Ashly DhaniNelson Gahadza
Zimbabwe Newspapers 1980 Limited, the country’s largest integrated media group’s revenue for the interim period to June 30, 2023, grew by 59 percent to $40,7 billion compared to $25,6 billion for the same period last year, largely driven by revenue growth across all strategic business units.
Group chairman, Tommy Sithole, commenting on the financials, said the group’s divisions — newspapers, commercial printing and broadcasting, achieved solid turnover growth supported by a stable media environment.
“Performance for the second half of the year is expected to be better than the first half, as the second half is the peak period for the business and the company will continue to strengthen its product offering by improving the performance of its new and old products to give better profit margins,” he said.
For the period under review, the newspaper division recorded 38 percent revenue growth to $23,6 billion, compared to $17,1 billion for the same period last year.
However, Sithole said owing to a high cost base arising from inflationary pressures and low volume performance, the business profit margin of 2 percent was lower than 23 percent for the same period last year.
“Resultantly, net profit before interest, exchange and monetary adjustments of $439,0 million was recorded compared to $3,9 billion for last year,” he said.
The group’s Commercial Printing Division recorded strong revenue growth of 116 percent to $8,2 billion compared to $3,8 billion for the comparable period in 2022, mainly driven by improved cartons and general jobs’ volumes.
Sithole said despite the significant revenue growth, raw materials, repairs and maintenance costs increased by a significant margin, resulting in the business recording a modest profit margin of 2 percent compared to 10 percent for 2022.
The Radio Broadcasting division’s revenue for the half-year period improved by 85 percent to $8,9 billion, compared to $4,8 billion for the same period last year.
Sithole said the radio broadcasting division’s operating profit before interest, exchange gain or loss and monetary adjustments of $508.4 million, was weighed down by the losses from the start-up television broadcasting segment.
“We are confident that the ZTN channel will turn around the corner in the near future and start positively contributing to the division’s profitability as the channel is gaining popularity and building a strong audience base,” he said.
However, group gross profit margin for the period under review was reduced to 56 percent compared to 69 percent in the prior year, the same period comparable, owing to a high cost of sales base arising from raw material and labour increases due to inflationary pressures.
Relatedly, overheads as a percentage of sales increased to 61 percent, compared to 54 percent in 2022.
“Due to these cost increases, the business recorded a loss before interest and monetary adjustments of $1,3 billion compared to a profit of $4,0 billion for the same period last year,” said Sithole. He said interest costs remained relatively high owing to the high cost of borrowing in local currency as the business largely traded in Zimbabwean dollars during the period under review.
“A monetary gain of $944 million was recorded that mitigated the loss before tax to $1,0 billion compared to a profit of $1,4 billion recorded in the 2022 comparative period,” the chairman said.
In terms of the media environment, Sithole said it has generally remained stable, with gains in digital and radio audiences making up for the stagnant growth experienced by printed newspapers.
He said the group still has a fairly large number of people who still prefer the printed copies, and this is giving good value to advertisers.
“The younger audiences, consistent with the current global trends, are using digital platforms where they consume their preferred content at their convenience,” he noted.
In the television market, Sithole said there has been increased competition after a fourth Zimbabwean television station was launched on the same multichoice platform that carries Zimpapers Television Network (ZTN).
“This has intensified competition for advertising revenue, but we continue to improve the quality of content on ZTN Prime, which is connecting well with audiences,” he said.
He added that despite the increased competition, the latest Zimbabwe All Media & Products Survey report shows that the company’s newspapers are the most read, while the radio stations are dominating the urban markets, and ZTN has also increased its reach.
“We are conscious of the global media landscape, where there is a significant shift towards digital platforms and online streaming services, leading to an increase in on-demand content consumption.
“As a diversified media company, we are adapting to these changing trends and have invested in digital platforms to reach a wider audience,” said Sithole.
He indicated that the group has set up fully fledged digital teams in newspaper, radio and television units, which are driving digital growth.
“We have also worked to optimise our websites and applications for mobile devices to ensure a seamless user experience,” the chairman said.
On digital media, Sithole said the company continues to leverage its strong media industry brand recognition and digitally fact-checked, compelling content creation capabilities to attract new and retain loyal customers in the digital space.
He said the company’s broadcasting division has also positioned itself quite conveniently for its customers by investing in the latest and most digitally sustainable software and hardware tools that make it easy to curate digital content for its digitally savvy customers.
“Consequently, the group’s online digital media audience increased by 17 percent from 7,6 million followers and website visitors to 8,4 million.
“Furthermore, the company also invested in the latest protection and performance firewalls to ensure that its systems would not be compromised and customer data would remain protected according to the “Data Protection Act,” the chairman said.
Sithole said the business will capitalise on any opportunities that will arise from the measures that were put in place by the government to stabilise the local currency and grow the economy.
Bongani Ndlovu