Kampala, Uganda | Written by Michael Wandaty | New Vision Printing and Publishing Corporation Ltd expects financial challenges to continue, as CEO Don Wanyama admits.
Four years after the outbreak of the coronavirus disease (COVID-19), the situation in the industry remains challenging, even as many media companies face layoffs.
Vision Group, the country's largest and most diversified media company, has indicated that its financial statements for the half year ending December 2023 are likely to show a loss.
“Based on a preliminary assessment of the company's performance, the company's earnings for the six months ending December 31, 2023 will be in the red,” the company said in a communication to the stock market.
The National Association of Broadcasters (NAB) said the advertising market will remain weak even after the pandemic as companies are slow to return to pre-pandemic budget levels or are reallocating expenses, negatively impacting media companies. It emphasizes that it continues.
Despite expressing hope for a recovery in the 2022/23 financial year, Wanyama acknowledged losses had been incurred in November, suggesting that the economy continues to struggle with the lingering effects of the pandemic.
“Therefore, although we had posted a profit in the previous financial year 2021/2022 and had hoped that the difficulties were a thing of the past, the environment I have painted for you is still lingering. Our market has not yet fully recovered from the negative impact of the COVID-19 pandemic. “We are also seeing supply chain disruptions and governments, our key business partners, are also reducing spending,” he said.
He blamed the poor performance primarily on rising prices for printing materials, especially newsprint, due to global inflation and the war in Ukraine. Print products account for almost half of the company's revenue, followed by broadcast (radio and television) stations and commercial printing.
“This performance was primarily driven by the challenging business environment due to the slow recovery from the impact of COVID-19 on newspaper sales and advertising revenue expenditures across various platforms,” Wanyama said.
The majority-state-owned company blamed its financial losses on government delays in resolving arrears related to printing educational materials for children during the lockdown.
The company's recent profit warning points to the slow recovery from the impact of the COVID-19 pandemic as a key factor in the challenging operating environment.
Also read: New Vision falls into the red due to government arrears and decreased advertising revenue
“This performance was primarily driven by the challenging business environment due to the slow recovery from the impact of COVID-19 on newspaper sales and advertising revenue expenditures across various platforms,” Wayama said of the expected 2023/2024 results. Stated.
Rising newsprint and raw material prices due to global supply chain disruptions are further impacting the company's performance. In November, Vision Group Chairman of the Board Patrick Ayota announced the organization's strategy for 2023/24, with a focus on restoring profitability, prioritizing staff welfare and productivity, and improving customer engagement and satisfaction. The outline was explained. According to Wanyama, these goals are expected to yield positive results this year.
“We are confident that the benefits and benefits of several investments made over the past year are likely to be realized in the next financial year, which will generate new revenues and accelerate the company's growth,” he said. “We look forward to a complete economic recovery.” One year ahead. ”
