Nation Media Group has maintained an interim dividend payout of Sh2.50 per share despite half-year net earnings dropping by nearly a fifth, underscoring the firm’s bullish outlook for the second half of the year.
The group reported a profit after tax of Sh785.4 million for the six months through June compared to Sh925.2 million in the same period last year, an outcome that was attributed to the one-off costs related to the re-organisation of the broadcasting division and provision for bad debts.
The Nairobi bourse-listed media house posted Sh5.6 billion in turnover compared with Sh6.1 billion in 2015.
“The outlook is positive considering we had non-recurring items, which will not be in the second half. We also expect overdue payments from the government,” said NMG chairman Wilfred Kiboro at an investors’ briefing in Nairobi on Tuesday.
“We have delivered these results despite operating in a digital disruption environment where the number of competitors has gone up significantly,” he said.
Total costs dropped 4.1 per cent to Sh4.4 billion in the period under review — being the fruits of the efficiencies of the new printing press, effective route-to-market strategies, and prudent cost management, Mr Kiboro said.
NMG’s Kenya TV division grew operating results by 71 per cent in the period when NMG re-organised the Kenyan broadcasting division to have NTV as a bilingual channel.
Recently, NMG signed revenue sharing deals with three regional media stations — Star TV, Njata TV and Lolwe TV — allowing them to pick the NTV signal as well as popular programmes such as NTV News, Breaking News, The Trend, Sports Shows, etc.
The company’s digital business saw operational earnings grow 90 per cent, as NMG aggressively leveraged on its flagship portal — www.nation.co.ke — and that of other 15 websites to turn online audiences into revenue streams.
Group Chief Executive Joe Muganda said he plans to grow the digital division’s contribution to total earnings to 10 per cent within the next 24 to 36 months.
“Our strategic objective is to foster a strong digital foundation coupled by new revenue streams for a sustainable and profitable future,” said Mr Muganda. “New age consumers are not consuming our products in the traditional way.”
NMG, the largest media group in Eastern and Central Africa, said Uganda operations were impacted by a slowdown attributed to the February General Election which saw businesses take a wait-and-see approach.
Mr Muganda reckoned that the new $20 million (Sh2 billion) state-of-the-art printing press launched in mid-March was a key driver of print advertising by offering clients ‘‘new unique attractive formats’’ such as half cover and super panorama designs.
The new plant also helped the newspaper division cut costs by a fifth in the reported period. Uganda’s Daily Monitor circulation market share was up by three per cent, while that of the Daily Nation and Tanzania’s Citizen grew by two per cent each.
The media group incurred one-off costs and exceptional items totalling Sh444 million related to foregone earnings from the re-organised broadcasting units, payment delays due from government, and costs associated with setting up a new TV station in Uganda.