Nation Media Group keeps full-year dividend level but profits lag

Tuesday March 22 2016

By GEORGE NGIGI
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The Nation Media Group has maintained its dividend payout at Sh10 per share despite reporting a 9.7 per cent drop in annual profits, underlining management’s optimism about the company’s performance this year.

Nation Media Group's (NMG) full-year earnings dropped to Sh2.2 billion from Sh2.5 billion a year earlier, following significant disruption of its TV business during a turbulent migration to digital broadcasting that caused a month-long shutdown of TV stations in a stand-off with the regulators.

NMG chairman Wilfred Kiboro said the board of directors had decided to keep the dividend at last year’s level as a demonstration to shareholders that their investment is alive and continues to produce good returns.

“Despite profit after tax dropping, the board is very upbeat that the company is on very solid grounds and decided to maintain the dividend where it was last year,” said Mr Kiboro.

The board’s optimism is pegged on adjustment of a one-off Sh627 million expense incurred during the year and which is not expected to recur. The one-offs include writing off bad debts of Sh192 million and Sh132 million in foreign currency depreciation.

The company also took a hit from exchange rate turbulence that affected its Uganda, Tanzania and Rwandan subsidiaries where local currencies suffered significant battering against the US dollar.

DIGITAL SPACE

Joe Muganda, NMG's chief executive officer, identified the digital space as a key area of growth for the media house, which already has the largest digital footprint in the region and which it seeks to optimize.

“Our digital profits, though small, grew by more than 200 per cent over last year and we expect its revenues to constitute eight to 10 per cent of our total revenues in the near term,” Mr Muganda said during the company’s investor briefing.

The media house has more than six million followers on Facebook, 2.6 million on Twitter and 106,000 on Instagram.

Circulation of the group’s regional paper The EastAfrican in Tanzania resumed early this year, after a year-long ban, further boosting the company’s outlook.

NMG, the largest media group in East and Central Africa, benefitted from its regional operations, which posted significant growth largely driven by the Tanzanian business that rode on the country’s election coverage in the second half of the year.

NMG has launched Spark TV in Uganda to run along NTV Uganda in a bid to grow its market share.