Nation Media Group (NMG) shareholders are set to earn Sh942.7 million after the company declared a dividend of Sh5 per share for the year ended December 31, 2018.
The group weathered a tough business environment across the region to post Sh1.06 billion profit after tax compared to Sh1.35 billion the previous year, a 21.8 per cent decline.
While addressing an investor briefing in Nairobi on Wednesday, board chairman Wilfred Kiboro said NMG had shown resilience in a challenging environment marked by delays in payment, especially from the government, coupled with depressed regional economies, which impacted circulation volumes and advertising revenues.
NMG’s performance was adversely impacted by its decision to discontinue government advertising from July 2018 due to delays in settling outstanding debts.
During the period, the Government Advertising Agency (GAA) and counties owed NMG about Sh1.2 billion in unpaid advertisement debt.
Notably, part of the debt amounting to Sh304 million was paid in February this year by GAA.
The group's turnover stood at Sh9.66 billion compared to Sh10.62 billion in 2017, a 9.1 per cent decline.
However, Mr Kiboro expressed confidence that the group would post a stronger performance this year, on the back of new and diversified revenue streams and an improved operating environment.
He said NMG will continue to invest in development of additional digital inventory to accelerate growth of new revenue streams to ride the wave of digital disruptions being experienced by print media platforms across the world.
The group plans to invest Sh200 million to develop additional digital inventory as part of its revenue diversification plan.
NMG digital platforms surged to 37.2 million unique monthly users in March 2019 from 32.3 million in March 2018.
“Profit is not what drives the Nation Media Group,” said Mr Kiboro.
“Profit is important, but our values and our philosophy is that we need to serve the greater good of society. However, in carrying out our mission, we have to operate sustainably as shareholders expect a positive return on their investment.”
In 2018, the group diversified into music, with the launch of Lit Music, a record label for artistes, and LIT360 product offerings that includes a TV show and a digital platform.
KenyaBuzz, an e-commerce-enabled experiential platform for movies, events and ticketing will be revamped in Kenya and rolled out to Uganda and Tanzania.
NMG chief executive Stephen Gitagama said a diversified business strategy would win the NMG new advertising revenue and shore up the company’s growth.
“We will diversify our revenue streams while protecting our legacy income,” said Mr Gitagama. “We will give our consumers highly-desirable content that fits into their worlds wherever, however and whenever they need it.”