. The Company anticipates further content deals including expanding beyond Hindi and Tamil to other languages and intends to make select acquisitions during the year. The announcement yesterday of the acquisition of the minority interest in the B4U Movies and Music channels signals the Company’s intent to tap into the broader media and entertainment opportunity within India. The Company’s growth and expansion plans will be funded by the Company’s internal cash flow as well as with the $100 million five year syndicated financing facility from Citigroup Global Markets Limited.

Kishore Lulla, Chairman and CEO, Eros International, said:

“We have successfully carried out the initial phase of consolidation to emerge as an integrated studio controlling production and distribution. The business is performing well and we are confident of meeting full year targets. 2008-09 should continue to be a year of growth for Eros as we leverage our competitive advantage and benefit from the increasing revenues from box office, television and new media.”

ENQUIRIES:

Eros +44 (0)20 8963 8400
Kishore Lulla – Chairman & CEO
Jyoti Deshpande – COO & Commercial Director
Andrew Heffernan – CFO
Brunswick +44 (0)20 7404 5959
Jonathan Glass
Aideen Lee
Evolution Securities Limited +44 (0) 207 071 4300
Tom Price
Jeremy Ellis
Chris Clarke

About Eros International plc

Eros International plc is the leading global player in the rapidly growing Indian media and entertainment sector. Eros produces, acquires and distributes films globally across all platforms including cinemas, home entertainment, television and new media.

Established in 1977, Eros International has over three decades of market leadership in creating a global platform for Indian cinema. The company operates in over 50 countries with worldwide offices throughout India, the United Kingdom, USA, UAE, Singapore, Australia, Fiji and the Isle of Man. Eros releases over 30 new films globally each year in Hindi, Tamil and English and continues to build upon its unrivaled library of over 1,900 titles.

Global Distribution, Motion Pictures, Music, Home Entertainment, Television, New Media and Animation are the primary Strategic Business Units of Eros.

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