Oliver Kazunga Senior Business Reporter
DIVERSIFIED media group, Zimbabwe Newspapers (1980) Limited (Zimpapers) maintained strong performance after its revenue jumped 68 percent to $5,2 billion in the half-year to June 30, 2022 buoyed by volume recovery across operating divisions.
In the corresponding period last year, the group’s revenue amounted to $3,1 billion.
Zimbabwe’s largest integrated and only listed media house operates newspaper, commercial printing and broadcasting divisions.
In a statement accompanying financial results for the period under review, Zimpapers board chair Mr Tommy Sithole said the group had been on a digital transformation journey, investing in the required tools and skills to cater for both local and global customers.
He said the available media distribution technology for digital newspapers and online radio streaming enabled Zimpapers to get insights into customer needs, thereby equipping it with the required business intelligence to provide improved products and services.
The transformation towards digital media has seen improvements on existing digital platforms, bringing value-added products and services to the group’s clients and customers.
“The revenue for the company increased by 68 percent to $5,2 billion during the period under review when compared to $3,1 billion for the same period last year.
“The growth in revenue was supported by volume recoveries across the operating divisions of the company.
“Despite the gross profit margin remaining flat at 69 percent, as recorded last year, net operating profit before interest, exchange loss and monetary adjustments improved to 17 percent compared to 14 percent for the same period last year,” said Mr Sithole.
This, he said, was a result of better cost management although the operational cost savings were eroded by increased interest costs and exchange losses resulting in a net profit margin remaining flat at 13 percent.
Mr Sithole said interest costs increased due to high borrowings to fund new projects while exchange losses arose from exchange rate depreciation, coupled with late payments to foreign raw material suppliers.
“In absolute terms, net profit before tax and monetary adjustments, increased by 63 percent to $639 million compared to $391 million for 2021.
“A monetary loss of $353 million compared to $7 million for prior year, was recorded owing to the hyperinflationary environment.
“This reduced the company’s net profit before tax to $287 million compared to $384 million.”
Commenting on the newspaper division, Mr Sithole said the division recorded 67 percent revenue growth to $3,5 billion compared to $2,1 billion in the same period last year driven by volume recoveries.
The division’s advertising volume increased by 24 percent while newspaper circulation went up by six percent resultantly, a 120 percent growth in operating profit to $813,4 million was recorded by the division compared to $368,9 million for last year.
Turning to commercial printing, the Zimpapers chairman said the group registered a strong volume growth of 45 percent, driven by labels that grew by 48 percent.
In line with the volume growth, revenue for the division increased by 58 percent to $764,9 million compared to $485 million in 2021.
During the period under review, the division recorded significant growth in operating profit to $77,4 million compared to $6,5 million for the same period in the prior year.
The radio broadcasting division’s revenue improved by 75 percent to $973,3 million compared to $555,5 million during the same period last year.
“The revenue growth was supported by a 14 percent volume growth and price recoveries. The radio broadcasting division’s operating profit of $168,1 million was 137 percent better than the $71 million recorded for the same period in 2021.
“However, the overall division’s performance was affected by the ZTN project that is still in its infancy. The newly established ZTN channel is gaining traction on revenue generation and audiences following its launch on the DSTv platform on the 24th May 2022,” said Mr Sithole.
In the outlook, the Zimpapers board chairman expressed optimism for a better second half of the year underpinned by the resilience and recovery in the mining, construction, tourism and manufacturing sectors, among others. This has been the basis for a general economic optimism as the Government has projected a 4,6 percent Gross Domestic Product growth for the year.
“The company will continue to strengthen its product offering by improving performance of its new and old products to give better profit margins. The ZTN footprint is expected to continue growing as the unit is gaining trust from its audiences.
“The digitalisation strategy remains core to the operations and growth of the company, arising from the growing demand for digital products in the country and the world over,” said Mr Sithole.