Severe cost-cutting helped Nation Media Group limited to stem the bleeding from an 8% fall in revenues as a tough business environment hit the region’s largest media firm.
Its two Ugandan subsidiaries were also hard-hit. Monitor Publications Limited, which publishes the Daily Monitor and Ennyanda newspapers, saw revenue drop by 20% while Africa Broadcasting Limited, the holding company for NTV and Spark TV stations, registered a 29% slump in revenue.
Both companies have felt the heat from a slowing economy and pressure on print circulation and advertising, while NTV is facing growing pressure from competitors especially after the migration to digital broadcasting platforms.
NMG’s flagship and the region’s biggest circulating newspaper, the Daily Nation, saw revenue drop by 2% while Mwananchi, its Tanzania operation retreated by 23% as the impact of a slower economy was felt across East Africa.
NTV Kenya grew 7% and Business Daily by 1% and while digital revenues grew 14% to about 3% of total group revenue, the growth was not enough to fill the hole left by a slowdown in the mainstream outlets.
After-tax profit was $16.8 million down from $22.2 million in 2015 against a turnover of $113m and $123 million respectively. The company said it had incurred one-off costs of $3.4 million in shutting down unprofitable radio and TV outlets in Kenya, restructuring staff and setting up Spark TV in Uganda.
“The underlying business is fairly strong. We have reduced our cost base,” Group CEO Joe Muganda said at an investor briefing in Nairobi, where NMG is listed. “Those costs won’t be recurring this year.”
Cost of goods sold dropped from $24m to $20m on what management said were efficiencies from a new printing press in Nairobi and improvements in the company’s distribution channels.
NMG said it would maintain its final dividend at Kenya Shs10 per share, despite a 25% drop in earnings per share, meaning that the final dividend is 112.35% of the full EPS. The company remained cash-rich at year’s end with a cash war chest of $34m, up from $30m in 2015.
Details of the financial performance of the Uganda businesses were not immediately available but Monitor Publications is believed to have pulled back from the full-year loss it suffered two years ago which prompted a change of managing directors.
While NTV Uganda remains profitable and a market leader it has struggled to put daylight between itself and upstarts like NBS TV in the prime English market, while Spark TV is yet to break even, sources say.
Mr Muganda said NMG, which also publishes The EastAfrican, as well as the Citizen and Mwanaspoti newspapers in Tanzania, would continue to focus on making money in the digital landscape as growth slows or recedes in the traditional print and broadcast industries.
“We are acquiring and creating new revenue streams,” he said at an investor briefing to release the results.
NMG is part of the Aga Khan’s Fund for Economic Development, which has extensive interests in insurance (Jubilee), hospitality (Serena hotels), finance (Diamond Trust Bank), real estate, as well as energy (including a key stake in Bujagali hydropower dam).