East Africa’s biggest publisher Nation Media Group with newspapers, radio and television stations in Kenya as well Uganda, Rwanda and Tanzania, recorded a drop in profits to Ksh 580.8 million in the first half of 2019 with a 24% pretax profit fall. The decline in profitability was mainly attributed to the challenging business environment that saw many companies cut their advertising budgets in a period faced with losses, profit warnings and staff layoffs.
This also affected the overall turnover which fell by 7% from to Ksh 4.58 in the six months to end June from Ksh 4.93 in the first half of 2018. According to NMG board Chairman Wilfred Kiboro, most of the newsprint in use during the first half were procured last year when global prices were high owing to a supply shortage. Prices have since subsided.
Direct costs went up from Sh851 million to Sh970 million mainly driven by higher prices of newsprint in the global market. Operating costs, however, dropped by 8.5 per cent to Sh3.03 billion attributed to improved productivity and efficiency.
Total cash grew by 29 per cent to Sh2.8 billion as a result of increased collections particularly from Government Advertising Agency which paid Sh585.6 million of the debt that was outstanding at the end of last year.
NMG is focusing on monetising its digital assets as the next frontier for new revenue streams, as the group’s Chief Executive Officer Stephen Gitagama said the next phase will be about strengthening delivery on impactful journalism while serving content in formats that resonate with the fast-evolving needs of different audiences.