19 April 2018

East Africa: Nmg Defies Tough 2017 to Retain Sh10 Dividend

Nation Media Group (NMG) maintained its total dividend payout at Sh10 per share for the sixth year in a row after weathering a tough 2017 -- that was characterised by weak macroeconomic conditions and challenging trading environment -- to produce a solid outcome.

Wilfred Kiboro, company chairman, said the NMG had shown resilience in a challenging environment marked by protracted electioneering, delays in payment, especially from government, coupled with declining circulation volumes and advertising revenues.

"The past year was definitely a very difficult year for many businesses not just for the media but across the board," Mr Kiboro said at an investor briefing in Nairobi on Wednesday.

"We are happy to maintain that dividend because we think we have a strong cash position and we do think that cash rightfully belongs to the shareholders."

The NMG posted KSh1.35 billion profit after tax in the year ended December 31,2017 compared to Sh1.63 billion in the same period last year, a 17.4 per cent decline.

The company's turnover for the period stood at Sh10.6 billion compared to Sh11.3 billion in 2016, a 6.2 per cent decline.

NMG's broadcast units, NTV Kenya and NTV Uganda, separately saw their revenue surge, buoyed by strong programming and production of content that is popular with audiences.

NTV Kenya posted a 12 per cent growth in revenue while NTV Uganda's revenue rose five per cent.

NMG's digital business' contribution to the group's operating income grew from 1.5 per cent in 2015 to four per cent in 2017, as the firm aggressively leveraged on its flagship portal -- www.nation.co.ke -- and other digital assets to monetise online audiences.

Lifestyle magazine KenyaBuzz -- where NMG acquired a 51 per cent stake in 2015 -- saw its circulation and online audiences more than double, lifting the operating profit.

Daily Nation, The East African, Business Daily and Tanzania's Citizen and Mwananchi newspapers posted a drop in their revenue and operating income.

Mr Kiboro said the NMG is not on sale and expressed confidence that the company would perform even better this year, on the back of new and diversified revenue streams.

He said the NMG would continue to ramp up investments in its digital platforms as it seeks to transform into a modern 21st-century digital company.

Acting group chief executive Stephen Gitagama said a diversified business strategy would win the NMG new advertising revenue and shore up the company's growth.

Last year, the group launched a number of innovations such as KenyaBuzz ticketing, Nation News App, a new SMS-based prize competition called Angukia Chapaa, a health magazine in the Daily Nation, Apple news format and Nation chatbot.

"We will diversify our revenue streams while protecting our legacy income, which is our cash cow," said Mr Gitagama.

Mr Kiboro urged the government to honour its outstanding debt obligations with the NMG.

"The amount of money the Kenyan government owes the media industry is now getting out of hand. I think for Nation Media Group, it has ballooned to Sh700 million," he said even as he affirmed that NMG would remain steadfast in sticking to the core values of journalism.

"Nation Media group was founded on the bedrock of a set of core values; to support independent voices, celebrate diversity and freedom of expression. Central to these values and the purpose of our establishment is the mission to be the trusted source of news and information, to be the media of record, to champion for the emerging young African democracies, the ordinary person and to be a voice for the rule of law and respect for human rights, including the minorities and disadvantaged groups," he said.

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