New Vision Set to Announce Second Consecutive Half-Year Loss Amid Declining Revenues and Rising Costs

For the second consecutive year, investors in The New Vision Printing and Publishing Company Limited have little reason to celebrate, as the company prepares to report a loss for the half-year ending July 2024.

This disappointing outlook comes as Uganda’s largest media company continues to face declining revenues amid what it describes as a challenging business environment, which has negatively impacted sales while driving up operating expenses. The company’s Managing Director, Don Wanyama, has informed shareholders, potential investors, and the public about the anticipated loss for the recently concluded half-year.

According to Wanyama’s notice, a preliminary assessment of the company’s performance indicates that the year’s earnings will be in a loss position.

“The main factors contributing to this performance include the challenging business environment, marked by declining newspaper sales and reduced advertising revenue across various platforms, coupled with rising prices of raw materials and other operational costs,” Wanyama stated.

The company, which experienced a profit setback in 2021 due to the COVID-19 lockdown, managed to turn a profit in the following year, partially aided by increased revenues that hinted at a recovery from the pandemic’s impact. However, by the year ending June 2023, the company slipped back into losses totaling 5.46 billion Shillings, compared to a profit of 988 million Shillings the previous year, as revenues dropped by 21 percent to 87.6 billion Shillings.

The decline in revenues was exacerbated by rising expenses, particularly in administration, distribution, and credit losses on financial assets. The first half of the following year, ending December 2023, saw further losses of 7.58 billion Shillings after tax, contrasting with a profit in the corresponding half of 2022, driven by a 17.7 percent revenue drop attributed to reduced publishing orders and advertising business across all revenue platforms.

According to the company’s statement for the first half of the year, publishing sales plummeted by 76.4 percent, while advertising revenue decreased by 13.6 percent. There were also declines of 9.4 percent in circulation sales and 6.8 percent in commercial printing sales.

Advertising revenue across radio, television, and print all declined by an average of 14 percent as the company entered the final half of 2024, while costs of sales and administrative and operating expenses increased by 4.41 percent and 0.37 percent, respectively. The company attributes these rising costs to supply chain disruptions and the ongoing war in Ukraine.

Management had anticipated a stronger finish to the 2023/2024 fiscal year, banking on diversification into new ventures in publishing and outdoor advertising, which they believed would stabilize the business while maintaining a focus on traditional media.

During the first half of the year, the company invested 4.05 billion Shillings in the outdoor advertising industry, installing and operationalizing 60 percent of the planned digital screens in Kampala’s Central Business District. Several clients were onboarded, and revenue of 450 million Shillings was recognized, but this has not been sufficient to reverse the company’s fortunes, as indicated by the recent performance warning.