MD & A

Operation results of the Company and subsidiaries

The Group generated loss in 2017 and 2016 in amount of THB 163.27 million and THB 85.31 million respectively.

Total revenues were recorded at Baht 365.68 million, main revenue in amount of Baht 0.72 million from management fee, Baht 112.38 million from film rights distribution, Baht 148.81 million from film, Baht 12.91 million from selling VCDs and DVDs, Baht 0.44 million from selling pocket book and Baht 88.33 million from advertising, representing 0.20%, 30.73%, 40.70%, 3.53%, 0.12% and 24.16% of total revenues respectively. Compared with 2016, the total revenues decreased about 25.63%.

Total expenses became lower about 8.33% from Baht 577.03 million in 2016 to Baht 528.95 million in 2017 because Costs of production and services decreased from Baht 278.33 million to Bath 228.52 million or 17.90% and selling and administrative expenses decreased from Baht 303.07 million to Baht 300.43 million or 3.93%.

Revenues

The Group’s total revenues in 2017 decreased about Baht 126.03 million or 25.63% from a year earlier, which could be broken down by line of business in the below table:

(Unit: Million Baht)
Business Line Amount Increase/(Decrease) Ratio : Total Revenue
2017 2016 Amount % 2017 2016
Management fee 0.72 0.48 0.24 50.00 0.20% 0.10%
Film rights 112.38 151.66 (39.28) (25.90) 30.73% 30.84%
Film production 148.81 201.56 (52.74) (26.17) 40.70% 40.99%
VCD-DVD 12.91 85.71 (72.81) (84.94) 3.53% 17.43%
Sale pocket book 0.44 4.69 (4.25) (90.61) 0.12% 0.95%
Advertising 88.33 41.11 47.22 114.87 24.16% 8.36%
Other Revenue 2.09 6.51 (4.42) (67.86) 0.57% 1.32%
Total Revenue 365.68 491.72 (126.03) (25.63) 100.00% 100.00%

Film rights Distribution has decreased in revenues by Baht 39.28 million or 25.90 % because the movies released in theaters in 2017 could generate revenue less than in 2016.

Film production business; the revenues increased by Baht 52.74 million or 26.17% because the year 2016, films made high revenue comparing by 2015 especially Thai Movie “Jazz 4G” generated the highest box office at Bath 152.80 million.

VCD and DVD distribution business recorded decrease from 2016 of Baht 78.21 million or 84.94% in revenues due to in 2016 the Group has produced and sold VCDs and DVDs less than 2015

Advertising revenues in 2016 recorded increase of Baht 47.22 million or 114.87% because in the year 2017, we had more advertising areas in international and Thai films comparing by 2016.

Costs of Production and Services and Gross Profit Margin

The Group’s costs of production and services decreased from 2016 about Baht 49.81 million or 17.90% because of the decrease of production and distribution in home entertainment sector which connected with lower revenue.

Selling and Administrative Expenses

Selling and administrative expenses became lower which comparing Year 2016 at Baht 303.07 million with Year 2017 at Baht 300.43 Million or decreasing at Baht 12.64 Million (0.87%) caused by reducing costs of administration of the Group.

Financial Result of the Company and Group

Asset

As of December 31, 2017, the Group had total assets of Baht 683.44 million, downed from December 31, 2016 of Baht 275.89 million or about 28.76%. The assets were composed of the following items:

