Nation Media Group PLC announced Wednesday that it expects earnings for 2023 to be at least 25% lower than the previous year due to economic challenges and rising costs.
The company said in a statement that “like most sectors of the economy, media business, particularly in Kenya, has been adversely impacted by headwinds mainly attributable to the relentless increases in prices of basic commodities, drastic rise in fuel prices, runaway depreciation of the Kenya Shilling, rising interest rates and higher taxes.”
Company Secretary Angela Namwakira said the combination of factors has led to “depressed consumer spending and increased cost of doing business.”
“In addition, the increase in global prices of newsprint coupled with a weakened Kenya Shilling against the US Dollar and higher distribution costs arising from fuel prices have resulted in significant incremental direct costs compared to previous year,” Namwakira said.
Unlike most businesses, Namwakira said the company is unable to offset the higher costs by increasing prices for consumers. She said the costs were partially mitigated by cost containment initiatives and improved productivity.
The Nairobi-based company, incorporated in Kenya under the Companies Act, said in the statement that although earnings will be lower in 2023, the board remains confident that strategic investments made to transform the organization will deliver long-term value.
“The recently completed newsroom integration and ongoing implementation of our content strategy will entrench the Company as the leading multi-media company in the region, offering unique and impactful content to our audiences,” the company statement said.
NMG’s profits have declined recently amid rising imported newsprint costs and a weakening Kenyan shilling. Net earnings dropped to KES 2.9 million in the first half of 2023, compared to KES 247.8 million in the first half of 2022.
