The country’s biggest and only listed media group on the Zimbabwe Stock Exchange, Zimbabwe Newspapers (Zimpapers), turned back to profitability in the quarter to September 30, 2023 on the back of improved demand for a number of the firm’s products.
In a trading update for the period under review, group chief executive officer (CEO) Pikirayi Deketeke, said inflation-adjusted revenue for the period increased by 82 percent to $81,1 billion compared to the same period last year.
Furthermore, he said from the second quarter of the year to date, revenue grew by 90 percent compared to 66 percent for the same period last year.
“Subsequently, the bottom line before monetary adjustments turned back to profitability of $$3,3 billion from the second quarter year-to-date loss of $2,2 billion.
“The improved performance was realised from volume and price recoveries following a relative improvement in the demand for some of the company’s products,” said Deketeke.
In line with the revised 2023 projected gross domestic product (GDP) growth and the economic interventions by the Government to stabilise the operating environment, Deketeke said the company is expected to further improve its performance in the last quarter and secure its profitability for the full year.
However, despite the year-to-date revenue growth of 82 percent compared to the same period the prior year, the gross profit margin for the period under review declined by 10 percentage points to 58 percent.
Deketeke said this was caused by high sales costs that were driven by increases in material prices and the effect of local currency depreciation when compared to major currencies.
“Resultantly, a net profit margin before monetary adjustments of 5 percent was recorded when compared to 15 percent for the same period last year,” he said.
During the period under review, the company’s total assets amounted to $60,1 billion, while shareholders’ funds were $31,0 billion.
Deketeke said the group’s focus will remain on performance improvement through cost optimisation and value preservation.
He added that debt collection will also remain a key priority for the company to alleviate cash flow pressures.
“Appropriate risk mitigation measures have been put in place to secure the future of the company. The board and management will continue to focus on improving the performance of the business by capitalising on all possible growth opportunities,” said Deketeke.
He said the operating environment for the period under review remained relatively challenged by weak domestic demand, liquidity constraints, and exchange rate disparities.
However, the interventions by the authorities to maintain a tight monetary policy stance and exchange rate stability resulted in the average annual inflation for the quarter decreasing to 19,6 percent, compared to 31.7 percent for the second quarter.
According to the Zimbabwe National Statistics Agency, the use of foreign currency in local transactions in the economy now stands at about 80 percent, as the economy continues to dollarise.
Deketeke said the extension of the use of the multicurrency regime to 2030 is expected to promote confidence as businesses can make medium- to long-term investment decisions.
Zimbabwe’s economy is projected to register 5,3 percent in 2023, riding on agriculture, mining, and construction.