April 18, 2018 / 6:48 AM / in 7 months

UPDATE 2-Kenya's Nation Media plays down columnist resignations

* Chairman says operations unaffected

* Company denies editorial interference by government

* Full-year profit down by a fifth (Rewrites throughout)

By George Obulutsa

NAIROBI, April 18 (Reuters) - Kenya’s Nation Media Group does not expect last month’s walkout by eight columnists over claims of editorial interference by the government to hit its operations, it said after reporting annual results on Wednesday.

Eight columnists resigned from the group’s flagship Kenyan papers towards the end of March, accusing management of letting the government interfere in decisions about the coverage of a heated presidential election last year.

Shares plunged more than 5 percent after the resignations, forcing the group to produce front-page editorials to defend its independence and reassure its customers.

“The exit of three or four or five individuals is neither here nor there,” Wilfred Kiboro, the group’s chairman, told an investor briefing after the company reported a drop in full-year pretax profit.

“Luckily we have a lot of talent from all over the place.”

The biggest news publisher in East Africa, with newspapers, radio and television stations in Kenya as well as Uganda and Tanzania, saw pretax profit drop by a fifth last year as consumers migrated online and advertising slowed in Kenya.

To return to growth the group plans to focus on its digital assets, such as websites, electronic newspaper downloads and mobile phone applications, while maintaining its print and advertising businesses, said acting CEO Stephen Gitagama without elaborating on plans for the digital platforms.

Revenue from digital platforms grew 42 percent last year but accounted for only 4 percent of total revenue. Revenue from the Daily Nation, its most widely circulated newspaper, was down by 10 percent.

Group revenue dropped 6 percent to 10.63 billion shillings ($106 million), hurt by lower advertising revenue, especially in Kenya, where drought, slow credit growth and a prolonged election campaign led to reduced spending by companies.

Chairman Kiboro said the group is struggling with delayed payments from the Kenyan government, traditionally one of its biggest advertisers. The arrears had jumped to about 700 million shillings in the past three years, he said.

“One of the greatest challenges we encountered in 2017 was government debt,” he said.

Kiboro added that Nation Media, which is majority-owned by the Aga Khan Development Network, is not for sale.

“Some of you ... may have read about this crazy thing about Nation Media being sold to the First Family,” referring to the family of President Uhuru Kenyatta.

“I want to confirm to everybody ... Nation Media Group is not for sale. The only way to buy Nation Media is through the stock exchange.” ($1 = 100.3500 Kenyan shillings) (Editing by Duncan Miriri and David Goodman)

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