Standard Group CEO Orlando Lyomu is set to exit Kenya’s second largest media company, having presided over a torrid period that saw the company post back-to-back losses even as stock price declined and, for many months, journalists went unpaid.
The announcement of his exit comes barely a fortnight after a crucial board meeting that sealed his fate.
As Business Today reported on the day of the meeting, Lyomu was locked in a fight for survival as the directors deliberated on the company’s poor financial performances in recent years.
Questions have been raised on the Lyomu-led expansion push which has seen unprofitable new brands rolled out across broadcast and print even as core products including The Standard newspaper struggle in a fast-changing media landscape.
Standard Group announced a record loss before taxation of Ksh1 billion for the year ending 31st December 2022 from a loss of Ksh22 million in 2021. The company posted an Ksh865 million net loss in the 2022 financial year. The loss in 2022 was the biggest in its 120-year history.
Lyomu, who was previously the group’s Chief Finance Officer, took over from Sam Shollei as CEO in 2017.
Lyomu attributed the drastic loss in 2022 to an increase in the provision for expected credit losses, due to pending government bills and provisioning for servicing debt. The company is also feeling the weight of servicing loans – the cost of servicing its financing rose to Ksh215 million in 2022 – representing over 20% of its loss – compared to Ksh162.8 million in 2021.
Worryingly, Standard Group’s current assets – at Ksh1.6 billion – are three times less than its current liabilities of Ksh4 billion. Technically, the company is insolvent, and therefore in need of Ksh1 billion to keep it afloat.