Just a thought: do they activate assets when they create content, ie cash costs but higher net income? The financials look as if FCF conversion (fcf/ni) is rather high (in most years) but this could be influenced (upwards) by minorities ...?
Thanks for reading, and thanks for your comment! The company spends significantly more on film licenses than on own production - in 2024, PLN74m on film licenses VS PLN4m on own production. And the film licenses are amortized on a straight-line basis on a period of usually up to three years, while the cash costs are included within operating cash flow. So yes, this creates some discrepancy between net income and free cash flow. But the company's EBIT and operating cash flow have both increased strongly over the past decade and by roughly similar amounts, so there doesn't seem to be anything improper here. Re minorities - not sure I follow your comment? The company has no minority interests.
Just a thought: do they activate assets when they create content, ie cash costs but higher net income? The financials look as if FCF conversion (fcf/ni) is rather high (in most years) but this could be influenced (upwards) by minorities ...?
Thanks for reading, and thanks for your comment! The company spends significantly more on film licenses than on own production - in 2024, PLN74m on film licenses VS PLN4m on own production. And the film licenses are amortized on a straight-line basis on a period of usually up to three years, while the cash costs are included within operating cash flow. So yes, this creates some discrepancy between net income and free cash flow. But the company's EBIT and operating cash flow have both increased strongly over the past decade and by roughly similar amounts, so there doesn't seem to be anything improper here. Re minorities - not sure I follow your comment? The company has no minority interests.