Zimpapers reduces total liabilities by 11.6%

Published: 30 March 2018

LISTED diversified media group, Zimpapers, has reduced total liabilities by 11.6 percent to $28.1 million while investment in capital expenditure also improved to $1.9 million last year from $1.2 million in 2016.

In a statement accompanying the group's financial results for the year ended December 31, 2017, Zimpapers chairman Mr Delma Lupepe said the company remains focused on pursuing and applying resources on strategies that enable the entity to take advantage of the emerging opportunities to grow the business.

"The company's trade debtors were reduced by 12 percent to $9.1 million compared to $10.3 million for 2016. Consequently, total liabilities were reduced by 11.6 percent to $28.1 million compared to $31.8 million recorded for the prior year," he said.

"Investment in capital expenditure was increased to $1.9 million compared to $1.2 million for the same period last year as the board focused on equipping the business to deliver better efficiencies."

An analysis of Zimpapers' position in terms of meeting short and long-term financial obligations also shows an improvement with the current ratio moving from 1.2 in 2016 to 1.3 as at the end of last year.

This also means that the company's going concern status was firming.

During the period under review, the group recorded total revenue of $39.1 million compared to $37.6 million in 2016.

This growth, Mr Lupepe said, was 4.1 percent higher than that of 2016 due to revenue growth from the broadcasting and commercial printing divisions.

The commercial printing division recorded a 36.3 percent revenue growth to $5.6 million as a result of an improved demand for the company's products largely driven by enforcement of Statutory Instrument 64 of 2016.

"Due to improved capacity utilisation and efficiency optimisation, the division's profit before tax increased by 122.8 percent to $0.9 million compared to $0.4 million for 2016," he said.

The newspaper division in the financial year ending December 31, 2017, suffered a three percent decline in revenue to $28.4 million compared to the corresponding period in the prior year although profitability was at $3.8 million, 44.9 percent higher than the 2016 financial year.

The prevailing liquidity challenges were the major constraints to revenue growth in the newspaper division as circulation sales volumes were affected.

"The company will continue to drive financial performance through volume growth, innovation and cost containment initiatives.

"In line with the recorded revenue increase arising from the improved capacity utilisation from the commercial printing division and cost containment initiatives, the company's gross profit increased by 5.8 percent to $26.1 million from $24.7 million," said Mr Lupepe.

As a result of revenue growth, operating expenses increased by 2.3 percent to $22.3 million from $21.8 million recorded in 2016.

The increase in operating expenses was as a result of an increase in selling and distribution costs as Zimpapers was on a drive to improve its media footprint to reach out to many audiences across the country.

On the group's broadcasting division, revenue performance for the period improved by 22 percent to $5.2 million on the back of increased advertising volumes while operating profit grew by 27.9 percent.

"The division's brands continue to take a lead in radio broadcasting in Zimbabwe. Resultantly, the division recorded an operating profit of $0.6 million compared to $0.5 million for the same period in 2016," said Mr Lupepe.

On the outlook, Mr Lupepe said following renewed optimism for economic turnaround ushered by the new political dispensation, Zimpapers remains positive that its vision of becoming a fully integrated media house reaching out to radio, print and television audiences will be realised.

"The company's 2018 financial performance has started on a relatively positive note and the board is optimistic that performance for the year will be better than what was recorded in 2017," he said.
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