The current liquidity crisis facing the country have impacted negatively on Zimbabwe Newspapers (1980) Limited financial results with the company’s revenue falling six percent down to $37.6 million compared to $40.1 million recorded during the same period in 2015.
By Jeoffrey Ncube
Speaking at the company’s annual general meeting held in Harare last week, the company Chairperson, Delma Lupepe attributed the drop in revenue to the constrained economic environment characterized by liquidity challenges for the consumers.
“The decrease in revenue was caused by the continued general economic environment slow down characterized by liquidity constraints that affected consumers’ disposable incomes.
“Resultantly, both circulation and advertising revenues were adverse to the same period last year.
“In line with the revenue decline and editorial costs reclassification, the company’s gross profit declined to $0.6 million recorded in 2015 mainly as a result of the absence of mobile news in 2016,” said Lupepe.
He however said Zimpapers, publishers of The Herald, Chronicle and Sunday Mail was continuing with cost reduction initiatives to improve the company’s viability.
“To this end, operating expenses decreased by 23.5% to $21.8 million from $28.5 million recorded in 2015.
“The optimization of the company’s cost base remains a key focus area in the period ahead, despite the 6% drop in revenue, the company’s net profit from operations before finance cost declined by just $0.1 million to $3.5 million,” said Lupepe.
He added that the Zimpapers board had recommended that they will not declare a dividend in order to preserve cash and service the legacy statutory obligations.
Zimpapers Chief Executive Officer, Pikirai Deketeke expressed confidence that the business remained profitable despite the difficult operating environment.
“Although turnover was 6.3% down compared to the same period last year, management remained focused at cost optimization to deliver a better profit before tax of $2.5 million compared to $2.5 million compared to $2.5 million for 2015,” said Deketeke.