Govt Arrears, Drop in Advertising Revenues Send New Vision Into Losses

Kampala, Uganda | THE BLACK EXAMINER | The New Vision Printing and Publishing Company Ltd faces ongoing performance challenges as Managing Director Don Wanyama notifies current and potential shareholders of expected losses for the 2022/2023 fiscal year. These losses are based on a preliminary assessment by the board of directors, which cites several factors, including price hikes in key inputs like newsprint and other raw materials due to global supply chain disruptions, adversely impacting company performance.

New Vision’s revenue streams are primarily derived from printing, broadcasting (radio and television) outlets, commercial printing, and other sources. The main factors contributing to the expected losses are the challenging business environment resulting from slow recovery from the COVID-19 impact on newspaper sales and reduced advertising revenue across various platforms.

The company’s performance has been inconsistent for over five years and led to the early retirement of former Managing Director Robert Kabushenga in 2021 after 15 years of service. New Vision expanded rapidly from print to a multiplatform media house, acquiring radio and TV stations and privately-owned newspapers in rural areas, a move criticized by analysts for its long-term impact on performance.

In 2019, the company reported a net profit of Shs 1.595 billion, but this turned into a loss of Shs 1.375 billion the following year due to strict anti-COVID-19 lockdown measures. A loss of Shs 985.5 million occurred in the financial year 2020/2021, but the company rebounded with a profit of Shs 988.7 million after tax in 2021/2022.

Despite a significant increase in sales revenues to Shs 111.4 billion from Shs 81.9 billion the previous year, higher growth in profit was hampered by a Shs 24.9 billion budget to outsource the printing and publishing of educational materials.

Half-year results for the period ending December 2022 show a profit of just Shs 57.35 million, down from Shs 396.5 million for the same period in 2021. The slow economic recovery from the COVID-19 pandemic and spending restructuring have disrupted media houses’ revenue streams.

New Vision experienced a 3.15% decline in advertising revenue and a 12.5% drop in circulation sales in the first half of the financial year. The most significant decline was in publishing revenues, down 77.7%. However, there was a 29.9% improvement in revenue from commercial printing.

In electronic media, radio segment advertising revenue fell by 23.2%, TV revenues dropped by 4.53%, and print advertising saw a 2.86% decline. Additionally, the company holds a substantial outstanding debt from the Ministry of Education and Sports for educational materials, impacting its financials.

The company’s increased inventory levels and slow recovery of receivables have affected cash flow and working capital availability, leading to a buildup of trade payables. These challenges continue to impact the company’s profitability.