The Nation Media Group (NMG) on Friday issued a profit warning to its investors, citing reduced revenues due to the effects of Covid-19 pandemic.
In a statement to shareholders, NMG chairman Wilfred Kiboro said that Covid-19 global pandemic presented an unprecedented risk to the economy in 2020 and possibly beyond.
“The Board of Directors, having reviewed the company’s performance forecast for the current trading period, has determined that the earnings for the financial year ending 31 December 2020, will be lower than the earnings for the previous year by at least twenty five percent,” said Kiboro.
The forecast is for the year ending December 31, 2020, and comes seven months before the year ends pointing out to little hope to turn around things even if things return to normal.
“The various response measures rolled out to contain the spread of the novel virus have precipitated a significant decline in the revenues,” he said.
NMG reported a 23 percent reduction in profit after tax for the full year ended December 2019 to Ksh856 million down from Ksh1.1 billion in the year ended December 2018.
The company attributed the dwindling fortunes to a reduction in advertising spends and increased costs to print news for traditional media.
In the wake of Covid-19, the media house slashed employee salaries by between 5-35 per cent, for all employees earning over Ksh50,000.