Maputo — The company Sociedade Noticias, which publishes Mozambique’s main daily paper “Noticias”, and its sister publications, the Sunday paper “Domingo” and the sports weekly “Desafio”, is effectively bankrupt, according to the company report and accounts for 2016.
In recent years the company’s losses have been accumulating, and in 2016 Sociedade Noticias made a loss of 52.28 million meticais (857,000 US dollars, at current exchange rates), which was a 20.3 per cent increases on the losses in 2015 of 43.44 million meticais.
These accumulated losses cannot be compensated for by the company’s reserves. The company’s own capital has now slipped deeply into negative territory. At the end of 2016, it was minus 95.09 million meticais.
The report on the accounts from the independent auditor points out that this is lower than the limit stipulated in the Mozambican Commercial Code. This should oblige the Board of Directors of Sociedade Noticias to propose dissolution of the company to the shareholders unless they can, within 60 days, raise sufficient capital to fill the gap.
Failure to do so, the auditor points out, means that any creditor or shareholder can ask a court to order the dissolution of the company, which will take effect if the shareholders do not correct the situation within a further 90 days.
All forms of income for the company fell in 2016. Sales of papers were down by four per cent, and advertising down by five per cent.
“Noticias” itself held up reasonably well, suffering a loss of only two per cent in its sales over the 2015 figure. But sales of “Domingo” fell by 10 per cent, and of “Desafio” by a disastrous 18 per cent.
But no paper can survive without advertising, and advertising in “Noticias” fell by four cent and in “Domingo” by 28 per cent. “Desafio” bucked the trend with an increase in advertising of 10 per cent – but “Desafio” is very much a minor component of the group.
The print run of all the papers declined – by eight per cent for “Noticias”, 24 per cent for “Domingo” and 20 per cent for “Desafio”. A source in the “Noticias” management told AIM that the circulation for the daily paper now averages 12,000 a day – a small figure for the main daily paper in a country with a total population of around 27 million.
The company did manage to cut its costs by 3.43 per cent. This was mostly due to a 7.22 per cent reduction in staff costs, achieved by reducing the number of employees from 415 to 385.
“Noticias” is not alone in feeling the pinch. Most other Mozambican papers are suffering from low and falling circulations. Complete information is hard to obtain since there are no audited circulation figures.
The only rival to “Noticias” as a national daily, “O Pais”, owned by the company Soico, is believed to have a circulation of about 2,500. But it has clearly saved money by fully integrating its operations with the television station STV, and by urging customers to subscribe to its online edition.
Of the weeklies, the independent “Savana” heads the field with a circulation of about 10,000. Others are in a precarious position, and some simply collapse. This was the case, for example, with “Estrela” which published for a few months and then sank without trace.
The most likely saviour for Sociedade Noticias is the state. The main shareholder in the company used to be the Bank of Mozambique. But in August the bank handed its shares over to the Institute for the Management of State Holdings (IGEPE). This removed the pretence that Sociedade Noticias is a private company, and made IGEPE responsible for the future of the papers.
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