Nation Media Group, Kenya’s largest media house, surprised the industry by announcing a net loss of KSh205.7 million for the full year 2023, from a profit of Ksh318.5 million in 2022. This was a culmination for a consistent drop in revenues over the past five years, as it struggles to adapt to changing media trends and monetisation.
Profit before taxation was Ksh431 million in 2023 compared to Ksh491 in 2022, confirming the media house is facing hard times. Turnover dropped marginally from Ksh7.2 billion to Ksh7.1 billion.
The full-year performance picked up from its poor show during the half year to 3oth June 2023 during which the media house posted a net profit of just Ksh2.9 million, a major decline from Ksh247.8 million in the half-year of 2022. During the second half of 2023, in October, NMG issued a profit warning of a big drop in profits by the end the year, citing increase in the cost of newsprint and a weak shilling.
The Group says performance was in 2023 adversely impacted by a challenging macro-economic environment with weakened consumer spending, rising prices of basic commodities, higher fuel prices and rising interest rates. This is the third consecutive year of revenue drops. NMG net profit for 2022 dropped to Ksh315.2 million from Ksh491.8 million in 2021.
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In addition, the depreciation of the Kenya shilling against the US dollar aggravated the impact of reduced consumer spending on newspapers and other media products in the period under review, resulting in an increase of 21% (Ksh298.7m) in cost of sales and a decline of 2.5% in turnover.
“As we embark on our Digital Northstar journey, a decision was made to impair the printing press in Kenya, resulting in an impairment charge of Ksh291.4mn. Consequent to the above factors, the Group posted a loss before tax of Ksh431.8mn for the year,” Angela Namwakira Nation Media Group Secretary, said.
NMG says its digital footprint increased to 60.2 million users compared to 57.9 million in the previous year, as a result of a continued focus on audience acquisition and engagement. The Group registered revenue growth in its niche products (Business Daily, The East African and Taifa Leo), resulting from insightful content and partnerships.
“We maintain our confidence in the investments we continue to make to transform the organization, develop a portfolio of new digital products, and enhance revenue diversification by monetising our extensive digital presence,” the company says in its Outlook.
“These efforts will solidify the Group’s position as the leading multi-media company in the region, delivering impactful content to our audiences. The Group will also continue to maintain a strong presence in commercially viable print and broadcast media, focusing on unique and relevant content.”
As a result of poor performance, Nation Media Group has announced massive layoff this year to stay afloat in the fledgling media industry. The company is said to be preparing to offload over 100 employees, hoping this will make it leaner enough for the digital-heavy media environment it has transitioned into.
Factoring in the retrenchment expenses, the company could stay in the loss territory at least for this half year, or even the entire 2024. “As you are aware, the media landscape is undergoing rapid transformation: Changes in audience consumption habits, technology, and other macroeconomic factors have disrupted business models across the world,” NMG CEO Stephen Gitagama wrote in a memo announcing the staff restructuring.
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