MD & A

Operation results of the Company and subsidiaries

In early 2020, the coronavirus outbreak (“COVID-19”) , which had a negative impact on the company's performance for the year 2020, especially the performance of the film production and films rights distribution businesses.

Due to measures to prevent the outbreak of COVID-19 occurring in many areas. This resulted in the control and limitation of filming and screenings. Thus resulting in the postponement of production and selling movies during the 1st to 2nd quarter of 2020. However, theaters will return to full opening in the third quarter of 2020 but Moviegoers are also concerned about seeing movies in theaters therefore, the revenue from the production and films rights distribution decreased compared to the previous year. Fortunately, the Company still earns revenue from films that received good reviews, including Thai films “Riam Angle Fighting” and Asian animated films “The Demon Slayer”. In addition, the Company pays special attention to the COVID-19 outbreak and assesses closely the impact on its operations and the operating results of the Group in 2020 are as follows:

The Group’s total revenues in 2020 decreased from 2019 about Baht 167.82 million or 36.56% which could be broken down by line of business in the below:

(Unit: Million Baht)
Business Line Amount Increase/(Decrease) Ratio : Total Revenue
2020 2019 Amount % 2020 2019
Film production 172.57 231.23 (58.66) (25.37) 59.49 50.49
Film rights 107.15 152.84 (45.69) (29.89) 36.94 33.38
Advertising 5.72 62.25 (56.53) (90.81) 1.97 13.60
Management fee 1.54 1.30 0.24 18.46 0.53 0.28
Goods 0.07 7.68 (7.61) (99.09) 0.02 1.68
Main revenue 287.05 455.30 (168.25) (36.95) 98.95 99.43
Other revenue 3.05 2.62 0.43 16.41 1.05 0.57
Total Revenue 290.10 457.92 (167.82) (36.65) 100.00 100.00

Film production business the revenues decreased by Baht 58.66 million or 25.37% from 2019. Main revenue generated from Riam Angle Fighting which was the highest box office movie in 2020.

Film rights Distribution has decreased in revenues by Baht 45.69 million or 29.89%. Main revenue generated from Demon Slayer the Movie which made Baht 49 million and the revenue from Free TV in sum of Baht 12 million.

Advertising revenues in 2020 recorded decrease of Baht 56.63 million or 90.81% because theatre was ceased temporarily that also affect the numbers of movie exploited in theatre.

Sales goods has decreased in revenue by Baht 7.61 million or 99.09% because in 2020 the Company has never sold goods through online channels anymore.

Costs of Production and Services and Gross Profit Margin

The Group’s costs of production and services decreased Bath 84.45 million or 33.41% because cost of films’ rights distribution has decreased which affected less revenue in its sector.

Selling and Administrative Expenses

Selling and administrative expenses became higher by Baht 2.94 million or 2.01% from credit recognition of M Talent Co.,Ltd. in sum of Baht 37.15 million according to TFRS 9 and impairment of investment in associated company in sum of Baht 7.30 million. However, the selling expense of the Company was less than 2019 in sum of Baht 18.02 million because of less movies and management expense was less than 2019 in sum of Baht 23.48 million because of effective cost management in Covid-19 outbreak period.

Financial Result of the Company and Group

Asset

As of December 31, 2020, the Group had total assets of Baht 750.43 million increasing from December 31, 2019 of Baht 4.36 million or about 0.58%. The assets were composed of the following items:

Assets As of December 31 Increase (decrease) % of total asset
2020 2019 Amount % 2020 2019
Cash and cash equivalent 94.72 97.76 (3.04) (3.11) 12.62 13.10
Accounts receivable / other receivables- net 203.01 190.84 12.17 6.38 27.05 25.58
Short term loan to related company - - - - - -
Inventory-net - 0.15 (0.15) (100.00) - 0.02
Film on Production 107.21 115.32 (8.11) (7.03) 14.29 15.46
Other current assets 34.51 31.81 2.70 8.49 4.60 4.26
Investments in associated company 44.56 41.03 3.53 8.60 5.94 5.50
Investments in joint venture-net 46.35 64.16 (17.81) (27.76) 6.18 8.60
Building and equipment - net 13.47 2.19 11.28 515.07 1.79 0.29
Right-of-use assets 11.07 - 11.07 100.00 1.48 -
Goodwill - net 139.14 139.14 - - 18.54 18.65
Computer program-net 0.52 0.50 0.02 4.00 0.07 0.07
Film rights - net 41.93 39.43 2.50 6.34 5.59 5.29
Other non - current assets 13.94 23.74 (9.80) (41.28) 1.86 3.18
Total Asset 750.43 746.07 4.36 0.58 100.00 100.00

