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Business Reporter

Integrated media house, Zimpapers (1980) Limited, posted a solid set of numbers for the year to December 2020, with the topline growing to $1,34 billion despite the impediments imposed by the Covid-19 pandemic.

The group sidestepped significant challenges in the macro-economic environment such as inflationary pressures and the Covid-19 pandemic to drive revenue up.

Said group chairman Tommy Sithole in a statement accompanying the full year results: “The operating environment remained challenged by the Covid-19 pandemic worsened by inflationary pressures at the background of declining disposable incomes and foreign exchange shortages…The media environment was tough given the impact of the Covid-19 on businesses and lifestyles, which brought about changes in consumption patterns.

The resilience of our media products was tested and confirmed standing.”

Key to the group’s resilience is the ‘Digital First’ strategy that management has been implementing even prior the emergence of Covid-19.

“The company’s business model remains premised on availing content on both the traditional and new digital platforms to ensure that content and advertising platforms are readily available for its clients,” added the chairman.

“To that end, investments in digital platforms is a key focus area for the company to allow delivery of content in audio, text and video format.”

For the year under review, Zimpapers’ revenue rose to $1,34 billion, a 3 percent increase from prior year, largely on improved revenue performance in the newspaper and broadcasting divisions.

The newspaper division recorded a 6 percent increase in revenue to $844,4 million compared to $794,9 million for 2019, although net profit for the period under review at $111,1 million slid 9 percent to $121,6 million for 2019.

The Broadcasting division’s revenue improved by 17 percent to $221,7 million compared to $189,5 million for 2019, which was largely attributable to the improved performance of the group’s nascent television station – ZTN, which recorded a revenue increase of $36 million from $19, 2 million in 2019.

The Commercial Printing Division was weighed down by Covid-19 and resultant lockdowns as schools – a primary source of business for the segment – were closed for large parts of 2020. Its revenue slid 13 percent to $279 million from the $315,8 million recorded in the prior year.

Zimpapers’ gross profit margin remained flat at 67 percent, while net profit margin from operations declined from 17 percent in previous year to 12 percent, which management attributed to “an inflationary increase in operating costs.

“The increase in operating costs was mainly driven by selling costs as the company vigorously defended its market share in the very challenging operating environment,” said the chairman.
The group recorded a gross profit of $903,7 million compared to $876,2 million for the same period last year.

Net financing cost increased to $9 million due to the increase in interest rates as well as an increase in borrowings to fund new capital expenditure projects.

Capital expenditure was mainly on the ZTN project, motor vehicles and critical maintenance projects amounting to $73,1 million compared to $59,6 million for the prior year.

The group’s bottomline was, however, affected by a monetary loss of $147 million.

In historical terms the company posted a net profit before tax of $147,9 million compared to $23.9 million for same period last year.

During the year 2020, the board declared an interim dividend of 2 cents per share in September 2020. The dividend was paid on 18 December 2020. On the basis of a need to re-invest in the business the board has not declared another dividend for the final period.