Oliver Kazunga, Senior Business Reporter
THE country’s largest integrated media house, Zimpapers (1980) Limited says the digital footprint has been pivotal in cushioning the business from the adverse shocks induced by the Covid-19 pandemic.
In a statement for the financial year ended 30 June 2020, Zimpapers chairman Mr Tommy Sithole said the Covid-19 induced lockdown, which started from March 2020, had detrimental effect on business across the divide.
“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,” said Mr Sithole.
He said Zimpapers’ mainstream newspapers (The Herald, The Sunday Mail, Chronicle, Sunday News, Manica Post and H-Metro), during the period, continued to be delivered into homes in print format, PDFs on e-mails and WhatsApp and were also sold in retail outlets and streets.
By May, he said appetite for printed newspapers had improved as industries gradually re-opened and readers understood better how the coronavirus 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,” he said.
“Our broadcasting platforms proved to be an attraction for most advertisers to reach these huge captive audiences.”
As part of the group’s public service journalism and corporate social responsibility initiative, Zimpapers platforms took the lead in informing the public on the Covid-19 pandemic.
The company launched a Covid-19 newsletter to offer audiences extended coverage of the pandemic.
In this period, Mr Sithole said there was also a high activity of information dissemination on social media and online platforms, most of which was not credible.
“This highlighted the continued relevance of mainstream media as professional certifiers of truth and the preferred platforms for information.
“Readers are increasingly trooping back to trusted news sources for information.
“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, that has seen remarkable growth in audiences online and on social media platforms.
Turning to the group’s financial performance during the period under review, he said the firm recorded a 6,8 percent revenue decline to ZWL$256,6 million compared to ZWL$275,4 million for the comparable period last year due to low demand arising from the Covid-19 lockdowns.
In historical terms, the company recorded 378,9 percent revenue growth when compared to the same period last year, which unfortunately was below the inflation rate of 737 percent as Zimpapers suffered volume and pricing deficits owing to the operating environment challenges.
The period under review was characterised by unstable macro-economic factors that included hyperinflation, liquidity challenges and uncertain operating conditions arising from the Covid-19 pandemic.
“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 pandemic during the period under review.
“Following a monetary loss adjustment, the company recorded an operating loss before tax of ZWL$32,7 million compared to a profit of ZWL$47,5 million for the comparative period,” said Mr Sithole.
In hyperinflation terms, the newspaper division recorded a 17,9 percent revenue decline to ZWL$148,2 million from ZWL$180,6 million recorded for the same period last year due to a challenging operating environment.
The division incurred a significant exchange loss of ZWL$17 million that led to an operating loss of ZWL$10,7 million.
On the commercial printing division, he said the business unit recorded a 15,6 percent revenue growth to ZWL$68,1million in hyperinflation terms as a result of an increase in demand for the division’s products following its designation as an essential service provider during the lockdown period.
However, operating profit decreased by 17,4 percent to ZWL$13,6 million compared to ZWL$16,4million recorded in 2019 owing to high cost of raw materials that was tracking the exchange rate and inflationary trends.
The radio broadcasting division’s revenue improved by 12,3 percent to ZWL$40,3 million on the backdrop of market consolidation during the lockdown period as advertisers wanted to reach out to audiences who were staying put in their homes.
“Consequently, an operating profit of ZWL$0,9 million was recorded compared to a loss of ZWL$2,5million for the comparative period in 2019,” said Mr Sithole.