NAMIBIA – Meat Corporation (Meatco), a state-owned meat processing and marketing entity in Namibia, has reported a loss of N$118 million (US$8.21m) for the year ended January 2021 financial year.
The dip in bottom-line performance is due to the dwindling number of cattle slaughtered during the period under review, dropping by 60% heads of cattle.
According to reports by The Namibian, the huge slash of slaughtered animals has led to the meat processor earning N$873 million (US$60.75m) in revenue, compared to N1.78 billion (US$123.87m) realized in the previous corresponding period from the slaughter of 116,000 animals.
Although sales dropped by over N$911 million (US$63.4m), gross profit margins increased from 4% to 8.7%. Meanwhile, gross profit marginally shot up to N$75.9 million compared to the previous year’s N$72.9 million (US$5.07m).
Meatco’s cost of operations was N$797 million (US$55.4m), with the administrative expenses standing at N$167 million (US$11.62m), slightly lower than N$171 million (US$11.9m)expended in 2020.
The company also earned N$19 million (US$1.32m) from other incomes, but when matched against finance costs of N$47 million (US$3.27m), it was hit by a N$118 million (US$8.27m) loss for the year.
Meat seeks to boost productivity
In quest for a positive turnaround of the company’s earning, Meatco seeks to push for more production from emerging producers in the Otavi, Tsumeb, and Grootfontein areas, as they can potentially deliver an additional 10 000 slaughter cattle to the slaughter house every year.
Also, the company is committed to signing supply contracts with feeders in a bid to sustain its operations during the off-season between October and January.
This stream has the potential to deliver 30 000 head of cattle and reduce the number of weaners exported to South Africa annually.
The Southern African country is gradually becoming a weaner-exporting country recording 66.8% rise in export of live animals in the past few months.
This was revealed by the Meat Board of Namibia, indicating that the country exported 45 623 live animals in the first five months of the year, while local slaughtering stood at 29 379 head of cattle for both export and local consumption.
Out of the total live animals exported which was 66.80% higher than the previous comparable period, 44 103 cattle were sold to South Africa and the rest to Angola.
In turn, South Africa was the leading supplier of beef to Namibia, alongside Europe and Australia, with the semi-arid country importing 912, 875 kg of beef.
In terms of exports, Namibia has sold 1.8 million kg of beef from the slaughtering of 18 ,156 head of cattle by the end of May.
This is a decrease from the 3.3 million kg of beef sold last year from slaughtering of 23, 396 head of cattle.
The decline in slaughter animals has seen beef prices rising, with the B2 beef price recording the highest level in May.
The trend has been catapulted by the primary producers shying away from sale of slaughter-ready animals due to unfavourable earnings.
To avert the situation, a price strategy is being formulated to ensure a transparent and competitive pricing structure in line with Meatco’s markets, to attract the right quality product at the right price.
The meat processor aims to develop prices tailored to various market segments in a bid to remain competitive, sustainable and profitable.
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