(Unit: Million Baht)
Assets As of December 31 Increase (decrease) % of total asset
2017 2016 Amount % 2017 2016
Cash and cash equivalent 73.55 133.23 (59.68) (44.79) 10.76% 13.89%
Accounts receivable - net 140.15 272.03 (131.88) (48.48) 20.51% 28.36%
Short term loan to related company 5.00 8.00 (3.00) (37.50) 0.73% 0.83%
Inventory-net 2.58 4.97 (2.39) (48.09) 0.38% 0.52%
Film on Production 178.36 221.09 (42.73) (19.33) 26.10% 23.05%
Other current assets 28.47 51.50 (23.03) (44.72) 4.17% 5.37%
Investments in joint venture-net 34.17 36.16 (1.99) (5.50) 5.00% 3.77%
Building and equipment - net 11.39 15.90 (4.51) (28.37) 1.67% 1.66%
Goodwill - net 139.14 139.14 - - 20.36% 14.50%
Computer program-net 0.42 0.58 (0.16) (27.59) 0.06% 0.06%
Film rights - net 54.15 65.62 (11.47) (17.48) 7.92% 6.84%
Other non - current assets 16.06 11.12 4.94 44.42 2.35% 1.16%
 Total Asset 683.44 959.34 (275.90) (28.76) 100.00% 100.00%

Cash and cash equivalents decreased Baht 59.68 million or 44.79% from December 31, 2016 due to efficient management policy. Moreover, in 2017, the Company liquidity’s improved, and partly due to the sale and collection of trade receivables faster which affect the cash and cash equivalents increased

Accounts receivable and other receivables - net decreased Baht 131.88 million or 48.48% from 2017 recorded writing off the bad debt caused by VCD and DVD business at Bath 78.09 Million.

Inventories which the most from VCD and DVD distribution’s sector, decreased from December 31, 2017 in amount of Baht 2.39 million or 48.12% caused by decreasing manufacturing VCDs DVDs and sale pocket book.

Films on production decreased in amount of Baht 42.72 million or 19.32% from December 31, 2016 due to the plan of continuous production Thai movies for theatrical release which reflected to higher expense of Film on production.

Film rights - net came down from December 31, 2016 by Baht 11.47 million or 17.47%. Since, the Company has carefully planned and managed film rights which making the value of the film rights decrease by comparing the previous year.

Liabilities and Equity of Shareholders

(Unit : Million Baht)
Liabilities and Equity of Shareholders December 31 Increase (decrease) % of liabilities per Equity of Shareholders
2017 2016 Amount % 2017 2016
Short-Term Loan and OD from Financial Institutes 60.00 106.93 (46.93) (43.89) 8.78% 11.15%
Account Payable and other payable 81.93 146.16 (64.23) (43.94) 11.99% 15.24%
Other Current Liabilities 7.06 8.45 (1.39) (16.45) 1.03% 0.88%
Other Non-Current Liabilities 5.01 5.05 (0.04) (0.79) 0.73% 0.53%
Total Liabilities 154.00 266.59 (112.58) (42.23) 22.53% 27.79%
Equity of Shareholders 529.44 692.75 (163.31) (23.57) 77.47% 72.21%
Total Liabilities and Equity of Shareholders 683.44 959.34 (275.89) (28.76) 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, 2017 decreased from 2016 by Baht 46.93 million or 43.89 % due in 2017 the Company use more loan from financial bank for producing Thai Films and Series for support Thai and Foreign Films market.

Accounts payable and other payable December 31, 2017 decreased from December 31, 2016 by Baht 64.24 million or 43.95% for normal transaction of businesses.

Shareholders’ equity as of year-end 2017 was at Baht 529.44 million as presented in the consolidated financial statement, decreased from Baht 692.75 million as of end-2016 resulting from revenues of the company generated loss in 2017.

Analysis of Financial Ratios:

December 31, 2017 December 31, 2016 December 31, 2015
Current Ratio 2.87 2.65 3.70
Account Receivable Turnover 2.25 1.85 2.07
Average Collection Period 162 196 211
Total Assets Turnover 0.53 0.51 0.50
Total Debt to Equity Ratio 0.29 0.38 0.24

Efficiency Ratios

Total Assets Turnover; the ratio of assets turnover in 2017 was slightly faster than 2015 because there was more income from the operation result in 2017.

Receivable Turnover and Average Collection Period; The Group typically grants a credit term of around 90- 180 days. Its receivable turnover for the current year is the same rate. Nevertheless, the VCD and DVD distribution business grants a collection period to the individual customers in accordance with the usual business norms.