Strong Nam Dollar ‘Slaughters’ Meatco Profits By 250 Percent

Jo-MarÉ Duddy

28 June 2011

THE unfavourable exchange rate caused Meatco’s loss for last year to skyrocket from N$17,9 million in 2009-10 to N$62,6 million, the corporation’s latest financial report shows. The figures represent a whopping increase of 250 per cent.

In the results, released last Thursday, chairman Clara Bohitile said the strong Namibia dollar against the US dollar cost Meatco N$174 million in 2010.

Despite the hard times, Meatco paid producers more, chief executive officer Kobus du Plessis said. The corporation still paid all producers N$47,7 million above the equivalent South African parity price.

According to Du Plessis, the proportion of Meatco’s earnings paid to producers last year therefore rose to 72,7 per cent compared to 63,8 per cent the previous financial year.

Sales revenue for 2010-11 remained “static” on reduced volumes at about N$1,3 billion, down about six per cent, he said.

Du Plessis said Government’s decision to split and allocate the Namibian portion of the Norway quota evenly between the Witvlei Abattoir and Meatco also ate into the corporation’s profits.

Meatco ‘lost’ N$30 million in the process. This translates into more than N$1 per kilogram that all producers would have earned, he said. Meatco’s cash flow for the year was N$82,1 million.

According to the financial statements, throughput of cattle supply in the areas south of the Trans Veterinary Cordon Fence decreased to 114 150 last year (2010: 117 567).

The average cold dressed weight marginally decreased to 244,2 kg (2010:248,5 kg), resulting in actual throughput of 28 714 tonnes (2010: 29 216 tonnes).Cattle supply in the areas north of the Trans Veterinary Cordon Fence increased to 15 243 (2010: 9 083).

The average cold dressed weight increased to 182,2 kg (2010: 178,1 kg), resulting in actual throughput of 2 777 tonnes (2010: 1 618 tonnes). Du Plessis said Meatco will be “very well positioned” in future provided the exchange rates turns for the best.

“Over the past five years, the basic business has undergone major changes that have established new competitive capabilities in areas such as processing, quality assurance and marketing, and these have made Meatco internationally competitive and able to compete with the best,” he said.

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