Zimpapers bets on successful recapitalisation programme

INTERGRATED media group Zimpapers is confident that the completion of recapitalisation programme will enable it to reverse the 6 percent revenue decline realised in the six months ended June 30 2014.

In the review period, revenues dropped to US$21 million on slowing newspaper sales, particularly in an economy plagued by an illiquid environment and limited foreign direct investment.

Zimpapers’ group chairman Dr Charles Utete said in a statement accompanying the interim financials the company was not focusing on retail and telecommunication companies for adverts.

However, gross profit marginally declined to US$16,2 million from US$16,5 in the same period last year due to efficient procurement of raw materials and production efficiencies brought about by the group’s recapitalisation programme.

Through its recapitalisation programme that is almost complete, Zimpapers acquired the Orient X-Cell printing press, which is now operational, and commissioned a refurbished CD102 commercial printing machine purchased from Italy for its commercial printing division, Natprint.

The commercial printing division recorded an operating loss of US$434 310 compared to a loss of US$51 654 during the same period last year as the use of obsolete machinery took its toll.

The division continues to have a healthy order book.

The newspaper division posted an operating profit of US$1,9 million before finance costs compared to US$3,1 million in the corresponding period, while the broadcasting division recorded an operating loss of US$112 660 compared to US$104 244 last year.

On the overall, the group recorded a loss before tax of US$1,9 million compared to a profit of US$503, 471 during the same period last year.

Added Dr Utete: “The finance costs were caused by the short-term borrowings that the company took to recapitalise its operations. The company had to use short-term borrowings which are expensive due to absence of long-term funds on the market, and the necessity to recapitalise as the company was operating on near obsolete which was becoming economically unsustainable.