MD & A

Company and Subsidiary Operation Result

Since latest of 1st quarter of 2021 there has been a new wave of the coronavirus disease 2019 epidemic (“COVID-19 outbreak”), which adversely affects the Company's performance for the year ended 31st December 2021 especially the performance of the movie production and the film rights distribution businesses.

According to protocol to prevent the spread of COVID-19 that occurs in many areas, results in the control and limitation of film production and on showing in movie theater thus effect film production and distribution to postpone their schedule during 18th March 2021 to 30th September 2021, which is longer than the previous year before theaters resumed to operate in the fourth quarter of 2021, therefore, revenue of movie production and film rights distribution decreased compare to the previous year. However, the Company still has decent income from producing and distributing films through many channels other than cinemas, including Free TV, Cable TV, and Streaming like Netflix. The Company especially aware of the COVID-19 epidemic situation included assessing the impact on operations and planning closely to deal with such incidents which the operating results of the Company in the year 2021 are as follows:

Revenue

Total Revenue of the Company and subsidiaries for the Year ended 31st December 2021 are THB 165.76 million decreased THB 124.34 million or 42.86% when comparing with the previous year in the same period which can be categorize to each type as follow table.

(Unit: Million Baht)
Business Line Amount Increase (Decrease) Ratio : Total Revenue
2021 2020 Amount % 2021 2020
Revenues from film rights distribution 82.00 107.15 (25.15) (23.47) 49.47 36.94
Revenues from film production 74.49 172.57 (98.08) (56.83) 44.93 59.49
Management fee income 1.51 1.54 (0.03) (1.95) 0.91 0.53
Advertising income 1.97 5.72 (3.75) (65.56) 1.19 1.97
Sales of goods - 0.07 (0.07) (100.00) - 0.02
Total Revenues 159.97 287.05 (127.08) (44.27) 96.50 98.95
Other income 5.80 3.05 2.75 90.16 3.50 1.05
Grand Total Revenues 165.76 290.10 (124.34) (42.86) 100.00 100.00

Revenue from film rights distribution for year ended 2021 are THB 82.00 million decreased THB 25.15 million or 23.47% when comparing with the previous year in the same period which mainly from selling strategy adjustment to expanding distribution channels other than cinemas, such as Digital Online for THB 22 million and Free TV for THB 13 million.

Revenue from film production for year ended 2021 are THB 74.49 million decreased THB 98.08 million or 56.83% when comparing with the previous year in the same period which mainly from selling movies license such as Som-Pla-Noi, Reuang-Phee-Laow and Som-Poi.

Advertising income for year ended 2021 are THB 1.97 million decreased THB 3.75 million or 65.56% when comparing with the previous year in the same period which mainly effected from movie theater temporary closed which cause decreasing of movies amount on show time.

There are none of sales of goods for year ended 2021 because the Company have been cancelled online products selling.

Cost of sales and services and Gross profit

Cost of sales and services of the Company and subsidiaries for the Year ended 31st December 2021 are THB 102.96 million decreased THB 65.35 million or 38.83% when comparing with the previous year in the same period consistent with the decreased in movie production and film rights distribution revenue. Gross profit for year ended 31st December 2021 are THB 57.00 million decreased THB 61.73 million or 51.99%.

Selling and Administrative Expenses

Selling and Administrative Expenses of the Company and subsidiaries for the Year ended 31st December 2021 are THB 71.18 million decreased THB 78.37 million or 52.41% when comparing with the previous year in the same period which because of the Company recognized expected credit loss according to Thai Financial Reporting Standards No.9 (TFRS9) of M Talent Co., Ltd. in amount of THB 37.15 million in 2020 and decreased selling expenses in amount of THB 42.51 million from amount of films on show time decreased because of COVID-19 outbreak situation.

The Company and Subsidiary’s Financial Position

Assets

As at 31st December 2021, the Company has total assets of THB 682.10 million decreased from 31st December 2020 in amount of THB 68.33 million or 9.11% which detailed as follow table.

