Nation Media Group’s gross profit before tax grew to Ksh1.7 billion ($19.2 million) in the six-month period to June this year, helped by increased sales and prudent cost management in a tough operating environment characterised by rising inflation and a wave of insecurity.

The Nairobi bourse-listed media house’s turnover rose 0.3 per cent to Ksh6.4 billion ($72.3 million) despite missing the one-off earnings from last year’s general election.

“The void in income, attributable to the general election, which boosted the results in the first half of last year, was mitigated by a combination of new innovative income generation projects as well as sustained cost cutting measures,” said Linus Gitahi, the NMG chief executive.

The NMG board announced an interim dividend of Ksh2.50 ($0.028) per share, the same rate as last year.

The group’s Newspapers Division continued to be a big driver of earnings, having cut operational costs by 14 per cent and returned operating profit that was one per cent higher than in the same period last year.

NMG’s Kenya TV division, which is made up of NTV and QTV, more than doubled its operating profit, which rose by 131 per cent during the accounting period.

NTV Uganda posted a 12 per cent growth in advertising revenue driven by increased market share and new programmes.

Operating profit was down in Uganda’s Monitor Publications, partly caused by a long-drawn recovery from the disruption in May last year caused by a two-week closure by the government.

NMG’s Tanzanian subsidiary Mwananchi Publications saw circulation revenue grow by 23 per cent.

This was attributed to the start of newspaper printing in Mwanza, which helped increase sales and provide access to the Lake Victoria region market.
Mr Gitahi said the company projects to make better returns in the second half of this year.

“We are optimistic of sustaining growth in the remaining half of the year.”

NMG — the largest media company in East and Central Africa — plans to install a Ksh1.8 billion ($20.3 million) state-of-the-art printing press mid next year to improve the quality of its newspapers and increase pagination.

The new press will be funded from the company’s internal cash reserves. NMG cash reserves remained at Ksh4.2 billion ($47.4 million) as at the end of June.

Wilfred Kiboro, the NMG board chairman, however, warned that the protracted legal battle over the switch from analogue to digital broadcasting was holding back investments in the sector.

The Supreme Court is yet to rule on a case filed by NMG and two other media houses challenging the planned migration to digital broadcasting. The three media companies argue that the shift to digital should not be effected until broadcasters are granted a digital signal distribution licence.

Mr Kiboro said NMG was ready to distribute affordable digital set-top boxes if it wins the court case and is awarded a digital broadcasting licence.