NMG projects better second half, retains dividend at Sh2.50 a share

Nation Media Group has announced that it will maintain an interim dividend payout of Sh2.50 per share for the half-year to June, the same amount paid in a similar period last year.

NMG’s half-year profit before tax dropped to Sh1.43 billion from Sh1.56 billion posted in the first six months of last year, reflecting significant disruptions to its TV business between February and March at the height of the digital migration stand-off with the regulator.

The company’s turnover for the period under review decreased 5.2 per cent to Sh6.11 billion.

Cash generated from operations increased 28.6 per cent to Sh1.56 billion from the previous year’s Sh1.21 billion, reflecting the resilience of the media group’s underlying business fundamentals.

“On the television front in Kenya, during the period that we were off air, a lot of advertisers pulled out and it was pretty much a wait-and-see attitude,” said NMG’s chief executive officer, Mr Joe Muganda, when he announced the results yesterday.

“I am happy to report that we are pretty much back on track and I am sure when we will be reporting our full-year results, you will see a different picture. Despite the disruptions to our TV business, cash generated from operations increased.”

Mr Muganda was presiding over his first investor briefing since taking over as chief executive officer from Mr Linus Gitahi.

Major television stations in the country, including The Nation Media Group’s NTV and QTV, were off-air for three weeks beginning in mid-February following disagreements with the telecommunications industry regulator.

Group chairman Wilfred Kiboro said the two television stations returned profits for the three months to July, and they are expected to close the year in positive territory.

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“The digital migration process is now behind us and we can focus on how to grow the business going forward,” said Mr Kiboro, who described Mr Muganda as the right person to lead the company.

NMG, which is the largest media group in East and Central Africa, is installing a Sh2 billion state-of-the-art printing press at its Mombasa Road plant to improve the quality of its publications and increase pagination.

The group wrote off Sh92.2 million in accelerated depreciation of its printing press that is to be retired later this year. The plant has served the firm for 18 years.

“The new press project is progressing well and the plant is due to be commissioned on schedule, before the end of the year,” said NMG in a statement.

The company’s current assets grew by 10.4 per cent to Sh8.14 billion in the six months.

The current liabilities decreased by Sh28 million to Sh3.09 billion.

NMG owns newspapers and television and radio stations in Kenya, Uganda, Tanzania and Rwanda.

The divisions that strongly boosted the company’s half-year results included the Business Daily, whose revenue increased eight per cent and NTV Uganda, whose income went up 16 per cent.

The interim dividend of Sh2.50 for every ordinary share held translates into a total payout of Sh471.4 million.

The company says it is optimistic about the second half of the year, as it expects no significant disruptions and a further boost in earnings from Tanzania’s General Election, slated for October.

“Things are looking up now and we do not see any reason why we should not close the year with a strong performance and maintain a reasonable dividend payout,” said Mr Kiboro.