(Unit: Million Baht)
Assets As of December 31 Increase (decrease) % of total asset
2021 2020 Amount % 2021 2020
Cash on hand and cash equivalents 124.11 94.72 29.39 31.03 18.20 12.62
Trade and other receivables, net 146.10 203.01 (56.91) (28.03) 21.42 27.05
Film under production 66.04 107.21 (41.17) (38.40) 9.68 14.29
VAT receivables 10.66 7.86 2.80 35.62 1.56 1.05
Withholding tax deducted at sources 23.54 24.61 (1.07) (4.35) 3.45 3.28
Other current assets 0.71 2.04 (1.33) (65.20) 0.10 0.27
Investments in associates 35.98 44.56 (8.58) (19.25) 5.27 5.94
Joint arrangements, net 42.74 46.35 (3.61) (7.79) 6.27 6.18
Building and equipment, net 11.04 13.47 (2.43) (18.04) 1.62 1.79
Rights-of-use asset 9.09 11.07 (1.98) (17.89) 1.33 1.48
Goodwill, net 139.14 139.14 - - 20.40 18.54
Computer program, net 0.36 0.52 (0.16) (30.77) 0.05 0.07
Film rights, net 62.25 41.93 20.32 48.46 9.13 5.59
Deferred tax assets 10.32 13.93 (3.61) (25.92) 1.51 1.86
Other non-current assets, net 0.01 0.01 - - 0.00 0.00
Total Assets 682.10 750.43 (68.33) (9.11) 100.00 100.00

Trade and other receivables, net as at 31st December 2021 decreased from previous year in amount of THB 56.91 million or 28.03% which mainly because of trade account receivable and accrued income from movies that on show time in 4th quarter of 2020.

Film under production as at 31st December 2021 decreased from the previous year in amount of THB 41.17 million or 38.40% from films production that finished and ready to distribute to each market channel such as Mon-Ruk-Wua-Chon and Bung-Fire-Slider.

Joint arrangements, net as at 31st December 2021 decreased from the previous year in amount of THB 3.61 million or 7.79% because of the Company recognized addition impairment on investments in Transformation films Co., Ltd. in amount of THB 1.90 million and also share of loss investment in joint ventures in amount of THB 1.90 million.

Building and Equipment, net as at 31st December 2021 decreased from the previous year in amount of THB 2.43 million or 18.04% from depreciate over time ofoffice and equipment.

Film rights, net as at 31st December 2021 increased from the previous year in amount of THB 20.32 million or 48.46% from film purchasing and completed production film ready to be distribute in each channels.

Liabilities and Equity

(Unit : Million Baht)
Liabilities and Equity As of December 31 Increase (decrease) % of liabilities per Equity of Shareholders
2021 2020 Amount % 2021 2020
Short-term borrowings from financial institutions 35.00 35.00 - - 5.13 4.66
Trade and other payables 162.66 202.45 (39.79) (19.65) 23.85 26.98
Contract liabilities 34.05 36.82 (2.77) (7.52) 4.99 4.91
Other current liabilities 4.46 8.30 (3.84) (46.27) 0.65 1.11
Other non-current liabilities 11.44 14.27 (2.83) (19.83) 1.68 1.90
Total Liabilities 247.61 296.85 (49.24) (16.59) 0.40 0.31
Total Equity 434.49 453.59 (19.10) (4.21) 63.70 60.44
Total Liabilities and Equity 682.10 750.43 (68.33) (9.11) 100.00 100.00

Trade and other payables as at 31st December 2021 decreased from the previous year in amount of THB 39.79 million or 19.65% from trade accounts payable – related parties of film production and film rights distribution businesses.

Contract Liabilities as at 31st December 2021 decreased from the previous year in amount of THB 2.77 million or 7.52% as carried services to deliver to clients according to the contract.

Other non-current liabilities as at 31st December 2021 decreased from the previous year in amount of THB 2.83 million or 19.83% because of the Company liabilities under lease agreements due for more than 1 year decreased from the recognition of lease liabilities of new office buildings in accordance with Thai Financial Reporting Standards No.16 (TFRS16) about Lease Agreement in 2020.

Total Equity as at 31st December 2021 decreased from the previous year in amount of THB 19.10 million or 4.21% because in 2021, the Company had transfer surplus from share reduction to offset the deficit.

Financial Ratio Analysis

Financial Ratios December 31, 2021 December 31, 2020 December 31, 2019
Current Ratio (Times) 1.57 1.56 1.95
Account Receivable Turnover (Times)

0.96

1.61 2.46
Average Collection Period (Days) 380 227 148
Total Assets Turnover (Times) 0.23 0.38 0.61
Total Debt to Equity Ratio (Times) 0.57 0.65 0.44

Operating Efficiency Ratio

  • Account Receivable Turnover 0.96 times decreased from the previous year due to expected credit loss according to TFRS 9 and impact of COVID-19 outbreak situation.
  • Average Collection Period 380 days increased from the previous year because the Company support debtor to expand the repayment period according the COVID-19 outbreak situation.
  • Total Assets Turnover 0.23 times decreased from the previous year as the reason mentioned above
  • Total Debt to Equity Ratio 0.57 times decreased from the previous year due to trade accounts payable – related parties decreased.