Standard Group on Monday reported a Ksh306.1 million loss for the half-year ended June 2020 compared to the Ksh19.3 million profit the media company reported at a similar period last year, on dwindling advertising spend as corporates tightened the belts on marketing budgets leaving Kenyan publications sweating over the future.
Losses before tax stood at Ksh416.6 million during the period under review down from a profit of Ksh27.7 million
In a statement, the company’s board warned that the economic prospects remain uncertain adding that the company’s survival depends on the management of the pandemic both in Kenya and globally.
“Government initiatives continue to yield positive results, creating an enabling business environment and opportunities for the business resumption and revenue growth,” the board said in a statement.
The group’s balance sheet rose to Ksh4.25 billion up from Ksh4.19 billion even as revenues shrinked by 42% to Ksh1.4 billion from Ksh2.4 billion.
Total operating costs reduced by 24% to Ksh1.7 billion from Ksh2.3 billion as the company embarked on reducing its direct costs (40%) and overheads (15%).
“The board and management have taken various measures to ensure that the business navigates this difficult period and return to profitability. The group remains focused on its mission to disseminate media content that provides a voice to the society,” the company said in the statement.
Standard Group, has blown hot and cold in the last few years, unable to maintain positive consistency in its financial results reporting losses before bouncing back into profitability and back into loss-making.
The company has taken a beating from the current business climate and has been laying off employees as it moves towards the convergence newsroom model.
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In a newsroom setup, convergence means bringing together all broadcasting channels/publications owned by the same media stable under one editorial command to maximize efficiency and resources.
The convergence resulted in employees in the print, production, and commercial departments being sent home in the month of August.
In March, the company sent packing another 170 employees as part of a restructuring process.
In a notice to staff, Chief Executive Orlando Lyomu blamed the job losses on the need to realign organisational structure, automation, as well as a shift in consumption trends of media material that has had a negative impact on the company’s ability to attract revenue.
Lyomu said the company would be embarking on outsourcing of non-core services as a means to cut on costs at the listed company.
In April, the company issued another redundancy notice informed by the need to trim fat as the company projected that it would struggle to weather the COVID-19 storm.
The redundancy notice also came after the company established that its initial pay-cut strategy was not going to work.
Elsewhere at Nation Media Group (NMG), the honchos there have explored the possibility of adopting a new business model after harbouring resevations over the traditional advertising model based on financial perfomance.