Nation Media profit hits Sh1.7bn, keeps dividend at Sh2.5 a share -

 

In Summary

• NMG’s Kenya TV division, which is made up of NTV and QTV, more than doubled its operating profit, which rose by 131 per cent during the accounting period.
• NMG — the largest media company in East and Central Africa — plans to install a Sh1.8 billion ($20 million) state-of-the-art printing press mid next year to improve the quality of newspapers and increase pagination. The new press will be funded from the company’s internal cash reserves.
• Operating profit was down in Uganda’s Monitor Publications partly caused by a long-drawn recovery from the disruption in May last year following a two-week closure by the government.

By DAVID HERBLING
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Nation Media Group’s profit before tax grew to Sh1.7 billion in the period to June 2014, helped by increased sales and prudent cost management in a tough operating environment characterised by rising inflation and a wave of insecurity.

The Nairobi bourse-listed media house’s turnover rose by 0.3 per cent to Sh6.4 billion despite missing the one-off earnings from last year’s General Election.

“The void in income attributable to the General Election, which boosted the results in the first half of last year, was mitigated by a combination of new innovative income generation projects as well as sustained cost cutting measures,” NMG chief executive Linus Gitahi said.

The NMG board announced an interim dividend of Sh2.50 per share, the same rate as last year.

The group’s Newspapers Division’s continued to be a big driver of the earnings, having cut operational costs by 14 per cent and returned operating profit that was one per cent higher than a similar period last year.

DOUBLED OPERATING PROFIT

NMG’s Kenya TV division, which is made up of NTV and QTV, more than doubled its operating profit, which rose by 131 per cent during the accounting period.

NTV Uganda posted a 12 per cent growth in advertising revenue, driven by increased market share and new programmes.

The Business Daily’s operating profit rose by 80 per cent, driven by a 15 per cent growth in circulation revenue and a four per cent growth in advertising revenue.

Operating profit was down in Uganda’s Monitor Publications partly caused by a long-drawn recovery from the disruption in May last year following a two-week closure by the government.

NMG’s Tanzanian subsidiary Mwananchi Publications had circulation revenue grow by 23 per cent. This was attributed to commencement of newspaper printing in Mwanza, which helped increase sales and access to the lake region market.

Mr Gitahi said the company projected to make better returns on the second half of this year.

“We are optimistic of sustaining growth in the remaining half of the year.”

NMG — the largest media company in East and Central Africa — plans to install a Sh1.8 billion ($20 million) state-of-the-art printing press mid next year to improve the quality of newspapers and increase pagination. The new press will be funded from the company’s internal cash reserves.

The group’s cash reserves remained at Sh4.2 billion as at end of June.

The NMG board chairman Wilfred Kiboro, however, warned that the protracted legal battle over the switch from analogue to digital broadcasting was holding back investments in the sector.

DIGITAL BROADCASTING

The Supreme Court is yet to rule on a case filed by NMG and two other media houses challenging the planned migration to digital broadcasting.

The three media companies argue that the shift to digital from the current analogue should not be effected until broadcasters are granted a digital signal distribution licence.

Mr Kiboro said NMG was ready to distribute affordable digital set-top boxes if they win the court case and are awarded a digital broadcasting licence