Nelson Gahadza-Senior Business Reporter.
Zimpapers Limited, the country’s largest integrated media group grew its revenue by 61 percent to $18,6 billion for the year ended December 31, 2022, compared to $11,6 billion recorded in the same period last year, largely driven by volume growth across operating divisions.
Group chairman Tommy Sithole, in a statement accompanying the financial results, said during the period under review, the media environment continued to be stable.
“Recovery of our printed newspapers, which had taken a knock during the Covid-19 years is on the course, whilst the digital platforms are enjoying remarkable growth in audiences.
“Radio continues to attract huge audiences while television is still an area of potential growth,” he said.
Mr. Sithole added that the newly licensed television stations in Zimbabwe, including the company’s Zimpapers Television Network (ZTN), were steadily finding their place in a market that for years had been dominated by one player.
The modest recovery of the print business is consistent with world trends as shown by the recently released WAN-IFRA World Press Trends 2022-2023 report which says print continues to dominate revenues.
“When combined, print advertising and circulation generate more than half (53,5 percent) of the total income at 53,5 percent, seen by our survey respondents, but is down from last year’s report when it was at 56,1 percent,” he said.
According to the Zimpapers chairman, owing to inflationary pressures and an unabated increase in the cost of imported raw materials, the gross profit margin declined to 63 percent from 66 percent in the same period last year.
“Nevertheless, the company improved its earnings before interest and tax (EBIT) margin to 11 percent compared to 9 percent for the same period last year as a result of improved overheads management which was at 54 percent to turnover compared to 58 percent for last year,
The chairman said owing to tight liquidity arising from delayed payments by most of the group’s clients and the required capital expenditure, the company had to access costly short-term funds to meet its working capital needs, which increased the cost of borrowing to $610,7 million.
“Profitability for the company was further affected by a monetary loss adjustment of $940,8 million that was recorded during the period under review.
“Resultantly, a net profit before tax of $384,7 million was recorded compared to $494,9 million for the prior year,” said Mr. Sithole.
In terms of divisional performance, the newspapers division increased its top line by 59 percent, mainly as a result of the need to protect margins in a hyperinflationary environment.
Mr. Sithole said cost optimization remained critical in ensuring its survival and improving the profit margins of the division.
As a result, the division recorded earnings before interest, tax, and monetary adjustments of $1,9 billion.
The Commercial Printing Division (CPD) recorded a 63 percent revenue growth driven by volume growth in labels and general printing.
In line with the revenue growth and cost optimisation interventions, the unit posted earnings before interest, tax, and monetary adjustment of $443,0 million for the period under review.
Mr. Sithole said the division continued to face challenges in obtaining adequate foreign currency for the importation of critical raw materials, resulting in a negative impact on the ability of the division to stretch its growth ambitions.
Revenue for the broadcasting division grew by 67 percent compared to last year, driven by both radio and television units, which grew by 74 percent and 42 percent respectively.
The broadcasting division’s overall profitability continued to be weighed down by the newly licensed television channel that was launched on DSTV channel 294 in May 2022.
“The channel has, however, been gaining acceptance in the market and its prospects are very high.”
Mr. Sithole said the group continued to make investments into its journalism through training and the injection of new skills as it seeks to remain relevant in the face of other competing sources of news and information.
“We, by far, remain the most trusted source of credible news and information as confirmed by results of the Zimbabwe All Media Products Survey (ZAMPS), where our platforms are the most dominant.
“We continue to value professional and ethical journalism, which is the mainstay of mainstream journalism in an environment where fake news continues to spread, particularly through social media,” he said.
Cabinet has since approved the principles of the Media Practitioners’ Bill, paving the way for the enactment of a law that will demand high standards of journalism.
On digital media, Mr. Sithole said the company had taken steps to exploit positive benefits arising from the Artificial Intelligence (AI) revolution to provide a better user experience while ensuring protection against negative digital manipulation and unpredictable digital side effects.
He also said the company had configured its digital platforms to deliver the correct content to the right audience resulting in users that are more satisfied since they can easily locate what they need.
“Using AI and research on global digital media trends, the company’s digital platforms continue to improve and offer more value-added services and products that can keep the users engaged longer. This allows the company to provide better value to all its stakeholder chain,” said Mr. Sithole.
However, the chairman highlighted that the obtaining economic outlook is encouraging despite the first quarter of the year has started on a very difficult patch.
He noted that the diversification strategy adopted by the company will continue to anchor its ability to give clients media options of their choice as the company now offers a 360-degree media solution