Senior Business Reporter
Zimbabwe’s largest integrated media house, Zimpapers (1980) Limited, says its digital footprint has been critical in cushioning the business from the adverse shocks of the Covid-19 pandemic along with a determination to provide accurate and quality content for its readers.
In a statement for the first six months of the present financial year, Zimpapers chairman Mr Tommy Sithole said the lockdown coming into effect at the end of March had detrimental effect across the business.
“The media environment was not spared by the pandemic both globally and locally. The pandemic affected media consumption from an audience and advertiser perspective, causing distribution and delivery hurdles as the whole value-chain workflows were disrupted,” he said.
“Newspaper street sales were negatively affected during the first lockdown period in March as most traditional readers were working from home. Zimpapers responded to these new challenges by migrating some of its publications namely Kwayedza, Umthunywa, Business Weekly and B-Metro to the digital platform to conserve imported newsprint in the face of uncertainty in the movement of this critical raw material across the borders.
“These publications are now digital products and continue to attract high numbers of audiences, giving value to advertisers.”
Mr Sithole said Zimpapers’ mainstream newspapers — The Herald, The Sunday Mail, Chronicle, Sunday News, Manica Post and H-Metro — continued to be delivered to homes during the period in print format, PDFs on e-mails and WhatsApp and were also sold in shops and on the streets.
By May, the appetite for printed newspapers had improved as industries gradually re-opened and readers had better understanding of how Covid-19 was transmitted.
“There was a marked increase in readership as most people sought reliable and quality information from credible sources as opposed to social media. Listenership and viewership on our radio stations and television platforms also shot up during the period under review as most people were operating from home. Our broadcasting platforms proved to be an attraction for most advertisers to reach these huge captive audiences,” he said.
As part of Zimpapers’ public service journalism and corporate social responsibility initiative, the group’s platforms took the lead in informing the public on Covid-19. Zimpapers launched a Covid-19 newsletter to offer audiences extended coverage of the pandemic.
“Zimpapers’ digital platforms led the national narrative on the pandemic primarily through all the 10 websites while debate on issues covered was live across its social media platforms,” he said.
Mr Sithole said the new normal has put digital platforms at the centre and Zimpapers was forging ahead with its “digital first strategy”, which has seen remarkable growth in online audiences and social media platforms.
Turning to the group’s financial performance during the six months, Zimpapers recorded a 6,8 percent revenue decline, after adjusting for inflation, to $256,6 million compared to $275,4 million in the same period last year due to lower demand arising from the Covid-19 lockdowns.
In historical terms, the company recorded 378,9 percent revenue growth compared to the same period last year, which unfortunately was below the annual inflation of 737 percent as Zimpapers suffered volume and pricing deficits owing to the operating environment challenges.
Said Mr Sithole: “The company’s gross profit margin declined to 58,9 percent from 66,9 percent (inflation adjusted) and 60 percent from 66,9 percent (historical) when compared to same period last year in hyperinflation and historical terms respectively, owing to high cost of sales driven by hyperinflation at a time when volumes were constrained by the lockdown.
“Following a monetary loss adjustment, the company recorded an operating loss before tax of $32,7 million compared to a profit of $47,5 million for the comparative period.”
The newspaper division recorded a 17,9 percent revenue decline to $148,2 million from $180,6 million recorded in the same period last year and incurred a significant exchange loss of $17 million that led to an operating loss of $10,7 million.
On the commercial printing division, the business unit recorded a 15,6 percent revenue growth to $68,1 million due to an increase in demand following its designation as an essential service provider during the lockdown period.
However, operating profit decreased by 17,4 percent to $13,6 million compared to $16,4 million recorded in 2019 owing to high cost of raw materials that was tracking the exchange rate and inflationary trends.
The radio division improved by 12,3 percent to $40,3 million on the backdrop of market consolidation as advertisers wanted to reach out to audiences who remained indoors.
“Consequently, an operating profit of $0,9 million was recorded compared to a loss of $2,5 million for the comparative period in 2019,” said Mr Sithole.