Kenya: NMG Shareholders to Earn U.S.$9.42 Million After $10m Profit

Nation Media Group shareholders are set to earn Ksh942.7 million ($9.427 million) after the company declared a dividend of Ksh5 ($0.05) per share for the year ended December 31, 2018.

The group weathered a difficult business environment across the region to post a Ksh1.06 billion ($10.6 million) profit after tax, down from Ksh1.35 billion ($13.5 million) the previous year, a 21.8 per cent decline.

Addressing an investor briefing in Nairobi board chairman Wilfred Kiboro said NMG had shown resilience in a challenging environment marked by delays in payments, especially from the government, coupled with depressed regional economies, which impacted circulation volumes and advertising revenues.

The Group's performance was adversely impacted by its decision to discontinue government advertising from July 2018 due to delays in settling outstanding debts.

Notably, part of the debt, amounting to Ksh304 million ($3 million) was paid in February this year by the Government Advertising Agency, GAA.

The group's turnover stood at Ksh9.66 billion ($96.6 million), down from Ksh10.62 billion ($106.2 million) in 2017, a 9.1 per cent decline.

However, Mr Kiboro expressed confidence that the group will post a stronger performance this year, on the back of new and diversified revenue streams and an improved operating environment.

He said that NMG will continue to invest in the development of additional digital inventory to ride the wave of disruptions experienced by print media platforms across the world.

The group plans to invest Ksh200 million ($2 million) to develop additional digital inventory as part of its revenue diversification plan.

NMG digital platforms rose to 37.2 million unique monthly users in March 2019, from 32.3 million in March last year.

"Profit is not what drives the Nation Media Group," said Mr Kiboro. "Profit is important, but our values and our philosophy are what we need to serve the greater good of society.

"However, in carrying out our mission, we have to operate sustainably as shareholders expect a positive return on their investment."

Last year, the group diversified into music, with the launch of Lit Music, a record label for artistes, and LIT360 product offerings that include a TV show and a digital platform.

KenyaBuzz, an e-commerce-enabled experiential platform for movies, events and ticketing will be revamped in Kenya, and rolled out to Uganda and Tanzania.

Group CEO Stephen Gitagama said a diversified business strategy would bring in new advertising revenue and shore up the company's growth.

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

"We will give our consumers highly desirable content that fits into their worlds wherever, however and whenever they need it."

He added that the group had identified a Tanzanian shareholder in compliance with the regulations that require media companies to be majority-owned by locals.

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