Meatco posts N$109 million profit for first quarter

Meat processor and exporter Meatco has returned to profitability for the period ending May, as indicated by quarterly results, defying projections that the company would incur losses of up to N$85 million for the period. The company posted a profit of N$109 million for the quarter.The unaudited profit and loss statement, seen by Namibian Sun, indicates that the cooperative was able to generate N$560 million in terms of overall sales volumes against a projected N$284 million.Meatco’s subsidiary company, Namibia Meat Importers and Exporters (NMIE), was, however, not able to replicate the success of its parent company, posting a loss of N$420 000. Similarly, the cooperative’s efforts to successfully market cattle north of the veterinary cordon fence (VCF) in the northern communal areas (NCAs) did not turn a profit, posting a loss of N$2.9 million.Looking aheadIn April, it was announced that meat from the NCAs would be ready for export to Qatar pending the finalisation of halal accreditation.Deputy agriculture minister Anna Shiweda confirmed this during her motivation for the ministry’s budget. She said the ministry succeeded in securing market access for meat from the NCAs to Qatar and that the Rundu abattoir has been handed over to Meatco as an operator, as per a Cabinet resolution.“This abattoir was registered as an export abattoir in March 2024 and is ready to export to Qatar once the halal accreditation has been finalised,” she said. In addition, the ministry also secured an export market to the United Arab Emirates for meat south of the VCF.Turning a cornerReacting to the company&#039;s latest financial results, Meatco board chairperson Sakaria Nghikembua, said: “The board has implemented a turnaround plan whose objective is to secure the financial sustainability of the company so that it can play a meaningful role in the economy. The board is focused on the rigorous implementation of that plan."While the results are an indicator that Meatco is on the mend, Nghikembua said much work still lies ahead.“We are slowly turning the corner and are optimistic about the future. However, it is too early to talk about the sustainability of the results, especially given the seasonality of the markets into which we sell. The board is determined to ensure that, in the long term, the company is sustainably turned around,” he said.As of late last year, Meatco found itself in an insolvent position, with recurring gross losses, including a N$90 million loss. It was on a collision course with producers, who are the mainstay of its existence. But the company has drastically reduced its debt, including clearing N$437.3 million owed to the Development Bank of Namibia.The latest financial results are expected to ease pressure on Meatco CEO Mwilima Mushokabanji, who faced calls for suspension last year. He has been at the helm of Meatco since 2020, on a contract running until 2025. Mushokabanji declined to comment on the latest financial performance, saying he would need permission from the board to pronounce himself.Strong competition The results come nearly a year after agriculture minister Calle Schlettwein questioned the cooperative’s ability to recover due to it being technically insolvent.“Meatco is currently technically insolvent, with its debts having surpassed its assets. A recovery out of own resources and with current structures in place is highly unlikely,” Schlettwein said at the time at a ministerial strategic and annual planning workshop in Swakopmund.He said despite having a de facto monopoly, Meatco did not perform adequately in comparison to its competitors.“This situation has changed since market forces made the opening of privately owned abattoirs and beef marketing entities possible. Beefcor, a privately owned entity, has already surpassed Meatco in cattle slaughtered. Savanna Meat, a further entity, has been registered, which will increase competition. The result is a sharp decline in market share, which in turn brought about serious loss-making,” Schlettwein said.

Meatco posts N$109 million profit for first quarter

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Namibian Sun 2024-11-25

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Meatco posts N$109 million profit for first quarter

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Namibian Sun 2024-11-25

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