Nation Media Group 2014 profit hits Sh3.6 billion

Nation Media Group (NMG) has announced a Sh10 per share dividend payout to shareholders.

NMG said on Monday its profit before tax increased to Sh3.62 billion in 2014 compared to Sh3.59 billion reported in 2013.

During the year, NMG incurred a one-off expense of Sh230 million attributed to writing off analogue broadcasting equipment and the company’s old press machine, which is being replaced this year.

Adjusting for the one-off items, the underlying results were in line with the overall market’s economic performance.

The group is in the process of installing a Sh2 billion state-of-the-art printing press to improve the quality of newspapers and increase pagination. The group recorded an annual turnover of Sh13.4 billion, at par with 2013.

“The revenues were impressive given that we are comparing with 2013, which was a political year,” said Group Chief Executive Officer Linus Gitahi.

Election years ordinarily earn media houses more revenue due to increased advertising by political parties and the electoral agencies.

The management disclosed its cash position had remained strong at Sh3.5 billion, even after substantial payments for the press machine had been made.

The group’s other income, which includes interest gained from its cash holdings, grew by 43.6 per cent to Sh500 million.

“The press will be commissioned in the last quarter of this year following completion of the press hall,” said NMG chairman Wilfred Kiboro.

NMG also invested in distribution in Tanzania’s Lake Zone region, which was receiving print editions late.

“Mwanza in Tanzania used to receive papers at 3 pm so we invested in distribution so that they get their copies at the same time as Dar,” said Mr Gitahi.

NMG publishes the Daily Nation, The EastAfrican, Taifa Leo and the Business Daily newspapers in Kenya and also owns two radio stations, Nation FM and QFM, and two TV stations, NTV and QTV.

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

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

The Business Daily recorded an 85 per cent jump in operating profit on the back of a 10 per cent increase in revenue.

Regional newspaper, The EastAfrican which celebrated its 20th anniversary last year grew its profit by seven per cent after an equivalent growth in revenue.

The paper is encountering challenges in the Tanzanian market where its circulation has been halted by the government. The management, however, said it is in discussions with the Dar government to reinstate is circulation.

The television division also recorded revenue growth of 23 per cent on the back of investment in new programmes such as Pendo, Pray and Prey, and Auntie Boss.

NTV Uganda also recorded profit growth following a seven per cent increase in advertising revenues.

Kenya’s Easy FM re-branded to Nation FM in line with a change in programming policy to attract mature and discerning listeners looking out for news, current affairs and entertainment.

Mr Kiboro reassured investors that the recent closure of its TV following a row with the regulator over digital migration was not going to impact the company’s bottom line given that TV contributes only about five per cent of its profits.

He disclosed that the station was set to be self-carrying throughout the country in a month’s time following allocation of transmission sites by the regulator.

“The Group outlook for 2015 is positive, with the commissioning of a new state-of-the-art printing press later in the year as well the benefits expected to accrue from resolution of the impasse on migration to digital television signal distribution which will unlock significant business opportunities in the new order. The board is cautiously optimistic of achieving good results in 2015.”