Nation Media Group Profit Drops By 99 Per Cent To Ksh3 Million
The Group’s turnover dropped by 4.5 per cent to Ksh3.5 billion in June 2023 from Ksh3.7 billion in June 2022
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Nation Media Group (NMG) has recorded a 98.8 per cent decline in net profit from Ksh247.8 million in the 2021/2022 financial year to Ksh2.9 million in 2022/2023.
According to financial documents released on Friday, August 18, the regional media powerhouse in East Africa blamed the decline in profits on the drastic rise in the cost of imported raw materials, particularly newsprint, and the depreciation of the Kenya Shilling against the US Dollar.
The resultant incremental direct costs of Ksh179 million were absorbed by the Nation. This adverse impact was partially mitigated by reduced operating costs resulting from improved operational efficiency and increased productivity.
Nation Media Group (NMG) CEO, Stephen Gitagama. /FILE
The board also attributed weak consumer spending, a rise in the price of basic commodities, and a hike in fuel prices and interest rates, as reasons behind its profit decline.
The Group’s turnover dropped by 4.5 per cent to Ksh3.5 billion in June 2023 from Ksh3.7 billion in June 2022 while its Gross Profit declined to Ksh2.7 billion from Ksh3 billion over a similar period last year.
The NMG pre-tax profit also dropped to Ksh10.8 Million at the end of June 2023 from Ksh354 Million in H1 2022 while the firm’s earnings per share was nil from Ksh1.3 per share in H1 2022.
NMG's total comprehensive income fell to Ksh190.5 Million from Ksh219.4 Million in H1 2022 while income attributable to owners of the firm fell to Ksh176.8 Million from Ksh218.8 Million during the period under review.
The Group’s performance during the first half of this year was, however, boosted by the growth of its digital footprint which saw a rise of 14 per cent to 59.5 million users compared to 52.2 million users last year.
“We continue to focus on innovation to develop products that resonate with audiences through an experiment-driven development approach to accelerate the monetisation of our expansive digital footprint, explained the NMG Board.
The Group registered continued growth in its niche products such as the Business Daily, The EastAfrican and Taifa Leo, as a result of insightful content and partnership initiatives. Similar initiatives are being implemented for other products across the Group.
Considering the prevailing economic environment and the Group’s investment plans, the Board of Directors was revealed to have not recommended the payment of an interim dividend.
NMG's decline in profits comes amidst efforts to reduce the population of its workforce in an effort to cut down its payroll and strengthen its position in the digital space, in a fresh mass-firing exercise that commenced following a staff meeting held at Nation Centre in the Nairobi Central Business District (CBD) on Tuesday, June 27.
The meeting was also attended virtually across the bureaus whereby NMG's top management was targeting the laying off of a number of reporters and editors in newsroom changes to a truly converged operation.
NMG Editorial Director, Joe Ageyo, who addressed the meeting, had revealed that the media house shifted to a centralised newsdesk for all stories across newspapers, TV and Radio as part of a new business strategy towards a converged and centralised newsroom. This is a move that aims at the media house only publish and air stories that have passed the quality threshold.
According to a screenshot of the meeting seen by Viral Tea, some of the roles that were to be made redundant in the new structure include revise editors, reporters, online video producers and magazine editors, a move that could leave a number of journalists holding those roles redundant.
In turn, new positions arose from the new style of operations with the media house revealed to be recruiting for six posts; that is chief production editor (video and audio), lead coder, native content editor, audience analyst, social media analyst, and data visualizer.
Viral Tea was yet to independently determine if the media house followed through with its firing plans and how many journalists have been made redundant since the announcement.
