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MCOT ‘not insolvent’ as cash shrinks

State-owned broadcaster MCOT is going through a liquidity crunch but is not insolvent, says a source at the Finance Ministry who requested anonymity.

MCOT is not on the State Enterprise Policy Office’s list to begin a business rehabilitation plan, the source said.

MCOT’s liquidity problem stems from an absence of income contribution from BEC World, the operator of Channel 3, after the country transitioned to the digital TV scheme, as well as delays in advertising payments due to the pandemic, the source said.

According to Stock Exchange of Thailand data, MCOT’s total debts improved to 1.39 billion baht at the end of March 2020 from 1.51 billion at the end of 2019 and 3.03 billion at the end of 2018, while its shareholders’ equity was weakened to 2.31 billion at the end of March from 3.22 billion at the end of 2019 and 3.65 billion at the end of the preceding year.

Based on the data, MCOT’s debt-to-equity ratio was 0.6 times at the end of March, deteriorating from 0.47 times at the end of last year but improving from 0.83 times at the end of 2018.

MCOT was mired in a net loss of 877 million baht in the first quarter of 2020, worsening from 32 million over the same period last year.

The broadcaster posted a net loss of 457 million baht in 2019, 376 million in 2018 and 2.54 billion the previous year.

The source believed MCOT’s executives are seeking solutions to address the liquidity problems.

MCOT’s problems are dissimilar to financially ailing Thai Airways International, which is overly leveraged by debt, said the source.

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For the three months through March, MCOT’s revenue plunged by 21% from a year earlier to 467 million baht.

Broadcasting remains MCOT’s main income contributor. Radio business generated 29% of MCOT’s total revenue in the first quarter of 2020, followed by television business at 24%, broadcast network operator service at 19%, joint operations at 22%, new business including online media at 1% and others making up the rest.

Shares of MCOT closed on Wednesday on the Stock Exchange of Thailand at 5.10 baht, unchanged, in trade worth 2.31 million baht.

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