This archive report was first published on 25 May 2020.
On 22 May 2020, Nation Media Group issued a profit warning, citing the COVID-19 pandemic as the reason behind the expected drop in profit. The company's Board of Directors, led by Chairman Wilfred Kiboro, had reviewed the company's performance forecast for the current trading period and determined that the earnings for the financial year ending 31 December 2020 would be lower than the earnings for the previous year by at least 25%.
According to Kiboro, the outbreak of the COVID-19 global pandemic presents an unprecedented risk to the economy in 2020 and possibly beyond. The various response measures rolled out to contain the spread of the novel virus have precipitated a significant decline in the company's revenues.
The COVID-19 pandemic has led companies to cut their marketing and advertising expenditure as they face financial challenges. Newspaper sales have also declined as more people work from home, thereby reducing the firm's revenues.
As a result, Nation Media Group has taken measures to mitigate the impact of the pandemic. Last month, the company enforced a temporary salary cut of between 5% and 35% for its employees who earn above KSh 50,000. The board of directors has also cut the directors' fees to shield the media house from the pandemic's impacts.
Marketing and advertising revenues have been on the decline for the past five years as audiences shift from print to digital media. Nation Media recorded an 18.5% drop in earnings in 2019, while Radio Africa group announced intended redundancies. The COVID-19 pandemic has only worsened the situation.
