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mm2 Asia responds to SGX on differences in cash, borrowings for Q1
FILM production company mm2 Asia has responded to queries from the Singapore Exchange on certain significant differences between the financial results for FY2019 Q4 ended March 31, 2019 and FY2020 Q1 ended June 30, 2019.
The mainboard-listed company first addressed the S$6.7 million or 36 per cent increase in cash and cash equivalents to S$25.3 million for Q1 from S$18.6 million for the previous quarter.
It said that was due to, among other factors, S$0.4 million net cash generated from operating activities, S$29.5 million in financing from banks for working capital requirements, and S$5 million from the issuance of convertible bonds and notes for the cinema segment.
The group also paid S$9.9 million for interest, lease liabilities and borrowings, and used S$18.6 million for investing activities including purchasing film rights and a touring show by the event segment.
The firm's trade and other receivables decreased by S$7.3 million to S$173.4 million from S$180.7 million, with one factor being a S$14.9 million net reduction of trade receivables of the group.
Other receivables and deposits decreased by S$4.5 million mainly due to S$8 million paid that was classified as deposits in Q4 2019, and then reclassified as intangible assets upon completion of transaction by its event segment. This was then offset by deposits paid during Q1 2020.
As for a S$12.1 million increase in accrued revenue, mm2 Asia said the category comprised unbilled completed projects, of which there was a higher amount for Q1.
Film products and films under production decreased S$15.8 million or 72.1 per cent to S$6.1 million for Q1 versus S$21.9 million for Q4. This was mainly due to transfer of the film products to film rights in mm2 Asia's core segment.
"Film under production comprises the cost of producing a film, and upon completion, such costs will be classified as film products pending release," said mm2 Asia.
Short-term borrowings increased by S$27.5 million or 74.7 per cent mainly due to a new drawdown of short-term project financing for core and event segments which totalled S$22 million.
There was also a reclassification of S$4.8 million in long-term borrowings to short-term borrowings for financing repayments due within 12 months from Q1, said mm2 Asia.
As for a S$9.3 million or 7 per cent decrease in trade and other payables and accruals of the group, mm2 Asia said this was mainly due to shorter credit terms given by certain artistes, related costs for the event segment and faster repayment of its core production vendors.
Shares of mm2 Asia, which owns cinema chain Cathay Cineplexes, were unchanged at S$0.23 as at 2.15pm.