Kampala, Uganda | By Michael Wandati | The New Vision Printing and Publishing Corporation Ltd anticipates that its ongoing financial challenges will persist, as acknowledged by CEO Don Wanyama.
Despite the passage of four years since the onset of COVID-19 and numerous media houses facing layoffs, the industry’s landscape remains challenging.
Vision Group, the largest and most diversified media house in the country, suggests that the financial statements for the half-year concluding in December 2023 are likely to indicate a loss.
“Based on the preliminary assessment of the company’s performance, the results of the company’s earnings for the half year ending December 31, 2023, will be a loss position,” the company says in a communication to the stock market.
The National Association of Broadcasters (NAB) highlights that the advertising market remains sluggish post-pandemic, as companies are slow to return to pre-pandemic budget levels or are reallocating their expenses, negatively impacting media houses.
Despite expressing hopes for a recovery in FY 2022/23, Mr. Wanyama, in November, acknowledged that they incurred losses, indicating a continued struggle against the lingering effects of the pandemic.
“So, whereas we had posted a profit in the previous 2021/2022 financial year and had hoped the challenges were in the past, it is clear that the environment I have painted for you has lingered on and is still affecting our business. Our markets are yet to fully recover from the negative impacts of the COVID-19 pandemic. We have also seen disruptions in the supply chain, while the government, our key business partner, has also reduced spending,” he said.
He blamed the poor performance on the rise in prices of most of the printing inputs, especially newsprint, mainly due to global inflation and the war in Ukraine. The company’s revenues are dominated by print which accounts for almost half, followed by broadcasting (radio and television) outlets, commercial printing and others.
“The main contributor to this performance is the challenging business environment due to slow business recovery from the COVID-19 impact on newspaper sales and advertising revenue spend across the different platforms,” said Mr. Wanyama.
The state-majority-owned company attributes its financial loss to the government’s delay in settling arrears related to the printing of educational materials for children during the lockdown.
The company’s recent profit warning points to the primary factor for the challenging business environment as the slow recovery from the impacts of the COVID-19 pandemic.
Also Read: Govt arrears, drop in advertising revenues send New Vision into losses
“The main contributor to this performance is the challenging business environment due to slow business recovery from the COVID-19 impact on newspaper sales and advertising revenue spend across the different platforms,” Mr. Wanyama said regarding the FY 2023/2024 expected performance.
Global supply chain disruptions causing a surge in newsprint and input prices have further impacted the company’s performance. In November, Patrick Ayota, the Vision Group board chairman, outlined the organization’s strategy for 2023/24, focusing on returning to profitability, prioritizing staff welfare and productivity, and improving customer engagement and satisfaction. According to Mr. Wanyama, these goals are anticipated to yield positive results this year.
“The benefits and advantages of several investments made in the past year are likely to materialise in the next financial year which we are certain will bring in new revenue and enhance the growth of the company,” he said hoping for a “full recovery in the year ahead.”
