Word from Mr Linus Gitahi, C.E.O

Triumph In Spite of Tough Year

The end of the year is in sight. 2011 will go down as a tough year for business operations in East Africa. The economies of the region have experienced macro shocks brought about by runaway inflation, depreciating currencies and high costs of inputs. In spite of this however, I am upbeat that the Nation team will triumph against the prevailing economic conditions and finish strong.  Your contribution in growing our business and giving our shareholders an optimized return cannot go unappreciated. I am very proud of the team.

The Group’s performance has continued to be good as a result of increased revenues in most of the divisions coupled with savings from operations. Nation Newspapers Division performance has consistently been above budget and ahead of 2010. The division’s results are attributable to improved advertising and circulation revenue and savings on direct costs. The advertising revenue growth benefited from volume growth owing to creative solutions and innovative sales approaches. The revamped content in all our publications has provided improvements in the market place. I am gratified that our products are meeting expected objectives from both business as well as consumer perspectives.

Business Daily’s overall results are better than budget and ahead of last year. The outlook for the paper remains positive and it is projected to end the year on profit. The EastAfrican performance is above budget and last year and is expected to grow further in the coming year. NTV’s revenue performance has continued to strengthen through 2011 as overall share of eye has increased as part of the overall strategy to regain market leadership.

QFM has shown steady growth quarter on quarter in both reach and market share. With the inclusion of sports as an active segment in QFM programming schedule, will further entrench its dominance.

Mwananchi Communications Ltd. continues to impress with very good results. It is expected to finish the year profitably and ahead of projections. Mwanaspoti is perhaps the surprise of 2011 with a phenomenal circulation growth in Tanzania and Kenya.

Monitor Publishers who commissioned a new printing press earlier this year performed better than last year but with several challenges impeding optimum growth. These challenges will be addressed in the short run allowing the business deliver exceptional returns going forward.

The Digital Division has also seen a huge bounce back in the latter half of the year and is expected to end on budget and with a significant improvement over last year. It is expected that these gains would continue to deliver good performance in 2012.The Nation Carrier business continues to perform on budget and has been successful in controlling costs especially with surging fuel costs.

In Q4 of 2011, the Group ventured to Rwanda with a new radio station that intends to ‘shake things up’ in that market by setting new standards. We expect that Rwanda will become a significant market in the coming months as we begin to grow our regional and continental influence. A bureau is under development in South Sudan and we should be fully operational in that market by Q1 of 2012. The regional expansion is a critical pillar in our vision of becoming the Media of Africa for Africa.

To manage and maintain our growth trajectory, the following senior positions have been instituted.

Mr. Sam Shollei
Mr. Sam Shollei, currently Managing Director of MCL in Tanzania will be relocating to Nairobi to take up new responsibilities as the Group’s Business Development Director. Sam relocates after a successful four years period at MCL where he has been instrumental in turning the business to profitability and putting in place a commendable and committed team. Reporting to the Group CEO, Sam takes up the new role in January 2012. The process of sourcing for his replacement is ongoing.

Dr. Gitahi Githinji:
Dr Githinji, currently MD Monitor Publications will be leaving the organization in mid December 2011 to pursue other interests. Dr. Githinji joined the Group in August 2007 and had previously served as GM for marketing and distribution before being appointed to his current role leading MPL to success over the period. I wish Dr. Githinji the best as he moves on to a new role outside the Group.

Mr. Alex Asiimwe:
Alex will be appointed acting Managing Director, MPL with effect from December 2011. He has just relocated back to Uganda after a 3 year seconded assignment to the Group as Commercial Manager, NND. The experience has prepared him well for the new position he will be taking up.

Mr. Charles Maye:
Charles will be moving from his current role as General Manager, Business Development to the position of General Manager, Radio Broadcasting. He joined NMG in October last year and has been instrumental in developing new business projects including NMG’s venture into Rwanda. With his strong marketing and sales background gained in positions at Celtel / Zain ( Ghana and Malawi) and Diageo (UK and Nigeria), Charles is experienced to take up this role as John Wilkins,  the outgoing  GM Radio, leaves to pursue other interest.

I wish these leaders the best in their new roles and ask that we give them the support that they require to succeed.

In closing and as the year ends, I want to wish you a safe and restful festive season. Celebrate and be very proud of all our achievements this year. I look forward to the team’s greater contribution in the coming year.

May you have a Happy Christmas and a Prosperous New Year.

Linus Gitahi, Group Chief Executive Officer.