Zimpapers re-stated results show profit
Listed media group, Zimbabwe Newspapers’ results for the interim to June show the group recorded strong growth in profit instead of a previously reported loss position.
The group’s financial statements republished on Tuesday show corrected taxation error which reflected income tax expense of $1,14 million instead of the correct position of income tax credit of $834 000. Zimpapers accounts published in June showed negative total income of $20 146 due to the effect of the $1,14 million tax expense, instead of tax credit of $834 163.
Further, erroneous financial accounts published last month showed deferred tax for the interim of $5 039 260 when the correct deferred tax should be $3 090 448.
“Following the detection of a material tax error after publication of the group’s June 2015 financial results, the board, in consultation with the Zimbabwe Stock Exchange has decided to republish the group’s financial results for the half year to June 2015 for the benefit of the stakeholders,” said chairman Mr Delma Lupepe in fresh accounts.
Profits grew despite the fact that revenue from copy sales and advertising volumes in traditional newspaper market fell by 5 percent to $20 million in the interim. In line with the decline in revenue was gross profit, which also fell 5 percent to $15,5 million.
Operating profit recovered to $1,8 million from an operating loss of $1 million while before tax profit leapt to $1,1 million from a loss of $1,9 million in the same period last year
The group’s total comprehensive income stood at $1,9 million from $1,4 million in the comparative period last year after accounting for $834 000 income tax credit.
“Stringent collection measures are being instituted and focus will also remain on cost containment strategies while vigorously exploring new revenue streams to mitigate challenges faced by traditional products in response to the economic environment,” he said.
The chairman said persistent liquidity challenges during the first half of the year affected customers’ ability to timely service their accounts with Zimpapers.
However, the newspaper division recorded operating profit of $1,4 million before finance costs compared to a loss of $0,025 million over the same period last year. “The division performed relatively well despite the increasing competition and the harsh economic environment and still commands a 67 percent market share for print copy sales and advertising,” Mr Lupepe said.
The commercial printing division reduced its operating loss before finance charges of $0,12 million compared to a loss of $0,71 million in same period of 2014.
Mr Lupepe however said the media industry has not been spared from the challenging economic environment with the main challenge for the group being to remain relevant in the volatile media fraternity.
This, together with the growth of digital platforms and free online content have negatively affected print copy sales, resulting in other media companies shutting down or stopping publishing non performing titles.
Zimbabwe continues to experience subdued economic activity, the major challenge being the tight liquidity constraints, leading to shrinking of formal market.
Mr Lupepe said Zimpapers will ride on the combination of its popular brands, exclusive markets, attractive digital platforms and good content delivery for growth. He said the group was optimistic about the future given the capital injection into operations and Government initiatives under its Zim-Asset policy.