Harare – Listed diversified media group Zimbabwe Newspapers (1980) Limited’s turnover for the half year ended June 30, 2018 increased by 10 percent to close at $20.2 million compared to $18.3 million the prior year.

In a statement accompanying the Group’s financial results, Chairman Delma Lupepe said the improved revenue generation was driven by the organic growth from all its operational divisions with the major driver being recorded from the Commercial Printing division following the commissioning of the second printing press.

The Company’s gross profit for the period under review increased by 9 percent to $13.0 million compared to $12.0 million recorded during the same period in 2017.

Operating costs at $10.9 million were 5 percent adverse to the same period last year as a result of the revenue growth and the increase in provision for credit losses in line with the dictates of International Financial Reporting Standard 9 (IFRS 9).

“As management remained focused on cost optimisation initiatives, the Company’s EBITDA grew by 9 percent to $3.5 million compared to $3.1 million recorded for the same period last year. Consequently, the company recorded a 34 percent increase in profit before tax at $2.4 million from the $1.6 million recorded in 2017.”

In the period under review, the company’s trade debtors at $9.1 million remained largely in line with the 2017 position despite the 10 percent growth is revenue generation. The increase in stock holding to $1.8 million was in response to the need to avoid stock outs on raw materials owing to prolonged lead time arising from the forex shortages.

It said during the period under review, it managed to reduce its statutory debt by 10%.

Cash generated from operations after changes in working capital increased to $4.3 million compared to $2.1 million for the same period in prior year.

“The 104 percent increase in cash flow from operating activities when compared to prior year was a result of improved profitability and better working capital management.

“Capital investment expenditure for the period increased to $1.7 million compared to $0.3 million for the same period last year as the board was focused on equipping the business to deliver better efficiencies and capacitation of the newly launched television business.”

Zimpapers said the net cash outflows from financing activities of $2.7 million was mainly made up of a reduction of both the statutory tax liabilities and the bank borrowings.

To that effect, the Company’s total borrowings was decreased by 26 percent compared to balances recorded at the year ended 31 December 2017.

In the period under review the Newspaper Division recorded a 5.0 percent growth in revenue to $14.2 million from $13.5 million recorded for the same period last year. Owing to revenue growth and better cost management, profitability grew by 35 percent to $1.9 million.

The Commercial Printing Division recorded a 44 percent revenue growth to $3.6 million as a result of an increase in the Company’s products and the commissioning of the second printing press late last year.

“Although the Division’s profit before tax increased by 16 percent to $0.42 million compared to $0.36 million for 2017, the profit margin suffered a 5 percent decline to 14 percent as the cost of materials significantly went up due to economic challenges,” said Lupepe.

During the period under review, the Radio Broadcasting Division’s revenue improved by 9 percent to $2.5 million on the backdrop of increased advertising volumes while profit before tax decreased by 24 percent to $0.2 million compared to $0.3 million for the same period last year and this was attributed to increased provision for credit losses after the implementation of IFRS9.

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