This archive report was first published on 28 August 2019.
On August 28, 2019, Nation Media Group (NMG) announced that its shareholders would receive an interim dividend of Ksh1.50 ($0.014) per share for the first half of 2019.
The decision was made despite an 8.4% drop in the company's total comprehensive income, with the board projecting a stronger performance in the second half of the year.
NMG earned Ksh580.8 million ($5.8 million) in profit before tax, with group turnover dropping 7% to Ksh4.58 billion ($45 million) from Ksh4.92 billion ($48 million) achieved in the first half of last year.
The decline in profitability was mainly attributed to the challenging business environment, which saw many companies cut their advertising budgets in a period punctuated by losses, profit warnings, and staff layoffs.
"We have maintained our interim dividend because of the level of confidence we have that the performance will improve in the second half of the year," said NMG Board Chairman Wilfred Kiboro.
The chairman added that the Group is deepening its investments in digital products to boost future returns for shareholders.
Richard Tobiko, the Group Finance Director, told investors that the performance mirrors the rising number of Kenyan companies facing financial distress in the market.
"A lot of organisations are struggling and they are ideally our advertisers. A lot of time when firms struggle, they cut sales promotions and advertising budgets," said Mr Tobiko.
Direct costs went up from Ksh851 million ($8.5 million) to Ksh970 million ($9.7 million) mainly driven by higher prices of newsprint in the global market.
Operating costs, however, dropped by 8.5% to Ksh3.03 billion ($30 million) attributed to improved productivity and efficiency.
Group Chief Executive Officer Stephen Gitagama said as NMG marks 60 years, the next phase will be about strengthening delivery on impactful journalism while serving content in formats that resonate with the fast-evolving needs of different audiences.
NMG is focusing on monetising its digital assets as the next frontier for new revenue streams.
