Strong Growth in Revenue Boosts Nation Media Group Half-Year Profit to Sh892 Million
Nation Media Group recorded a 51.6 per cent growth in pre-tax profit for the six months ending June 30, 2010, lifted by strong growth in revenue, low cost of newsprint and cost management.
Pretax profit increased to Sh891.6 million from Sh588.2 million it reported in the same period last year.
"We have had an exceptionally good first half of the year," Group Chief Executive Officer Linus Gitahi told investors at the Norfolk Hotel. "All factors constant, we expect to have a reasonably better full-year performance."
During the period under review, turnover grew by 17.3 per cent from Sh3.8 billion to Sh4.5 billion this year on the back of strong performance by its subsidiaries in Kenya, Uganda and Tanzania.
Gitahi said Nation Newspaper Division revenues grew by 14 per cent due to a 20 per cent increase in advertising revenue, resulting in a 36 per cent growth in operating profit.
Revenues at Monitor Publication in Uganda grew by 5 per cent as distribution costs dropped by 3 per cent.
"We will continue to invest in the business to tap into its full potential because it is the biggest independent daily newspaper in Uganda," he said.
NTV Uganda, which now covers 80 per cent of the country, increased revenue by 60 per cent, while operating profit jumped by 150 per cent.
Mwananchi Publications performed well in the Tanzanian market, with advertising revenue rising by 29 per cent, circulation revenue by 32 per cent and operating profit by 128 per cent.
"Our investment in the new printing press has paid off as Mwananchi recorded a profit for the first time," said Gitahi, reiterating that the company's plans to list its shares in Tanzania, Uganda and Rwanda were still on course.
Online advertising revenue grew by 48 per cent, a sign of the fast-growing new media.
"It is an area we are investing in because it is the future of media and we want to consolidate our leadership in it," he said, "but much of our investment will be in terms of manpower."The directors declared an interim dividend for the half-year of Sh1.50 per share.Nation's share closed at Sh142 at the Nairobi Stock Exchange on Monday.
In Kenya, NMG owns the Daily Nation and Sunday Nation, The East African, Business Daily and Taifa Leo, two TV stations (NTV and recently acquired e-Africa) as well as two radio stations, easyfm and QFM.
It owns the Monitor, NTV Uganda and Kfm radio in Uganda, and Mwananchi Publications in Tanzania, which publishes the English newspaper Citizen and Kiswahili daily Mwananchi.