Nation Media Group (NMG) has reported a 23% reduction in profit after tax for the full year ended December 2019 to Ksh856 million down from Ksh1.1 billion reported the previous year while the company has cautioned stakeholders that it is expecting an even tougher year in wake of the Novel Coronavirus Pandemic.
Profit before tax also dipped by 20% to Ksh1.3 billion from Ksh1.6 billion during the period under review while turnover dipped to Ksh9 billion from Ksh9.6 billion.
The media group attributes the dwindling fortunes to a reduction in advertising spends and increased costs to print news for traditional media. However, the company says that the adverse impact of the market environment on the group’s overall performance was mitigated by reduced operating costs.
“The group’s performance was adversely affected by a challenging economic environment with industry specific developments in a leading advertising sector precipitated in reduction in advertising spends in general,” said the company.
A key highlight of the published results is that the company will not be paying its shareholders a final dividend citing the need to invest heavily in new revenue-generating streams.
“The directors do not recommend a final dividend for the year. Consequently, the interim dividend of Ksh1.50 per share (60%) per share on the issued capital of Ksh188.5 million ordinary shares of Ksh2.50 each paid on September 30, 2019 will be the total dividend per share and will be deemed the final dividend for the financial year ended December 31, 2019,” said Interim Company S. Owino.
Not Unique to NMG
Nation’s struggles are not unique to the Aga Khan owned media entity alone but rather it is an industry wide problem.
Business Today has reported before that traditional media is now struggling to attract advertisers as it once did due to the emergence of digital media.
Coronavirus Impact on the Media Business
The loss of revenue is costing jobs in the sector and in other instances leading to pay cuts. Standard Group has already announced that it is letting go 170 journalists within its ranks while Citizen TV has announced a 20- 30% reduction in pay for its staff.
Elsewhere, Mediamax has announced a 50% pay reduction for its staff that will see media stars such as Betty Kyalo and Jalang’o earn half their normal salaries while Radio Africa Group has announced a 30% pay cut for employees earning above Ksh100,000 and 20% for those earning below the amount in question.
Back at NMG says it has put in place the appropriate mechanisms to protect its staff.
On April 2, the media house sent a sizable number of its staff on leave stating the need to decongest the Twin Towers, as the Nation Centre is popularly known in media circles.
The forced leave has served as a panic magnet with staff questioning whether they will still be clinging on to their jobs at the end of the leave period.