Zimpapers balance sheet atrocious

Zimbabwe Newspapers, the country’s major newspaper group, which is now facing very little competition following the closure of the Daily News in September had a massive turnaround, but market analysts said its balance sheet was “atrocious” because it was in a negative current liabilities position as well as a negative shareholders funds position.

The company turned around from a loss of $405.9 million in 2002 to a profit of $189.2 million last year.

Turnover only increased by 410 percent from $5.2 billion to $26.7 billion while operating profit shot up from a loss of $255.8 million to $2.4 billion.

The profit was boosted by the newspaper division which turned around from a loss of $413 million to a profit of $2.1 billion.

The commercial division did not do well. Its operating profit only increased marginally from $172 million to $262 million but net profit was down from $169 million to $48 million.

The massive operating profit was, however, wiped out by finance charges which totalled $1.2 billion and an exchange loss of $831 million.

The company says the biggest cost was that of newsprint which increased by 600 percent during the year. It says the monetary policy announced by central bank governor Gideon Gono in December had helped reduce the price of newsprint by 10 percent because of the firming dollar.

The company had also benefitted from cheap finance being offered to the productive sector. This had helped improve margins.

The company’s balance sheet was, however, in the negative to the tune of $264.4 million.

It will be interesting to see how the company fares in the first half of this year as its main competitor has been shut down and the company has doubled the cover price for its newspapers.

It is now only facing competition from the Daily Mirror and Sunday Mirror , which seem to be failing to capitalise on the vacuum created by the closure of the Daily News.

Instead, it appears, most people are waiting for the proposed Daily Times.

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