MD & A

Operation results of the Company and subsidiaries

The Group generated loss in 2018 and 2017 in amount of THB 24.99 million and THB 163.27 million respectively.

Total revenues were recorded at Baht 349.78 million, main revenue in amount of Baht 0.88 million from management service fee, Baht 92.89 million film rights distribution, Baht 150.75 million from film production, Baht 18.06 million from selling goods, and Baht 70.82 million from advertising, representing 0.25%, 26.56%, 43.10%, 5.16% and 20.25% of total revenues respectively. Compared with 2017, the total revenues decreased about 8.30%.

Total expenses became lower about 29.15% from Baht 528.95 million in 2017 to Baht 374.77 million in 2018 because Costs of production and services decreased from Baht 228.52 million to Bath 173.17 million or 24.22% and selling and administrative expenses decreased from Baht 300.43 million to Baht 201.60 million or 32.90%.

Revenues

The Group’s total revenues in 2018 was Baht 333.40 million which decreased about Baht 30.19 million or 8.30% from the previous year, which could be broken down by line of business in the below:


Film rights Distribution has decreased in revenues by Baht 19.49 million or 17.34% because the movies released in theaters in 2018 were not blockbuster affecting to generate less revenue than 2017.

Film production business the revenues increased by Baht 1.94 million or 17.34% from 2017 because the year 2018, films generated more revenue than the films in 2017.

Sales goods has increased in revenue by Baht 4.71 million or 35.28% because in 2018 the subsidiary sold goods through more online channels.

Advertising revenues in 2018 recorded decrease of Baht 17.51 million or 19.82% because in the year 2018, we sold less media in Thai and international movies.

Costs of Production and Services and Gross Profit Margin

The Group’s costs of production and services decreased from Baht 228.52 million to Bath 173.17 million or Baht 55.35 million or 24.22% because cost of films’ rights distribution has decreased which affected to revenue in its sector.

Selling and Administrative Expenses

Selling and administrative expenses became lower by Baht 98.83 million or 32.90% from Baht 300.43 million in 2017 to Baht 201.60 million in 2018 caused by effectiveness to control cost and expenses.

Financial Result of the Company and Group

Asset

As of December 31, 2018, the Group had total assets of Baht 822.59 million increasing from December 31, 2017 of Baht 139.15 million or about 20.36%. The assets were composed of the following items:

(Unit: Million Baht)
Assets As of December 31 Increase (decrease) % of total asset
2018 2017 Amount % 2018 2017
Cash and cash equivalent 42.45 73.55 (31.10) (42.28) 5.16 10.76
Accounts receivable / other receivables- net 255.50 140.15 115.35 82.30 31.06 20.51
Short term loan to related company 1.31 5.00 (3.69) (73.80) 0.16 0.73
Inventory-net 4.45 2.58 1.87 72.48 0.45 0.83
Film on Production 192.19 178.36 13.83 7.75 23.36 26.10
Other current assets 23.50 28.47 (4.97) (17.46) 2.86 4.17
Investments in associated company 10.46 - 10.46 100.00 1.27 0.00
Investments in joint venture-net 71.94 34.17 37.77 110.54 8.75 5.00
Building and equipment - net 4.39 11.39 (7.00) (61.46) 0.53 1.67
Goodwill - net 139.14 139.14 - - 16.91 20.36
Computer program-net 0.71 0.42 0.29 69.05 0.09 0.06
Film rights - net 57.39 54.15 3.24 5.98 6.98 7.92
Other non - current assets 19.16 16.06 3.10 19.30 2.33 2.35
 Total Asset 822.59 683.44 139.15 20.36 100.00 100.00

Cash and cash equivalents decreased from December 31, 2017 in sum of Baht 31.10 million or 42.28 because the company has paid short-term loan to financial banking.

Accounts receivable and other receivables – net increased Baht 115.35 million or 82.30% from 2017 because there were movies releasing in the quarter 4/2018 and recorded as accrued income.

Films on production increased in amount of Baht 13.83 million or 7.75% from December 31, 2017. the Company’s plan to continuous releasing movies in the theater and produced more movies also.

Invesments in associated companies increased in amount of Baht 10.46 million or 100% from December 31, 2017 because of investment in Joint Venture Sang Krasue with the partners in the portion of 30%. The film will be released in 2019.

Investments in joint venture-net increased from December 31, 2017 by Baht 37.77 million or 110.54% because of the right offering in the associated companies to acquire films rights and to produce Thai films for distribution.

Liabilities and Equity of Shareholders

(Unit : Million Baht)
Liabilities and Equity of Shareholders December 31 Increase (decrease) % of liabilities per Equity of Shareholders
2018 2017 Amount % 2018 2017
Short-Term Loan and OD from Financial Institutes 19.99 60.00 (40.01) (66.68) 2.43 8.78
Account Payable and other payable 283.92 81.93 201.99 246.54 34.52 11.99
Other Current Liabilities 9.66 7.07 2.58 36.49 1.17 1.03
Other Non-Current Liabilities 5.42 5.01 0.41 8.18 0.66 0.73
Total Liabilities 318.99 154.02 164.97 107.11 38.78 22.54
Equity of Shareholders 503.60 529.44 (25.84) (4.88) 61.22 77.47
Total Liabilities and Equity of Shareholders 822.59 683.44 139.15 20.36 100.00 100.00

Overdrafts and short-term loans from financial institutions are funding sources to meet the Group’s working capital, the outstanding balance as of December 31, 2018 decreased from 2017 by Baht 40.01 million or 66.68% due in 2018 the Company had paid back the partial loan to financial banking.

Accounts payable and other payable increased from December 31, 2017 by Baht 201.99 million or 246.54% from the normal transaction of films rights distribution business and from the cost of advertising to promote Thai films.

Shareholders’ equity as of year-end 2018 decreased in sum of Baht 25.84 million or 4.88% resulting from revenues of the company generated loss in 2018.

Analysis of Financial Ratios:

December 31, 2018 December 31, 2017 December 31, 2016
Current Ratio 1.66 2.87 2.64
Account Receivable Turnover 2.24 2.25 1.85
Average Collection Period 163 162 196
Total Assets Turnover 0.41 0.53 0.51
Total Debt to Equity Ratio 0.63 0.29 0.38

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