India’s Eros International brushed aside recent short selling attacks by unveiling a strong first quarter for its financial year. Operating profit for the three months to end of June increased by 63% to $11.7 million, from $7.2 million in the prior year period.
The growth came despite a seasonal reduction in the number of film releases, at just five in the quarter. That caused revenues to drop by 14% to $60.8 million.
India’s distribution and film investment giant would like to be seen as one of the industry’s digital champions. It said that its Eros Now streaming service had increased its paying subscriber numbers by 28% from 2.9 million to 3.7 million. Total registered users hit 75 million.
In comments to analysts after the Friday announcement, CEO Jyoti Deshpande confirmed that 90% of paying subscriptions are from consumers in India. Average cost of the subscription is $5 per month.
She attributed the company’s robust quarterly numbers to a production strategy that is more in-house and less adventurous than in the past. “We continue to focus on sensibly budgeted films that are content driven and backed by pre-sales potential with lower reliance on box office success rather than big budget big star cast high profile films,” Deshpande said.
The company made little direct reference to the recent short selling attacks beyond noting that it had succeeded in having a New York court dismiss a class action against it. Earlier this week Eros itself launched legal actions against some of the fund groups that had sold its shares and published research suggesting major irregularities in its accounts. It finished the quarter with $115 of cash on its books.