Vusumuzi Dube
Judith Phiri, Business Reporter
THE country’s largest integrated media house, Zimbabwe Newspapers (1980) Limited (Zimpapers) has registered a 56 percent revenue growth to ZWL$3.4 billion in inflation adjusted terms for the year ended 31 December 2021.
In the same period in 2020, the group’s revenue stood at ZWL$2.2 billion. During the period under review, all Zimpapers operational divisions 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.
In the Chairman’s statement, group chairman Mr Tommy Sithole said despite operating in a challenging environment characterised by the negative impact of the Covid-19 pandemic and other issues the company recorded a revenue growth.
“In a challenging operating environment characterised by the negative impact of Covid-19, high inflationary pressures and declining disposable incomes, the Company recorded a revenue growth of 56 percent in inflation terms. To that end, revenue of ZWL$3.4 billion was recorded compared to ZWL$2.2 billion for the same period last year,” said Mr Sithole.
He said in line with the revenue growth, the Company recorded a gross profit of ZWL$2.2 billion and this was an increase of 53 percent when compared to the same period in 2020.
Mr Sithole, however, said owing to a high operating cost base, the net profit margin before financing cost, exchange gains and monetary adjustments declined to 9 percent compared to 12 percent for the same period in 2020.
“The major cost increases were incurred on raw materials supplies and general operating costs such as administration, selling and distribution as they were increasing in line with inflation. The company increased the use of its borrowing facilities to fund the increased cash requirements of the business in line with its growth plans. This resulted in a high interest cost bill for the period under review,” he added.
He said the net profit before tax improved by 498 percent to ZWL$144.0 million compared to the same period in 2020 and the growth was driven by a lower monetary loss when compared to the same period the previous year.
In terms of the newspaper division, Mr Sithole said it increased its top line by 56 percent and this was driven by volume recovery on both circulation and advertising price reviews to protect the company’s profit margins.
He said in line with the revenue growth, the division’s profit for the period under review also went up by 53 percent.
Mr Sithole added: “The commercial printing division, despite the 34 percent revenue increase to ZWL$602,7 million recorded by the division, net profit declined by 29 percent to ZWL$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.”
He said management was pursuing strategies to improve the generation of foreign exchange through increased exports and in line with this thrust, the division was participating in an improved foreign currency retention scheme introduced by the Reserve Bank of Zimbabwe.
Mr Sithole said the broadcasting division’s revenue performance improved by 81 percent to ZWL$645.2 million driven by both radio and television broadcasting services that recorded 71 percent and 136 percent respectively.
He however, noted despite the good revenue performance, the division’s profit declined by 123 percent owing to high set up costs associated with the television channel as the company prepares to get ZTN television channel on air.
Going forward, Mr Sithole said the company was on course to launch its television channel in the near future and remains strategically positioned to be the Zimbabwean channel of choice in television broadcasting.
“Focus will remain on ensuring improved customer service across the Group and fine tuning our product offering to meet the growing needs of our wide customer base.”
He said the continued Russia/Ukraine geopolitical conflict was expected to bring more challenges on the global supply chain market and there will be increased product shortage that will fuel price increases on some materials used by the company.
In view of these challenges, Mr Sithole said management will remain focused at ensuring the survival and growth of the company, albeit, at low margins.
Online Reporter