Nation Media Group (NMG), the regional media powerhouse in East Africa, posted a significant decline in Net Earnings to Sh2.9 Million at the end of the half year period ended June 30, 2023.
This is compared to net profit of Sh247.8 Million in H1 2022. The Nation Media Board attributes the Group decline in profitability to the drastic rise in the cost of imported raw materials, particularly newsprint, and the depreciation of the Kenya Shilling against the US Dollar.
The resultant incremental direct costs of Sh179 million was absorbed by the Nation. This adverse impact was partially mitigated by reduced operating costs resulting from improved operational efficiency and increased productivity.
The Nation Board also points to weak consumer spending, rise in price of basic commodities, hike in fuel prices and interest rates, for its weak financials.
The Group’s turnover fell by 4.5% to Sh3.5 billion in June 2023 from Sh3.7 billion in June 2022 while its Gross Profit declined to Sh2.7 billion from KSh 3 billion over a similar period last year.
The NMG pre-tax profit slid to Sh10.8 Million at the end of June 2023 from Sh354 Million in H1 2022 while the firm’s earnings per share was nil from Sh1.3 per share in H1 2022.
This decline could explain a move by NMG to carry out a second share buyback program to shore up its equity prices and reward shareholders.
NMG Total comprehensive income fell to Sh190.5 Million from Sh219.4 Million in H1 2022 while income attributable to owners of the firm fell to Sh176.8 Million from Sh218.8 Million during the period under review.
The Group’s performance during the first half of this year was, however boosted by growth of its digital footprint which saw a rise of 14% to 59.5 million users compared to 52.2 million users last year.
“We continue to focus on innovation to develop products that resonate with audiences through an experiment-driven development approach to accelerate monetisation of our expansive digital footprint, said the NMG Board.
The Group registered continued growth in its niche products – Business Daily, The EastAfrican and Taifa Leo – as a result of insightful content and partnership initiatives. Similar initiatives are being implemented for other products across the Group.
Considering the prevailing economic environment and the Group’s investment plans, the Board of Directors does not recommend payment of an interim dividend.
