Zimpapers revenue jump defies setbacks
Diversified media group Zimbabwe Newspapers (1980) says revenue across all operational divisions grew by 56 percent to $3,4 billion in 2021 from $2,2 billion the prior year.
Mr Tommy Sithole, the group’s chairman, said the growth in turnover was achieved despite setbacks such as the negative impact of Covid-19, high inflationary pressures and declining disposable incomes.
“All the operational divisions of the group recorded revenue growth led by the Broadcasting Division that had an 81 percent growth followed by the newspapers at 56 percent and 34 percent for the Commercial Printing Division,” he said in a statement of financial results for the year ended December 31 2021.
He said in line with the revenue growth, gross profit increased 53 percent to $2,2 billion compared to $1,4 billion in 2020.
Mr Sithole said due to a high operating cost base, the net profit margin before financing costs, exchange gains and monetary adjustments declined to 9 percent compared to 12 percent for the same period last year.
“Major cost increases were incurred on raw material supplies and general operating costs such as administration, selling and distribution as they were increasing in line with inflation.”
Mr Sithole noted that the company increased the use of its borrowing facilities to fund the increased cash requirements of the business in line with growth plans.
“This resulted in a high interest cost bill for the period under review,” he said. During
the year under review, net profit before tax improved by 498 percent to $144 million
compared to prior year driven by a lower monetary loss when compared to prior year. In
terms of divisional performance, the Newspaper Division growth in top line was driven
by volume recovery on both circulation and advertising coupled with advertising price
reviews to protect the company’s profit margins.
“In line with the revenue growth, the division’s profit for the period under review also
went up by 53 percent and the growth was a result of better cost management that was
meant to protect the company’s profit margins in a volatile operating environment.”
At the group’s Commercial Printing Division, despite the 34 percent increase to $602,7
million, net profit declined by 29 percent to $43,6 million on account of local sourcing,
as foreign currency availability on the formal market was limited. There were also
increased costs on plant maintenance to ensure better operational efficiencies.
“Management is pursuing strategies to improve the generation of foreign exchange
through increased exports,” he said, adding that, in line with this thrust, the division is
participating in an improved foreign currency retention scheme introduced by the
Reserve Bank of Zimbabwe (RBZ).
The Broadcasting Division’s revenue at $645,2 million was driven by both radio and
television broadcasting services that recorded 71 percent and 123 percent respectively
owing to high set up costs associated with the television channel as the company
prepares to get ZTN channel on air.
Mr Sithole noted that as the group prepares to launch the television channel, focus will
remain on ensuring improved customer service across the group and fine tuning product
offering to meet the growing needs of the wide customer base.
According to Mr Sithole, the period under review saw a positive change in the media
environment, which is likely to be carried into 2022.
He said globally, there were signs that mainstream media platforms were regaining the
trust of the audiences, who now understood the value of fact-based and fact checked
journalism.
“The Covid-19 period, dominated by misinformation and conspiracy theories on social
media, helped audiences differentiate between sources of verified and unverified
information.
“According to the Reuters Institute 2021 Report, the value of such information became a
matter of life and death and it is projected that media organisations will continue to
leverage on this appetite for trustworthy information to achieve growth,” said Mr
Sithole.
The Zimbabwe All Media and Products Survey (ZAMPS) report for the send half of 2021
released in February this year showed that there was all round audience growth for
established media platforms.
Mr Sithole said the year 2021 closed with the Government’s media reform agenda at an
advanced stage. However, the Zimpapers chairman said the Media Practitioners Bill was
yet to be concluded. “The issue of co-regulation of the media remains under discussion,
with indications that there could be an agreement on the need to continue with statutory
regulation by the Zimbabwe Media Commission and self-regulation by the Voluntary
Media Council of Zimbabwe.”
Mr Sithole said the group continued to take advantage of opportunities in the digital
media space as it adapts and fully embraces the fast changing technical environment.
“The 360-degree fully integrated media house strategy where content is accessed on all
platforms continues to be a source of competitive advantage as it takes care of all
customers’ needs.”
He noted that the rolling out of 5G services in Zimbabwe already has the company
working on delivering content and services on new and improved platforms that are
optimised for the new enhanced mobile broadband era.
“The company is focusing on futuristic platform building and acquisitions that allow for
agile adaptation to the changes in technology in order to maintain a good and
uninterrupted customer experience,” said Mr Sithole.
Meanwhile, in line with the group’s dividend payment policy, the board recommended
the payment of a dividend of $0,0387 per share.-The Herald
