NMG half-year profit up to Sh1.6bn

Nation Media Group (NMG) chief executive Linus Gitahi, businessman Chris Kirubi (centre) and NMG chairman Wilfred Kiboro (left) during the company’s investor briefing meeting at the Serena Hotel in Nairobi last Friday. Salaton Njau 

By VICTOR JUMA

In Summary

• NMG turnover jumped 10 per cent to Sh6.4 billion on the back of increased circulation and advertising revenue from print, digital and broadcast products across the region.
• The firm's share price has risen nearly 18 per cent over the past six months to Sh315, recording the highest gain among companies listed in the commercial segment of the NSE.

Increased revenue and lower operating expenses lifted Nation Media Group’s six-month profit before tax by 17.5 per cent to Sh1.62 billion, defying an economic slowdown caused by the March General Election.

Group turnover for east and central Africa’s largest media house jumped 10 per cent to Sh6.4 billion on the back of increased circulation and advertising revenue from print, digital and broadcast products across the region.

The group chairman, Mr Wilfred Kiboro, announced an interim dividend of Sh2.50 per share, which represents a 20 per cent increase in the total payout factoring in last year’s bonus issue of one share for every five.

Mr Kiboro said NMG’s geographical and product diversification helped the company to defy slow business in Kenya around the electioneering period, when economic activity came to a near stand-still.

“Our regional diversification helped us to overcome business challenges in the first quarter as a result of Kenya’s General Election,” said Mr Kiboro.

Another key driver of profit growth was a drop in direct expenses, mainly due to stable newsprint prices and favourable exchange rates.

The Nation Newspapers Division’s advertising revenue increased by 14 per cent, while circulation income was up six per cent.

NMG’s share price has risen nearly 18 per cent over the past six months to Sh315, recording the highest gain among companies listed in the commercial segment of the Nairobi Securities Exchange.

(READ: NMG grows its online platforms in leaps and bounds)

The company’s Kiswahili television station QTV, which was launched last year, recorded a 363 per cent growth in operating results.

The Business Daily posted a 109 per cent rise in operating profit, with earnings of other brands like NTV Kenya also growing by double digits.

Uganda’s Monitor Publications suffered disruption in May following a two-week closure by the government, which negatively impacted on its revenue and operating profit.

Chief executive Linus Gitahi noted that the Monitor had resumed normal operations shortly after the closure, adding that NMG will continue to search for investment opportunities in the region to fuel its growth.

“Our strong cash flow puts us in a good position to continue looking for new investment opportunities which we can fund internally,” said Mr Gitahi.

The company had reserves of Sh4.2 billion as of June, representing a nine per cent rise over the Sh3.9 billion it had in the same period last year.