NMG profit hits Sh3.6 billion

The Nation Media Group has announced a dividend payout of Sh10 per share following a 7.4 per cent increase in last year’s operating profit.

NMG said yesterday its operating profit increased to Sh3.8 billion, compared to Sh3.5 billion reported in 2013.

The group recorded an annual turnover of Sh13.3 billion. “The revenues were impressive given that we are comparing with 2013, which was a political year,” group chief executive Linus Gitahi said.

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

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

STATE-OF-THE-ART MACHINE

The group is in the process of installing a Sh1.5 billion state-of-the-art printing press to improve the quality of newspapers and increase pagination.

The management said its cash position had remained strong at Sh3.4 billion, even after final 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 pressing hall,” group chairman Wilfred Kiboro said.
Invested in printing press

NMG also invested in a printing press in Tanzania’s Lake Zone region which was receiving print editions late.

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

NMG publishes the Daily Nation, The EastAfrican, Taifa Leo, and the Business Daily newspapers in Kenya and also owns two radio stations, Easy 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, the Monitor Telephone Directory, 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 East African which celebrated its 20th anniversary last year, grew its profit by seven per cent after an equivalent growth in revenue.

The expansion was in spite of encountering challenges in the Tanzanian market where its circulation has been stopped by the government. The management, however, said it is in discussions with the Dar authorities to reinstate circulation.

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

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

REBRANDED TO NATION FM

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 on 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 said 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.”