New Vision Printing and Publishing Company reported a sharp drop in earnings for the year ended June 2023, dragged down by the poor performance of its recently added publishing revenue stream.
The government-controlled media group said its revenue for the period was Shs87.6bn ($23.9mn), down 21.3 per cent from the year before. This was largely due to a drop in publishing revenue to Shs7.5bn from Shs26.9bn a year earlier. Advertising revenue dropped 5.4 per cent to Shs51.2bn, while newspaper circulation sales fell 12.5 per cent to Shs11.9bn, the fifth consecutive year the income stream has receded.
The company has invested heavily in the publishing vertical in recent years, building it up as an alternative to stagnant or declining traditional revenue streams. Publishing, which relies heavily on orders from educational institutions, came from nowhere to become New Vision’s second biggest source of revenue in 2022.
The fall in revenue led to a 26.2 per cent drop in gross profit to Shs16.9bn, despite a 20 per cent reduction in cost of sales.
Last month, New Vision warned that it would post a full-year loss because its business had taken a hit from the slow pace of recovery from the Covid-19 pandemic. It cited an increase in the price of imported raw materials and “global supply chain disruptions”.
Operating expenses rose 14 per cent to Shs23.5bn due to increases in distribution costs, administrative expenses and allowances for expected credit losses. This is a reversal from the previous year when the company reduced operating expenses by 13.5 per cent.
The company reported an operating loss of Shs3.9bn, compared to an operating profit of Shs4bn in the same period last year.
Finance costs decreased by Shs1.2bn to Shs1.1bn, reflecting lower interest paid on borrowings. The company reported a loss before tax of Shs5.1bn compared to a profit of Shs1.7bn in 2022.
New Vision reported a net loss of Shs3.7bn ($1mn), its second since listing on the Uganda Securities Exchange in November 2004, and its second in three years. Last year, the company posted a profit after tax of Shs988.7bn.
Earnings per share were in the negative by Shs49.1, down from Shs12.9 last year.
The company will not be paying a dividend for the financial year following a recommendation by its directors.
