Thursday, July 25, 2024

Standard Media Group sinks into Sh. 1.26 billion full year net loss

The Standard Media Group has posted a full year net loss of Sh. 1.26 billion for the twelve month period ended December 2023. This net loss was an increase from the 1 billion loss that the media house recorded in the previous 2022 financial year.

“The group incurred a loss before tax of Sh. 722.5 million compared to a loss before tax of Sh. 1.029 billion in 2022,” the Standard said in a statement. “However, a decision was made to derecognize deferred tax assets of Sh. 538.9 million resulting in an increase in the loss after tax to Sh. 1.261 billion from Sh. 865 million recorded in the prior year.”

During the year under review, revenue fell by 13 per cent to Sh. 2.4 billion. This reduction was attributed to reduced business from advertising clients. “A tough economic environment saw many companies cut down on their marketing spends. Additionally, there was a reduction in advertising by Government institutions and this also negatively Impacted the Group’s revenues,” the media company’s Board stated through the company secretary Victoria Cherotich.

Net cash from operations dipped21.5 per cent to Sh. 402.6 million. Direct costs were higher than 2022 largely due to a significant increase in newsprint prices, fuel and electricity costs, as a result of forex fluctuations. Overhead costs were 25 per cent lower than 2022 due to staff cost reduction and other cost rationalization measures.

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Following these dismal results, the media company announced that it will not paying out any dividends.

In its financial statement, the Standard Media blamed the weakening of the Kenya shilling in 2023, inflation, and reduced purchasing power as some of the reasons that fueled its fall into this huge full year net loss.

NCBA

“The Kenyan economy in 2023 faced significant headwinds. The Gross Domestic Product (GDP) growth was constrained by multiple factors, including heightened inflation, rising interest rates and volatile forex trading conditions, with the Kenyan Shilling depreciating by about 21 per cent against the US Dollar,” the media company said.

“Inflation rates soared, primarily driven by increased costs of essential goods and services, impacting the purchasing power of our consumers and increasing the operational costs for businesses. The business has employed various initiatives to mitigate the negative impacts to the business.”

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