admin
Oliver Kazunga Senior Business Reporter
THE Zimbabwe Newspapers Group has recorded an operating profit of $1.8 million in the first half of the year compared to a $1 million loss in the corresponding period in 2014.
In a statement accompanying the group’s unaudited financial results for the six months ended June 30, 2015, board chairman Delma Lupepe said the cost containment measures being instituted by Zimpapers had started bearing fruit.
“The company embarked on cost containment measures that have started to bear fruit as an operating profit of $1.8 million was recorded for the period under review compared to an operating loss of $1 million posted in the same period last year,” he said.
He said the group’s finance costs remained high at $700,000 due to high interest rates prevailing on the market.
Lupepe said Zimpapers was in discussion with its bankers to reduce the cost of borrowing in line with the mid-term monetary policy statement announced by the Reserve Bank of Zimbabwe.
“Profit before tax was $1.1 million compared to a loss of $1.9 million for the same period last year. The board and management continue to focus on streamlining cost structures for the business to align with the level of generated revenues.
Following the decline in newspaper copy sales and advertising volumes in the traditional market, Lupepe said revenue of $19.95 million, which was five percent adverse to $21.01 million recorded during the same period in 2014 was realised in the first half of this year.
“In line with the reduction in sales revenue, a five percent decline in gross profit to $15.5 million from $16.2 million recorded during the same period last year was posted,” he said.
Lupepe also indicated that liquidity challenges experienced during the first half of the year affected the group’s customers’ ability to timely service their accounts.
As a result, this saw a 37 percent increase in trade and other receivables.
He said:
“Stringent collection measures are being instituted and focus will also remain on cost containment strategies while vigorously exploring new revenue streams to mitigate the challenges faced by the traditional products in response to the economic environment.”
Turning to the group’s newspaper division, Lupepe said it recorded an operating profit of $1.4 million before finance costs compared to a loss of $25,000 for the same period last year.
He said during the period under review the newspaper division performed relatively well despite increasing competition and the harsh economic environment.
Zimpapers’ newspaper division commands a 67 percent market share for print copy and advertising.
“The division,” said Lupepe, “is also adopting new technologies to fully exploit opportunities being offered by new media expectations, in order to arrest possible revenue loss through migration of readers from print to digital platforms.”
On the commercial printing division, he indicated that during the period under review, it reduced operating loss before finance charges to $120,000 compared to a loss of $710,000 for the corresponding period last year.
The broadcasting division, Lupepe said recorded an operating profit before finance charges of $190,000 compared to a loss of $290,000 for the same period in 2014 adding, “The division’s performance is steadily improving as it continues to establish its brand in the radio broadcasting market.”
Going forward, the group remains confident about its performance on the back of the recapitalisation that it undertook and the alternative initiatives being undertaken underpinned by Zim-Asset.
Online Reporter