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Monday, May 1, 2023 –Moi family-owned media station, the Standard Group, is headed to insolvency state over its current deeper financial turmoil.
The company books say, there was an increase in the provision for expected credit losses, due to pending government bills. Consequently, the Group incurred a loss before tax of sh 1 billion compared to a loss before tax of sh 22 million in 2021.
After factoring in taxation, the loss contracts to sh 865 million, though not strong enough to get it out of the deep end of the red ink. What is worrying is the fact that it’s current assets, just at sh 1.6 billion, are three times less than its current liabilities at sh 4 billion. Technically speaking, therefore, Standard Group is insolvent.
From the latest record released, the company recorded a record loss for its business, touching off panic in the board and among employees and investors over the company’s uncertain fate. The company, which runs Kenya’s second biggest newspaper The Standard, had its loss balloon to sh1 billion for the period ending December 2022, from just sh 22 million in 2021. It’s the biggest loss in its over 120-year history.
According to the Group’s financial results for the period, total revenue for the Group decreased 13% to close at sh 2.7 billion from sh3.1 billion the previous year, while total costs increased by 17% driven by an increase in the cost of production.
To save Standard from implosion, financial experts say the company needs a cash injection of up to sh 1 billion. This won’t be an easy feat with investors jittery and the financial markets frowning at traditional media companies. Standard is also currently servicing previous loans that keep devouring its earnings.
