Zimpapers posts inflation beating interim results
Integrated media house, Zimpapers (1980) Limited, posted inflation beating financial results for the half year ended June 31, 2021 and expects to leverage on disruptive innovation going forward.
The media group, which counts broadcasting, newspapers and commercial printing among its business divisions, recorded a 538 percent growth in revenue (in historical terms) beating the annual inflation rate for the period under review of 106,6 percent.
In inflation adjusted terms, the Group still managed to double its revenue after recording a 101 percent growth to $1,066 billion from $530 million prior year comparative.
Of this revenue, the newspaper division contributed $709 million after recording an inflation adjusted growth of 132 percent, up from $306 million prior year comparative.
In line with the improved revenue performance, the newspaper division recovered from a loss position reported in 2020 to a profit of $126,5 million.
The broadcasting division followed with a revenue contribution of $190,5 million after recording a 129 percent growth.
The division’s operating profit improved by 441 percent to $10,3 million “due to better revenue performance and cost optimisation.”
The commercial printing division was the least performer but still recorded inflation adjusted revenue growth of 18 percent to $166,4 million. Profitability for the division was, however, a marginal $2,2 million down from $28 million prior year comparative as costs increased at a faster pace than revenue.
Commenting on the overall performance, group chairman Mr Tommy Sithole, attributed the plausible revenue growth to both volume and price recoveries that were recorded during the period under review.
Growth in revenue filtered down to profit margins with the company’s gross profit margin improving to 69 percent from 59 percent in inflation adjusted terms.
Sithole said gross profit margin improvements were a result of better revenue performance and cost optimisation on raw material procurement practices.
Costs as a percentage of revenue were reduced to 56 percent from 60 percent prior year comparative despite the Group paying $21,1 million in finance cost up from $1,7 million prior year.
The group has long term borrowings of $70 million at a prevailing interest rate of 45 percent per annum, payable over three years. Short term borrowings amount to $35,6 million.
These cost cutting measures resulted in EBITDA margins, in hyperinflation terms, improving to 20 percent compared to 17 percent reported prior year comparative.
This helped the company overturn a loss before tax of $67,5 million into a profit before tax of $131,8 million.
This further filtered to the bottom line with the group reporting a 117 percent growth in inflation adjusted profit after tax to $98 million compared with $45,1 million prior year comparative.
Basic earnings per share in inflation adjusted terms increased to 17,02 cents up from 7,83 cents prior year comparative.
However, the group did not declare a dividend but instead focused on reinvesting in the business ahead of ZTN launch and further capacitation of the Commercial Printing Division where it aims to invest in a third printing press.
Going forward, Mr Sithole said the group will focus on strategic initiatives that will ensure the survival of the Company.
This would be through disruptive innovations and initiatives that improve product portfolio in the wake of the Covid-19 pandemic.
“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 Sithole.
Zimpapers also expects to go live on its television station before end of the year in line with the requirements of the Broadcasting Authority of Zimbabwe (BAZ). — www.ebusinessweekly.co.zw.
