Kampala, Uganda | THE INDEPENDENT | There will little to cheer for the second year running for investors in The New Vision Printing and Publishing Company Limited, as the company prepares to announce a loss for the half-year ended July 2024.
This comes as the revenues of Uganda’s largest media company continue to fall, amidst what they call a challenging business environment that has affected sales, but also operating expenses. The company’s Managing Director, Don Wanyama has now informed shareholders, potential investors, and the General Public on the likelihood of a loss for the half year, just ended.
This, according to his notice, is based on the preliminary assessment of the Company’s performance, showing that the results of the Company’s earnings for the year will be a loss position.
“The main contributor to this performance is the challenging business environment due to declining traditional media newspaper sales and advertising revenue spend across the different platforms coupled with the increase in prices of raw material inputs and other operational costs,” Wanyama said in a statement.
The company, whose profits were hit in 2021 by the effects of the lockdown due COVID-19, realized a profit in the following year, partly boosted by an increase in revenues which promised to be a recovery path from the devastating pandemic. However, the year ended June 2023 saw it fall back again into losses totaling 5.46 billion Shilling compared to a profit of 988 million Shillings posted the previous year as revenues fell again, this time by 21 percent to 87.6 billion Shillings.
This fall in revenues was made worse by the increase in expenses, especially administration, distribution and credit losses on financial assets. The next six months to December 2023, which is the first half of this full year, saw further losses of 7.58 billion Shillings after tax, which contracts with a profit of the corresponding half in 2022, occasioned by a further fall in revenues by 17.7 per cent attributed to reduced publishing orders and advertising business across all revenue platforms.
According to the statement for the first half of the year, Publishing sales declined by 76.4 per cent, while advertising revenue fell 13.6 per cent. There were also declines of 9.4 per cent in circulation sales and 6.8 per cent fall in commercial printing sales.
Radio advertising, Television advertising and Print advertising all declined by an average 14 per cent, going into the final half of the year 2024, while cost of sales and administrative and operating costs increased by 4.41 0.37 percent respectively. The company attributes high costs of costs of raw material inputs, fuel and other operating costs to supply chain disruptions and continued war in Ukraine.
The management had expected that the year 2023/2024 would end on a stronger note due to the company’s diversification into new ventures in publishing and outdoor advertising, which they said would stabilize the business while maintaining focus on traditional media.
In the first half of the year the Company invested 4.05 billion Shillings in the outdoor advertising market industry, installing and operationalizing 60 per cent of the planned digital screens in Kampala Central Business District. Several clients were on-boarded, and revenue worth 450 million recognized but this has not been enough to help turn around the fortunes of the company, going by the announcement warning on its performance.
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