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Enacy Mapakame Business Reporter
Zimbabwe’s biggest diversified media group, Zimbabwe Newspapers (1980) Limited’s profit for the year ended December 31, 2018, surged 68 percent to $3,8 million compared to $2,4 million recorded in the prior year on the back of increased product range, cost containment and improved efficiency.

Earnings per share jumped 60 percent to 0,66 cents and the Group declared a dividend of RTGS$0,00131 per share.

This comes despite a challenging environment in which the company’s ability to generate advertising revenue was constrained on the back of weakening disposable incomes. Low incomes also had a negative effect on readers’ ability to buy newspapers.

The introduction of online radio stations on the market has also increased competition for the broadcasting business, while looming introduction of community radio stations will pose more competition.

The Group has, however, invested significantly in its businesses to make operations competitive in the market. An investment of $4,5 million in capital expenditure was made amid efforts to equip the business and enhance efficiencies.

Zimpapers operates several radio broadcasting stations among them Star FM, Capitalk FM, Diamond FM and Nyaminyami FM.

Gross profit rose 8 percent to $28,1 million from $26,1 million on the back of revenue growth. Resultantly, gross profit margins improved to 34,6 percent compared to 33,3 percent in the prior comparable year.

Revenue for the year jumped 10 percent to $43 million compared to $39,1 million buoyed by a 42,5 percent growth in the commercial printing division following improved capacity utilisation.

The division also commissioned an exercise book printing machine, as the group consolidates its market position.

As a result, the division recorded $7,9 million in revenue driven by increased product demand and an after tax profit of $1,2 million, representing a 23,3 percent growth on prior year.

Operational costs rose 3,5 percent to $23,1 million.

Group chairman Mr Delma Lupepe attributed the increase in operating costs to high administration costs as the group re-launched Typocrafters and increased capacity at Zimpapers Television Network as well as the Radio Broadcasting Division.

Zimpapers also revived BoldAds, which, together with Typocrafters had been shut down a few years back due to product obsolescence and challenges in operational viabilities.

“These companies have been re-modelled and refreshed to be able to compete in today’s highly technological operating environment,” said Mr Lupepe in a statement accompanying the group’s financials.

At $8,2 million, earnings before interest, tax, depreciation and amortisation (EBITDA) was 19,5 percent above prior year’s $6,8 million.

Resultantly, profit before finance charges and exchange loss and tax increased 29,7 percent to $5,8 million.

Assets marginally grew to $38,97 million from $38,180 million.

In terms of divisional operations, the Newspaper Division achieved a 3,9 percent growth in revenue to $29,5 million while its profitability jumped 27 percent to $4,8 million on improved cost management.

The Broadcasting division had a 6,6 percent improvement in revenue performance to close the year at $5,6 million on increased advertising volumes while its operating profit rose 19,6 percent.

The media industry has also been affected by the change in the country’s functional currency during the first quarter of 2019.

But management is upbeat of a recovery driven by increased efficiencies following improvements in digital infrastructure as well as the launch of ZTN.

“The company is in a new phase where the vision of becoming a fully integrated media house is now being realised as it expects to launch its television business in 2019.

“The board and management is still optimistic of recovery and therefore performance for the year 2019 will be better than what was recorded in 2018,” said Mr Lupepe.