Eros International (EROS) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $1.40 million, or $ 6.40 a share in the quarter, against a net profit of $11.02 million, or $12.30 a share in the last year period. Revenue during the quarter dropped 27.24 percent to $71.88 million from $98.79 million in the previous year period. Gross margin for the quarter contracted 1385 basis points over the previous year period to 31.92 percent. Total expenses were 92.36 percent of quarterly revenues, up from 73.53 percent for the same period last year. That has resulted in a contraction of 1883 basis points in operating margin to 7.64 percent.
Operating income for the quarter was $5.49 million, compared with $26.15 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $13.69 million compared with $36.04 million in the prior year period. At the same time, adjusted EBITDA margin contracted 1743 basis points in the quarter to 19.05 percent from 36.48 percent in the last year period.
Jyoti Deshpande, Eros Managing Director and Group chief executive officer, said: "I am pleased to report that our vision to transform Eros into a leading digital company with the power of our brand, content and distribution is gaining momentum with the growing success of Eros Now, our OTT platform which crossed 55 million users and 1.32 million paying subscribers as of September 30, 2016. Our understanding of the Indian market and our local stronghold is a key advantage to withstand disruption from international players.
Operating cash flow drops significantlyEros International has generated cash of $51.04 million from operating activities during the first half, down 44.05 percent or $40.19 million, when compared with the last year period. The company has spent $57.57 million cash to meet investing activities during the first six months as against cash outgo of $104.34 million in the last year period. It has incurred net capital expenditure of $58.20 million on net basis during the first six months, down 44.34 percent or $46.36 million from year ago period.
The company has spent $8.08 million cash to carry out financing activities during the first six months as against cash inflow of $10.19 million in the last year period.
Cash and cash equivalents stood at $167.26 million as on Sep. 30, 2016, up 11.17 percent or $16.81 million from $150.45 million on Sep. 30, 2015.
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