INTERVIEW-Nation Media sees double-digit profit rise in 2010

* Sees double-digit profit rise from print, broadcast-CEO

* Says 8-10 pct media growth in next five years

* Says new title, regional ops to break even this year

* Eyeing entry into South Sudan, Rwanda and Zambia

* Possible TV acquisition in Tanzania

By Duncan Miriri

NAIROBI, July 14 (Reuters) - Nation Media Group (NMG.NR: Quote) expects double-digit profit growth this year to come from increases in print and broadcast revenue, and its Tanzania and Uganda businesses to move to black, its chief executive said.

Nation, the largest media house in east Africa, posted a 15 percent fall in profit last year, dragged down by smaller advertising budgets due to sluggish economic growth and cash-guzzling investments at home and in neighbouring countries.

CEO Linus Gitahi said a benign economic growth outlook and lower costs of newsprint this year would add to the momentum from buinesses breaking even in neighbouring nations and in Business Daily, a Kenyan title launched in 2007.

"Since the top line is also growing and the middle line (costs) is shrinking, I expect to deliver pretty good results to the market this year ... high double digits (pretax growth)," he said in his office, one floor above the bustling newsroom where journalists churn out such papers as Daily Nation and The East African.

The CEO said Nation would release its half-year results soon. The company does not release quarterly figures.

The company's print division posted a 34 percent expansion in revenue during the first half, helped by growth in advertising and circulation, at home and in the regional market which The East African targets.

The group's Tanzanian newspaper operations did well in the period, Gitahi said, adding Nation TV in Uganda would break even in 2010, a year ahead of schedule.

He defended the performance of NTV Kenya, which according to some analysts has lost viewers to rival Citizen TV, saying the channels had different target audiences and total advertising revenue was evenly shared.

GONE ONLINE

Nation is using some of its 2 billion shillings ($24.52 million) war chest to spearhead its a two-year old digital division of 15 staff push into new media.

The division is responsible for the group's websites, breaking news alerts for mobile phones and developing digital strategies for other firms.

It is operating at a loss despite a revenue of 25 million shillings a month, but Nation wants it to keep trying fresh ideas, Gitahi said.

"All this is new business. It's still challenging but we want to invest more. I want them to continue on experimenting in the foreseeable future because we can afford it," Gitahi said.

"People have gone online but that content is free and the (advertising) clients have not realised that is a formidable way of advertising as the traditional paper."

He said media firms around the world were trying to figure out how to respond to the growing power of the internet.

"We no longer have big brothers to teach us. We can teach them and that is the attitude we have adopted. We need to relate with people in the internet, we need to develop products and services, and we need to make money," Gitahi said.

However, traditional media will continue to dominate for awhile yet, he said.

"Expecting a growth (for print media) of 8-10 percent year-on-year for the next five-ten years is not unrealistic," he said.

Nation Media will invest $4 million in a new printing press in Uganda and spend another $1.5 million, upgrading its printing facility in Kenya, the CEO said.

It is also looking to start television broadcasts in Tanzania, possibly through an acquisition, and launch in south Sudan and Zambia over a period of two to three years, Gitahi said.

He also said the company was negotiating with the Rwandan government for a normal free to air licence after it was granted a digital licence in the country, where viewers have not yet switched to digital broadcasting. ($1=81.55 Kenyan Shilling) (Editing by George Obulutsa and Karen Foster)