Trade Accounts receivable and other receivables – net increased Baht 12.17 million or 6.38% from 2019 because there were movies releasing in the quarter 4/2019 and made payment in 2020.

Investment in associated companies decreased in amount of Baht 17.81 million or 27.76% from December 31, 2019 because of additional recorded of investment impairment of Transformation Films Co.,Ltd. in sum of Baht 7.30 million and recorded loss of investment in associated companies in sum of Baht10.52 million.

Building and equipment - net increased from December 31, 2019 by Baht 11.28 million or 515.07% because of office renovation for promote work efficiency and corporate image.

Right-of-use assets increased from December 31, 2019 by Baht 11.07 million or 100.00% from the record of asset recognition of lease agreement of head office in accordance with TFRS 16 accounting standards regarding lease agreements.

Liabilities and Equity of Shareholders

Liabilities and Equity of Shareholders As of December 31 Increase (decrease) % of liabilities per Equity of Shareholders
2020 2019 Amount % 2020 2019
Short-Term Loan and OD from Financial Institutes 35.00 22.00 13.00 59.09 4.66 2.95
Accounts Payable and other payable 202.45 175.40 27.05 15.42 26.98 23.51
Liabilities from contract 36.82 17.80 19.02 106.85 4.91 2.39
Other Current Liabilities 8.30 8.57 (0.27) (3.15) 1.11 1.15
Other Non-Current Liabilities 14.27 4.38 9.89 225.80 1.90 0.59
Total Liabilities 296.84 228.15 68.69 30.11 39.56 30.58
Equity of Shareholders 453.59 517.92 (64.33) (12.42) 60.44 69.42
Total Liabilities and Equity of Shareholders 750.43 746.07 4.36 0.58 100.00 100.00

Overdrafts and short-term loans from financial institutions the outstanding balance as of December 31, 2020 increased from 2019 by Baht 13.00 million or 59.09 due to in the year 2020 the Company has borrowing from financial institutions more. To maintain liquidity of the group companies as working capital

Trade Accounts payable and other payable increased from December 31, 2019 by Baht 27.05 million or 15.42% from increasing of trade payables, film rights distribution business and films production business.

Liabilities from contract increased from December 31, 2019 by Baht 19.02 million or 106.85% from the obligation to perform the service contract to the customer

Other Non-Current Liabilities increased from December 31, 2019 by Baht 9.89 million or 225.80% because the Company had more liabilities under the lease agreement due more than 1 year from the record liabilities in accordance with TFRS 16 accounting standards regarding lease agreements.

Shareholders’ equity as of year-end 2020 decreased in sum of Baht 64.33 million or 12.42% because the performance of the Company record loss in the event of the COVID-19 virus outbreak

Analysis of Financial Ratios:

December 31, 2020 December 31, 2019 December 31, 2018
Current Ratio (times) 1.56 1.95 1.66
Receivable Turnover (times) 1.46 2.46 2.24
Average Collection Period (days) 250 148 163
Total Assets Turnover (times) 0.38 0.61 0.41
Total Debt to Equity Ratio (times) 0.65 0.44 0.63

Measurement ratio of operational efficiency

Working capital ratio 1.56 times decreased from the previous year due to trade payable from the popular movie in the 4th quarter. Receivable turnover rate 1.46 times decreased from the previous year due to the consideration of impairment of trade receivables in accordance with TFRS 9 accounting standard for the measurement of expected credit losses. Average collection time equal to 250 days increased from the previous year due to the situation of the spread of the COVID-19 virus caused the debtor to request an extension of the repayment period.