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Cash strapped Botswana Meat Commission (BMC) has listed cyclone Dineo as one of the factors that contributed to its continued loss of profit.
Tropical storm Dineo hit Botswana in 2017 and brought heavy rainfall to some parts of the country.
In a report tabled before the just ended Public Accounts Committee (PAC) session, BMC acting Chief Executive Officer Dr Boitumelo Masego Mogome revealed that the Commission has embarked on reforms to drive performance and in the same protect shareholder value.
“However, such have been discounted or undermined by climatic spells such as the Dineo Cyclone, disease outbreaks in the Northern part of the country as well as drought spells all of which reduced throughput to BMC between 2017 and 2018,” she said.
She added that this was even extended by declining confidence on the BMC to pay farmers within market prescribed payment terms.
She said although a lot has been done by Government together with BMC, to improve on the beef industry as a whole in Botswana, the industry is still laden with a lot of challenges that requires collaboration between all the relevant stakeholders to ensure value creation.
“Some of these challenges at the forefront include: declining cattle population in the country, low quality cattle with low carcass weights, leading to high cost of production per head, seasonality of supply and prolonged drought, age of BMC processing plant and Cash-flow concerns at business level, necessitated by gaps between payables and receivables,” said Mogome.
Commenting on the financial position of the Commission Mogome said BMC and its group recorded a deficit of P238 Million for the year ended 31 December 2017 and a deficit of P229 Million in 2016.
“This is an increased loss position of 8% between the two years. The BMC suffered some impairment of its asset after an assessment of its future ability to generate future cash flows proved that BMC will not be able to generate cash flows as much as it used to especially with the challenges around Francistown to attract desirable cattle numbers,” she said.
Mogome revealed that BMC livestock and Meat costs reduced from P852 million in 2016 to P769 million in 2017.
“This is due to the reduction in throughput where only120, 600 cattle were slaughtered against 140,277 of 2016, a reduction of 14%,” she said.
According to Mogome, the financial results of BMC for 2018 are still under audit and a report on the same will be provided to the Committee once the audit is finalized.
“The cash flow position of the BMC continue to be constrained from the aftermath of the previous losses together with the deteriorating throughput and this calls for continued Government support until all challenges have been addressed and the privatization effected,” said Mogome.