Corporate News
NMG chairman Wilfred Kiboro (right) with industrialist Manu Chandaria
(left) and NMG’s acting group editorial director Tom Mshindi during the
release of the company’s half year results August 27. PHOTO | DIANA
NGILA
By David Herbling
In Summary
Nation Media Group’s
gross 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.
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The Nairobi bourse-listed media house’s turnover rose 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,” said Linus Gitahi, the NMG
chief executive.
The NMG board announced an interim dividend of Sh2.50 per share, the same rate as last year.
The group’s Newspapers Division continued to be a
big driver of the company’s 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.
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
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 projects 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. NMG’ cash reserves remained at Sh4.2 billion as
at end of June.
Wilfred Kiboro, the NMG board chairman however, warned that the
protracted legal battle over the switch from analogue to digital
broadcasting was holding back investments in the sector.
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.
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