The Nation Media Group has reported a profit before tax for 2018 of 1.6 billion shillings, a drop by 16.4 percent compared to 2017 due to “bad debt by the government.”
The management has attributed the drop in profits to the “depressed regional economies. Also impacted by discontinuation of government advertising business from July 2018 due to inordinate delays in settling outstanding debts.”
The total turnover for the media group was down by 9.1 percent to 9.6 billion shillings in what the Finance Director Mr. Richard Tobiko attributed to “bad debt.”
The company says it witnessed sales going down during the year because of “efficiencies made at their printing plant on Mombasa Road.”
According to NMG, Kenyans are shying away from purchasing newspapers as they used before. The Group says customers who used to buy physical newspapers have migrated to digital “but young people want to read it for free.”
The group is now looking at “serious innovation to monetize” their digital platform given the number of readers visiting it for news consumption.
NMG’s digital footprint grew by 15 percent to 37.2 million users during the period between March 2018 and March 2019.
The board has proposed a dividend of 5 shillings per share, a 50 percent drop from 10 shillings proposed in 2017.
With the internet penetration in Kenya at more than 90 percent and mobile penetration of 112 percent, Kenyans are increasingly taking to digital platforms for consumption of information.
The coming of social media tools such as Facebook and Twitter have continued to “steal” listeners and readers from the mainstream media. Currently, news “breaks” out on social media before being picked up by the mainstream media.