ZIMBABWE’s media sector is going through tough economic times with Zimbabwe’s largest media group, Zimbabwe Newspapers Group (Zimpapers), reporting a US$2 million loss in the half year to June owing to falling revenues, high fixed overheads and huge finance costs on short-term borrowings.
Soon after the release of the poor set of Zimpapers financial results, company chairman Charles Utete yesterday announced the departure on early retirement of the group’s CEO Justin Mutasa and the company’s financial director Adolf Majome with effect from 30 September, 2014.
Mutasa offered to go on early retirement before the expiration of his contract while Majome’s contract of employment expired early this year and he opted not to renew it.
Mutasa and Majome had been with the company for 12 and 11years respectively.
The company earned US$21 million in revenue in the half year to June 2014 from US$22,4 million, a 6% decline in the comparative period last year.
Zimpapers operates 12 publications, a commercial printing press, a radio station and two digital platforms.
Gross profit for the group declined to US$16,2 million from US$16,5 million in the same period last year.
Zimpapers reported a loss before tax of US$1,9 million compared to a profit of US$503 471 owing to declining revenue and fixed overheads.
Finance costs also ate into the bottom line.
For instance, the company had short-term loans of US$4,1 million in the same period with financing costs of US$851 721 arose on the same facility, according to its financial statements.
“Although they are a number of players on the market, Zimpapers still maintains its market leadership as confirmed by different independent surveys. Most of the company’s publications have defined their key editorial propositions and dominating their respective markets in terms of content,” Zimpapers chairman Charles Utete said.
The group’s commercial printing division recorded an operating loss of US$434 310 from a loss of US$51 654 in the same period last year.
The broadcasting division recorded an operating loss of US$112 660 compared to US$104 244 from last year.
Several Media houses, including Alpha Media Holdings (AMH), are struggling to pay workers on time because of a growing gap between their cost structures and revenue bases in the context of structural changes on the media landscape, technological advances and a struggling economy.
All over the world, news media are in turmoil, grappling with demands to adapt to rapidly changing technological innovations and commercial models that affect their businesses.
The way media gather, produce and distribute news and content is undergoing revolutionary changes which have disrupted old operational and business matrices, including the selling and consumption of news. African countries, including Zimbabwe, have not been spared.
In Zimbabwe, ZBC — which has no local competition to talk about — has been particularly struggling to cope.
The public broadcaster had even fallen months behind in terms of paying workers and accumulated huge debts.
However, part of ZBC’s multifaceted problems have been attributed to extended periods of mismanagement and malpractices like paying senior managers unsustainable extortionist salaries.
In order to adjust and survive, AMH has since last year taken measures to cut costs through voluntary retrenchments, removal of some benefits and changing its business model by embracing technology and innovation. AMH has also restructured through convergence of newsrooms and consolidation of titles.