Nation returns 23pc profit growth


Mr Wilfred Kiboro, the chairman of the Nation Media Group Ltd, with Prof Olive Mugenda, a board member, during the investor briefing at Serena Hotel yesterday. Stephen Mudiari

The Nation Media Group (NMG) nearly doubled its interim dividend payout after growing its profit before tax by 23.4 per cent in the first half of the year.

East Africa’s largest media house said its shareholders will earn an interim dividend of Sh2.5 per share, up from the Sh1.5 it paid in the first half of last year.

Wilfred Kiboro, who chairs the company’s board, said robust sales growth across the group’s business lines had pushed its half-year profit before tax to Sh1.3 billion up from Sh1.1 billion the previous year.

Mr Kiboro said NMG’s sales revenues or turnover grew 13.5 per cent to Sh5.8 billion from Sh5.1 billion in a similar period the previous year.

That translated to a net income of Sh915.1 million in the six months to June compared to Sh747 million in a similar period the year before.

NMG’s share has gained 24 per cent in the past six months in what analysts see as a mark of investor confidence in the company’s prospects.

Mr Kiboro said a reduction in the price of newsprint — one of the major cost centres for the company — to an average of $670 per tonne in the period under review from $700 per tonne last year, easing the management of operational expenses.

The cost of newsprint itself benefitted from the strengthening of the Kenya shilling and a steady decline in the rate of inflation during the period under review.  

NMG’s chief executive Linus Gitahi said all the company’s platforms, including print, broadcast, and digital had posted operating profits growth – led by NTV Uganda with an eight-fold growth.

The Nation Newspapers Division — the mainstay of the business — recorded a 13 per cent and nine per cent growth in circulation and advertising revenue respectively.

The Business Daily, the group’s youngest publication, recorded a 190 per cent growth in operating profit helped by the growth of advertising and circulation revenue by 20 per cent and 18 per cent respectively.

NMG, whose cash holding rose from Sh3.2 billion to Sh3.8 billion in the first six months of the year, also benefitted from high interest paid on its bank deposits, Mr Gitahi said.

The group will be seeking new investment opportunities in the East African market in the near term citing Tanzania where it plans to launch a TV station to add on to its print titles, Mr Kiboro said.

“The management continues to undertake initiatives that will enable us to take full advantage of the regional economic environment to ensure NMG’s market leadership continues to grow,” he said.

NMG recently acquired Dembe FM in Uganda and opened a new radio station (K FM) in Rwanda where it has also introduced a country-specific pull-out magazine in its regional business news platform The EastAfrican.

In Kenya, NMG recently launched QTV, a mass market Kiswahili television station that has gained a five per cent market share in three months.

The company has also launched a money transfer service called ‘NationHela’ targeting the multi-billion-shilling remittances from Kenyans in the diaspora. The product is backed by Diamond Trust Bank (DTB).

Mr Gitahi said the new investments give the company a firm footing on the road to growth in the coming years.

“These investments are part of our on-going innovation that will help us to maintain the growth momentum going forward,” he said.

Mr Gitahi said the management was cautiously optimistic that NMG will meet its target for the full year ending December, citing improved macroeconomic conditions such as falling inflation and bank lending rates.

The decision to hold the general election in March next year is, however, expected to slow down political advertising this year.

NMG trades in Tanzania through its subsidiary, Mwananchi Communications Limited, the publisher of Mwananchi, Mwanaspoti and The Citizen newspapers.

In Kenya, the group publishes the Daily Nation, The EastAfrican, Taifa Leo, and the Business Daily newspapers and runs two radio stations, Easy FM and QFM and two TV stations, NTV and QTV.

In Uganda, the company operates the newly acquired Dembe FM, NTV Uganda, while its subsidiary, Monitor Publications, publishes The Monitor and the Monitor Telephone Directory and operates KFM radio station.

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