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Delma Lupepe

Business Reporter
DOMINANT and diversified media group, Zimpapers (1980) Limited, is pursuing and applying its resources to strategies that enable the company to take advantage of emerging opportunities to grow the business, board chairman Mr Delma Lupepe has said.

The giant firm has maintained stable operations across its divisions despite the difficult economic environment and is focused on consolidating its foothold towards increased profitability.

In a statement accompanying the group’s unaudited financial results for the half year ended June 30, 2016, Mr Lupepe said the company was positive that the turnaround strategies being implemented and the firm’s competitive advantage ensures security and future existence.

He reported that the overall group revenue for the period was $19 million, five percent less when compared to the same period last year.

“The decrease in revenue was mainly attributable to the general economic environment slowdown characterised by constrained market liquidity and declining disposable incomes,” said Mr Lupepe.

“In line with the recorded revenue reduction, gross profit declined to $12,7 million from $13,6 million attained last year. The gross profit margin at 67 percent remained largely in line with what was achieved in the previous year.”

Revenue for the newspaper division was nine percent adverse to the same period last year. However, the division sustained a $1.4 million operating profit before interest and exchange losses that were recorded in the prior year.

The commercial printing division recorded a 19 percent growth in revenue to $1.8 million compared to $1.5 million for the prior year. The growth was driven by further retooling of the downstream operations that was done in the first half of 2016.

The broadcasting division’s revenue grew 13 percent from $1,7 million to $1.9 million on the back of aggressive brand awareness campaigns. The period under review saw commissioning of another station for the Zimpapers’ stable, Diamond FM, in Mutare. The division recorded an operating profit before interest and tax of $0.2 million.

The board chair said gross profit margin remained under pressure as clients were aggressive on requests for discounts in view of the obtaining economic environment. He said the company remains focused on cost control on the back of declining revenues.

“To this end operating expenses at $11,2 million were 10 percent favourable to $12,6 million recorded last year. Consequently, operating profit before interest and exchange losses of $1.7 million was recorded,” said Mr Lupepe.

Although the company is still in a net liability position of $16,9 million, he said the board and management were working on strategies to address the issue.

The board chair said the company remains committed to servicing its debts as they fall due where possible and engage service providers.