The Namibian government has spent around N$730 million on the Meat Corporation of Namibia (Meatco) over the past four years, with most of the funds going towards settling the company’s debts.
According to financial analyst Fimanekeni Mbodo, 71% of the funding, equivalent to N$519 million, was used to repay loans, while the remaining 29%, or N$211 million, was allocated as grants to support Meatco’s operational costs.
“The N$519 million for settled loans covers two Development Bank of Namibia loans that were taken out by Meatco and eventually paid by the government in FY2024,†said Fimanekeni Mbodo.
The state-owned meat processor has faced sustained financial strain in recent years, largely due to declining cattle slaughter volumes and fluctuating revenues.
“Cost of sales consistently consumed approximately 97% of revenue across all years, resulting in extremely thin margins that prevented profitability despite revenue fluctuations,†Mbodo explained.
Between 2020 and 2022, Meatco’s cattle slaughter numbers dropped by 68%, while revenue fell by 58%. A partial recovery followed, with 65,427 cattle slaughtered in 2024, generating N$1.2 billion in revenue.
This marked an improvement from the 38,075 cattle processed in 2023 acciording to Mbodo, which brought in N$765 million.
He noted that the unusually high figures in 2020 were due to severe drought conditions that forced many farmers to destock.
“The high figures in 2020 were driven by severe drought conditions that forced farmers to destock their herds, creating an abnormal spike in both cattle supply and revenue,†Mbodo said.
Despite the rebound according to Mbodo, Meatco remained loss-making throughout the period. Losses peaked at N$205 million in 2022, before narrowing to N$68 million in 2024.
The company’s cost structure he said, has continued to exert pressure on its finances.
Employee and finance costs were identified as the largest expenses he noted, with finance costs alone rising by 34% from N$61 million in 2020 to N$82 million in 2024.
“Employee costs, the largest individual expense, remained relatively stable throughout the period,†said Mbodo.
Debt has also weighed heavily on Meatco’s balance sheet. In 2023, liabilities peaked at 92% of total assets before falling to 67% in 2024.
“Meatco’s total assets also declined over time due to equity erosion from repeated losses. The increase in total assets observed in 2024 is attributed to government grants and loan repayments,†Mbodo added.
Export markets have remained critical to the company’s revenue stream, with international markets contributing 79% of revenue in 2024.
“The European Union remained the top destination with 42% of total revenue, followed by Norway at 17% and South Africa at 8%,†said Mbodo.
