Ester Mbathera
Meatco has reported an operational loss of N$258.1 million in its group performance for the year-to-date period that started in January 2024.
This loss, excluding a government grant, amounted to a budgeted loss of N$61.5 million.
The company’s bottom line reflects a reduced loss, primarily due to accounting for a state grant of N$135 million received in April, June, and July of 2023.
Meatco during the period under review (2022-2023) slaughtered more than 60 820 cattle including animals behind the red line, compared to a budget of 50 000.
According to the group report, the revenue generation fell short of expectations as, south of the Veterinary Cordon Fence (SVCF), the producer price also did not meet projected figures.
Meatco also sold 16 206.26 tonnes of beef and beef products, but the price per kilogramme remained below budget at N$68.74/kg compared to the anticipated N$74.84/kg.
Of the N$1.2 billion in sales, the company paid producers N$928 million.
According to the report, this disparity in revenue generation, along with high overhead and finance costs, has put pressure on the company’s margins.
During the period under review, Meetco faced challenges in livestock procurement and production, particularly in delivering consistent product quality to the market.
Meatco developed an Integrated Strategic Business Plan (ISBP) for 2021/22–2025/26 following the review of the corporation’s Strategic Plan for 2019–2023/24.
The company, according to the group financial statements, incurred an operating loss before tax of N$131.4 million in 2023 versus N$182.6 million in 2022, while the group operating loss stood at N$117.8 million in 2023 against N$206.3 million in 2022.
According to the report, the group’s ability to continue as a going concern is dependent on several factors.
“The affirmation of the Ministry of Finance and Public Enterprises to remain committed to continuously supporting Meatco as a going concern. The directors must continue to devise strategies to obtain working capital funding, improve liquidity, generate positive cash flows from operations, and effectively manage working capital for the continuing operations of the group”, read the report.
In their independent auditor’s report on Meatco’s financial statements, Grand Namibia Chartered Accountants & Auditors gave an unmodified opinion.
The firm also emphasised that Meatco’s ability to continue is a going concern, and maintaining sustainability relies significantly on continuous support from the government.
Last year, the Cabinet passed a resolution to approve short- and long-term strategies to ensure the survival of Meatco.
One of the strategies was to appoint an interim board.
The board was appointed in September and was mandated to develop a turnaround strategy that would assist the company in overcoming its financial difficulties.
At the time, Meatco was also struggling to pay the cattle producers.
The term of the interim board ended on 30 April.
Johnathan Swartz, a spokesperson for the Ministry of Finance and Public Enterprise, did not respond to questions sent to him.
The Windhoek Observer sought to know when Meatco will appoint a substantive board and whether the interim board met expectations.
Meanwhile, the term of the company’s chief executive, Mwilima Mushokabanji, is ending in January 2025.
By the time this article was published, Mushokabanji had not responded to questions sent to him.
