Problems on hold
I usually write this column in my capacity as Editor-in-Chief of Watani. Occasionally however, I find it necessary to write as Chairman of the Board of Watani Corporation for Printing and Publishing, the joint-stock company that owns Watani. Today, I transparently address Watani readers and shareholders regarding the financial situation of the corporation, which figures in detail in the financial statement of 31 December 2017, printed in full in the Arabic version of this issue.
The 2017 figures show a 9 per cent decline in revenue compared to 2016, and an 11 per cent increase in expenses for the same period. Carrying forward the accumulated losses of previous years brings the total loss to more than 160 per cent of the capital. This impacts the shareholders negatively.
The situation is not uncommon in the field of journalism where it is a well-known fact that the cost of issuing papers exceeds their selling price; the main revenue comes from advertisements. In case of Egypt, papers have suffered on two major counts: revenue from advertising dropped with the economic crunch in the wake of the 2011 Arab Spring uprising, and costs soared with the economic reform measures that included floating the Egyptian Pound in November 2016. For Watani, the price of paper and cost of printing rose 80 per cent, while advertisements and subscriptions dropped 8 and 28 per cent respectively, and circulation increased 9 per cent.
These figures negatively affected the 2017 budget. The auditors report said: “Owing to the fact that the losses of the corporation have exceeded the value of the shareholders’ rights, the corporation should hold an extraordinary general assembly to decide whether or not it should stay in business, and how to recover the losses.” The invitation for an extraordinary general assembly has been sent out to the shareholders and included the auditors’ comments. The shareholders will be required to look into whether the corporation should be dissolved or should continue its activity, and to consider doubling the corporation’s capital if they decide it should stay in business.
This is not the first time the financial status of the corporation required that shareholders be consulted on whether it should be dissolved or should remain in business. In 2015, an extraordinary general assembly convened for this purpose and the shareholders represented unanimously decided that the corporation should stay in business. They confirmed their faith in Watani as a near-60-year-old mission—Watani was founded in 1958—not a commercial for-profit commodity. As such, they decided to support the paper as a national Coptic media platform.
In this context, Watani again aspires for the support of its shareholders, readers and fans in order to override the dire financial straits it is crossing. The paper needs a vote to allow it to stay on the market, and financing to raise its capital in order to provide sufficient cash flow to overcome losses. Watani is also after more advertisements in order to boost revenue and retain the paper’s selling price unchanged. As to annual subscriptions, it will be impossible to maintain their value as is, since we were contacted by the post authority last December to announce that freight fees have increased three folds, meaning that subscription values should increase accordingly since the corporation can in no way absorb this increase while keeping the paper’s selling price unchanged. We thus had to reset the subscription value since the issues are sent to subscribers inside and outside Egypt by post. I hope Watani subscribers would understand and tolerate the rise in subscription fees.
As I already mentioned, I today address Watani readers, subscribers and fans in all candour and transparency, and look forward to their support in order to overcome the current challenges and carry on with our mission.
15 April 2018