MD & A

Operation results of the Company and subsidiaries

The Group generated profit in 2019 in amount of 15.82 and generated loss in 2018 in amount of THB 24.99 million.

Total revenues were recorded at Baht 457.92 million, main revenue in amount of Baht 1.30 million from management service fee, Baht 152.84 million film rights distribution, Baht 231.23 million from film production, Baht 62.25 million from advertising and Baht 7.68 million from selling goods, representing 0.28%, 33.38%, 50.49%, 13.60% and 1.68% of total revenues respectively. Compared with 2018, the total revenues increased about 36.56%.

Total expenses became higher about 17.97% from Baht 374.77 million in 20187 to Baht 442.10 million in 2019 because costs of production and services increased from Baht 173.17 million to Bath 252.76 million or 45.96% and selling and administrative expenses decreased from Baht 201.60 million to Baht 189.34 million or 6.08%.

Revenues

The Group’s total revenues in 2019 increased from 2018 about Baht 121.90 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
2019 2018 Amount % 2019 2018
Management fee 1.30 0.88 0.42 47.73 0.28% 0.25%
Film rights 152.84 92.99 59.95 64.54 33.38% 26.56%
Film production 231.23 150.75 80.48 53.39 50.49% 43.10%
Advertising 62.25 70.82 (8.57) (12.10) 13.60% 20.25%
Goods 7.68 18.06 (10.38) (57.48) 1.68% 5.16%
Total 455.30 333.40 121.90 36.56 99.43% 95.32%
Other revenue 2.62 16.38 (13.76) (84.00) 0.57% 4.68%
Total Revenue 457.92 349.78 108.14 30.92 100.00% 100.00%

Film rights Distribution has increased in revenues by Baht 59.95 million or 65.54% because of more movies released in theaters in 2019 than 2018 .

Film production business the revenues increased by Baht 80.48 million or 53.39% from 2018 because the year 2019, there were more released films that affect revenue higher than 2018.

Advertising revenues in 2019 recorded decrease of Baht 8.57 million or 12.10% because in the year 2019, we sold less media in Thai and international movies.

Sales goods has decreased in revenue by Baht 10.38 million or 57.48% because in 2019 the subsidiary sold less goods through online channels.

Costs of Production and Services and Gross Profit Margin

The Group’s costs of production and services increased from Baht 173.17 million to Bath 252.76 million or Baht 79.59 million or 45.96% because cost of films’ rights distribution has increased which affected higher revenue in its sector.

Selling and Administrative Expenses

Selling and administrative expenses became lower by Baht 12.26 million or 6.08% from Baht 201.60 million in 2018 to Baht 189.34 million in 2019 caused by effectiveness to control cost and expenses.

Financial Result of the Company and Group

Asset

As of December 31, 2019, the Group had total assets of Baht 746.07 million decreasing from December 31, 2018 of Baht 76.52 million or about 9.30%. The assets were composed of the following items:

(Unit: Million Baht)
Assets As of December 31 Increase (decrease) % of total asset
2019 2018 Amount % 2019 2018
Cash and cash equivalent 97.76 42.45 55.31 130.29 13.10% 5.16%
Accounts receivable / other receivables- net 190.84 255.50 (64.66) (25.31) 25.58% 31.06%
Short term loan to related company - 1.31 (1.31) (100.00) 0.00% 0.16%
Inventory-net 0.15 4.45 (4.30) (96.63) 0.02% 0.54%
Film on Production 115.32 192.19 (76.87) (40.00) 15.46% 23.36%
Other current assets 31.81 23.50 8.31 35.36 4.26% 2.86%
Investments in associated company 41.03 10.46 30.57 292.26 5.50% 1.27%
Investments in joint venture-net 64.16 71.94 (7.78) (10.81) 8.60% 8.75%
Building and equipment - net 2.19 4.39 (2.20) (50.11) 0.29% 0.53%
Goodwill - net 139.14 139.14 - - 18.65% 16.91%
Computer program-net 0.50 0.71 (0.21) (29.58) 0.07% 0.09%
Film rights - net 39.43 57.39 (17.96) (31.29) 5.29% 6.98%
Other non - current assets 23.74 19.16 4.58 23.90 3.18% 2.33%
Total Asset 746.07 822.59 (76.52) (9.30) 100.00% 100.00%

Cash and cash equivalents increased from December 31, 2018 in sum of Baht 55.31 million or 130.29% because the company was been paid from Trade accounts receivable and got revenue from operation.

Trade Accounts receivable and other receivables - net decreased Baht 64.66 million or 25.31% from 2018 because there were movies releasing in the quarter 4/2018 and made payment in 2019.

Films on production decreased in amount of Baht 76.87 million or 40.00% from December 31, 2018. the Company’s plan effectively to continuous releasing movies in the theater and produced more movies also.

Invesments in associated companies increased in amount of Baht 30.57 million or 292.26% from December 31, 2018 because of the subsidiaries more invested with the partners to produce Thai Films.

Investments in joint venture-net decreased from December 31, 2018 by Baht 7.78 million or 10.81% mainly from more recording impairment of investment.

Liabilities and Equity of Shareholders

(Unit : Million Baht)
Liabilities and Equity of Shareholders As of December 31 Increase (decrease) % of liabilities per Equity of Shareholders
2019 2018 Amount % 2019 2018
Short-Term Loan and OD from Financial Institutes 22.00 19.99 2.01 10.06 2.95% 2.43%
Accounts Payable and other payable 175.40 267.93 (92.53) (34.54) 23.51% 32.57%
Liabilities from contract 17.80 15.99 1.81 11.32 2.39% 1.94%
Other Current Liabilities 8.57 9.66 (1.09) (11.28) 1.15% 1.17%
Other Non-Current Liabilities 4.38 5.42 (1.04) (19.19) 0.59% 0.66%
Total Liabilities 228.15 318.99 (90.84) (28.48) 30.58% 38.78%
Equity of Shareholders 517.92 503.60 14.32 2.84 69.42% 61.22%
Total Liabilities and Equity of Shareholders 746.07 822.59 (76.52) (9.30) 100.00% 100.00%

Overdrafts and short-term loans from financial institutions , the outstanding balance as of December 31, 2019 increased from 2018 by Baht 2.01 million or 10.06% due in 2019 the Company made loan with financial banking for working capital.

Trade Accounts payable and other payable decreased from December 31, 2018 by Baht 92.53 million or 34.54% from decreasing of the payment of films rights distribution business and advertising to promote Thai films which normal transaction of the business.

Shareholders’ equity as of year-end 2019 increased in sum of Baht 14.32 million or 2.84% resulting from revenues of the company generated profit in 2019.

Analysis of Financial Ratios:

December 31, 2019 December 31, 2018 December 31, 2566
Current Ratio (times) 1.95 1.66 2.87
Receivable Turnover (times) 2.46 2.24 2.25
Average Collection Period (days) 148 163 162
Total Assets Turnover (times) 0.61 0.41 0.53
Total Debt to Equity Ratio (times) 0.44 0.63 0.29

Remark; Receivable Turnover and Average Collection Period; The Group normally grants a credit term of around 90-180 days.