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Tawanda Musarurwa
Diversified and listed media group Zimpapers Limited doubled its revenues in the quarter ended September 30, 2019, to $65,5 million from $32,2 million in the same period last year, despite the challenging operating environment during the period under review.

Notwithstanding the economic challenges, the Zimbabwe Stock Exchange-listed media group remains in good stead as revenue is one of the main drivers of profitability in the long-run.

The improved revenue performance had a positive impact on profitability, with the group’s profit before tax increasing by 252,1 percent to $14,0 million from $4 million, in the prior comparable period in 2018.

Gross profit margin improved by 2 percentage points to 67 percent compared to the same period last year, with management saying “improved gross profit margin was a result of better cost management due to direct procurement from the source and eliminating the middlemen in the process.”

To this extent, Zimpapers recorded a net profit before tax margin of 22 percent compared to 12 percent that was recorded in 2018.

The total assets of the group increased by 48 percent to $57,4 million due to an increase in current assets driven by an improved working capital position.

Although receivables increased in line with the nominal growth in sales, the management said it is committed to improve collections and preserve value.

In this respect, the company says several collection strategies have been put in place to drive the company’s vision on working capital management.

With regards to divisional performance, the print advertising and circulation saw their volumes during the quarter declining by 16 percent and 22 percent respectively, compared to the same period last year.

“Circulation volumes were adversely affected by cash shortages whilst the uptake of advertising space was responding to the budget streamlining by clients, owing to the obtaining economic challenges in the country,” said company secretary Mrs Daphine Tomana in a statement accompanying the results.

On a more positive note, the Commercial Printing Division recorded growth in volumes of 29 percent compared to same period last year.

The performance of the Commercial Printing Division came on the back of improved demand for the division’s products, enhanced capacity utilisation and efficiencies.

Although labels and inserts recorded 30 percent and 57 percent growth in volumes owing to improved demand, volumes for cartons and books declined by 59 percent and 5 percent, respectively.

Management attributed the decline to “stock outs” on account of foreign currency shortages.

The division, however, recorded an improvement in export performance, with labels export volumes into Zambia improving by 67 percent compared to the same period last year as the company’s products gained brand loyalty.

The Radio Broadcasting Division recorded a growth in volumes of 22 percent compared to the same period last year.

The growth was mainly driven by expansion of client base in the small to medium enterprise sector.

The group is pleased that its “digital first strategy” is starting to bear fruit as digital contributed 2 percent of revenues, which saw the television project (ZTN) chipping in with 2 percent.

Going forward, management said its key focus for the last quarter of 2019 is on cutting back volumes decline, and a number of strategies in this respect are already being implemented.

“Focus will remain on the foreign currency generation, digitalisation strategy and new projects as the Company diversifies to broaden its revenue base, whilst also focusing on maintaining the business viability of existing product offering,” added Mrs Tomana.