Government debt, a week long closure of its premier TV station as well as rising price of news print contributed to the 16.4% slide in Nation Media Group (NMG) pre-tax profit for the year ended December 2018.
Having posted full year results of Ksh1.95 billion in 2017, the media firm announced a pre-tax profit of Ksh1.6 billion during an investor briefing on April 17. NMG also proposed a final dividend of Ksh5.
This is the second consecutive year that NMG is seeing a pre-tax profit recession, having also declined from Ksh2.46 billion in 2016.
According to Finance Director Richard Tobiko, the listed firm was set back by a number of challenges in 2018 which affected the larger media landscape across the region.
The media company said that debt from government placed a dent in the financial results. “Performance was adversely impacted by depressed regional economies and the discontinuation of Government advertising from July 2018 due to non-payment of debts” said Tobiko.
At the same time, NMG said the closure of NTV for a week in February following the airing of the swearing in of Raila Odinga impacted the company’s books.
News print prices also rose thus increasing expenditure, Tobiko said,. During the second half of the year, news print price that started at an average of Ksh69,800 rose to settle at an average of Ksh88,800.
NMG MAKES Ksh1.6bn profit before tax for 2018, down 16.4pc mostly due to bad debt by the government.
— Nation Breaking News (@NationBreaking) April 17, 2019
The company also saw turnover decline by 9.1% from Ksh10.6 billion in 2017 to Ksh9.6 billion last year.
The media firm was also entangled in a talent battle that saw NMG lose a number of key staff. “But we have since rebuilt the team. We are confident the young people who have come on board are up to task,” said Tobiko.
NMG, which owns NTV Kenya and Daily Nation newspaper among other media outlets also said that it is leading in digital footprint in Kenya.
Chief Executive Stephen Gitagama said that on average, online readership is around 700,000 to sometimes 900,000 viewers daily.
“Our key challenge is to see how we monetize and make money from the high number of users,” he said.
Gitagama also added that digital revenue as well as digital advertising revenue has been showing a growing trend for the company. “Though the trend has changed slightly, with digital revenue growing faster than the digital advertising revenue.”
The NMG CEO also revealed that by the end of the year, the firm intended to set up a Tanzania Buzz and Uganda Buzz, following on from the entertainment and hotspots magazine Kenya Buzz.
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