Nation Media Group Chairman Dr Wilfred Kiboro (left) with CEO Stephen Gitagama during the company’s half year investor briefing at the Sarova Stanley on August 28, 2019. PHOTO | DIANA NGILA | NMG Nation Media Group (NMG) shareholders are set to receive an interim dividend of Ksh1.50 ($0.014) per share for the first half of 2019, despite an 8.4 per cent drop in the company’s total comprehensive income, with the board projecting a stronger performance in the second half of the year.
NMG board Chairman Wilfred Kiboro announced the dividend payout Wednesday at an investor briefing in Nairobi, where the largest media house in East and Central Africa announced that it had earned Ksh580.8 million ($5.8 million) profit before tax.
Group turnover dropped 7 per cent to Ksh4.58 billion ($45 million) from Ksh4.92 billion ($48 million) achieved in the first half of last year.
The decline in profitability was mainly attributed to the challenging business environment that saw many companies cut their advertising budgets in a period punctuated by losses, profit warnings and staff layoffs.
“We have maintained our interim dividend because of the level of confidence we have that the performance will improve in the second half of the year,” said Mr Kiboro, adding that the Group is deepening its investments in digital products to boost future returns for shareholders.
The chairman told shareholders that NMG has Ksh6.9 billion ($67 million) retained earnings, which the board will soon deliberate on the possibility of issuing bonus shares or paying a special dividend.
Richard Tobiko, the Group Finance Director, told investors the performance mirrors the rising number of Kenyan companies facing financial distress in the market.
“A lot of organisations are struggling and they are ideally our advertisers. A lot of time when firms struggle, they cut sales promotions and advertising budgets,” said Mr Tobiko.
Direct costs went up from Ksh851 million ($8.5 million) to Ksh970 million ($9.7 million) mainly driven by higher prices of newsprint in the global market. Operating costs, however, dropped by 8.5 per cent to Ksh3.03 billion ($30 million) attributed to improved productivity and efficiency.
Mr Tobiko said most of the newsprint in use during the first half were procured last year when global prices were high owing to a supply shortage. Prices have since subsided.
During the six-month period, total cash grew by 29 per cent to Ksh2.8 billion ($28 million) as a result of increased collections particularly from Government Advertising Agency (GAA) which paid […]
