Chronicle Editor
Sikhulekelani Moyo, Business Reporter
THE country’s largest integrated media group, Zimbabwe Newspapers (1980) Limited (Zimpapers) recorded $3,4 billion inflation adjusted revenue for the full year period ended 31 December 2021, a 56 percent jump from the prior comparable period.
All the group’s divisions — broadcasting, newspapers and commercial printing — garnered positive performance resulting in a combined $2,2 billion gross profit, which accounts to a 53 percent increase.
The board has since declared a dividend of $0,0387 per share payable in full to all the shareholders by Friday 27 May 2022.
The newspaper division increased its top line by 56 percent, driven mainly by the volume recovery on both circulation and advertising, coupled by advertising price reviews to protect the company’s profit margins, chairman, Mr Tommy Sithole, said in a statement accompanying the group’s financial results.
He said the broadcasting division secured 81 percent jump in revenue to $645,2 million, driven by both radio and television services that recorded 71 percent and 136 percent respectively.
However, the division’s profit was chewed by high set up costs associated with the television channel as the company prepares to get the ZTN television channel on air.
Despite the 34 percent jump in revenue to $602,7 million recorded by the commercial printing unit, the board chairman said the division’s net profit dropped by 29 percent to $43,6 million on account of local sourcing as foreign currency availability on the formal market was limited.
The division also incurred steep costs on plant maintenance as it sought to ensure better operational efficiencies.
“In a challenging operating environment characterised by the negative impact of Covid-19, high inflationary pressure and declining disposable income, the company recorded a revenue growth of 56 percent in inflation adjusted terms,” said Mr Sithole.
“To that end, revenue of $43,4 billion was recorded compared to $2,2 billion for the same period last year.
“All the operational divisions of the group recorded revenue growth led by broadcasting division that had 81 percent growth followed by newspapers at 56 percent and 34 percent for the commercial printing division.”
He said management was pursuing strategies to improve the generation of foreign currency by the printing division through increased exports.
In line with this thrust the unit is also participating in improved foreign currency retention scheme introduced by the Reserve Bank of Zimbabwe.
Owing to a high operating cost base, Mr Sithole said the net profit margin before financial cost, exchange gains and monetary adjustment declined to nine percent compared to 12 percent for the same period last year.
Major increases were incurred on raw material supplies and general operating cost such as administration, selling and distribution as they were increasing in line with inflation.
“The company increased the use of borrowing facilities to fund the increased cash requirements to the business in line with the plans. This resulted in high interest cost bill for the period under review,” said Mr Sithole.
On outlook, the board chair said Zimpapers was on course to launching its television channel while focused on improving customer service across the group and fine-tuning product offering to meet growing needs of the wider business base. — @sikhulekelaniM1
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