State-owned meat supplier Kenya Meat Commission (KMC) slid into a loss before tax of Sh365.6 million in the year to June 2024, reversing the prior year’s pre-tax profit of Sh180 million.
The poor performance in the review period has been attributed to drought, which affected the quality and availability of cattle.
The firm’s sales declined by 39 percent to Sh1.7 billion from Sh2.78 billion, according to the latest report by the Auditor-General Nancy Gathungu.
The company’s management says that part of the decline in sales was due to delayed payments by government entities, which are among its key clients.
“Management attributed the decline in sales to climate change, which caused prolonged drought affecting the quality and availability of the cattle, change of payment period from 72 hours to 30 days, and delayed payment by government institutions supplied with meat,” said Ms Gathungu in KMC’s audit report for the year to June 2024.
“In the circumstances, the profitability of the Kenya Meat Commission is dependent on government support in the short term.”
This marks KMC’s first loss since the military took over in 2021 in an attempt to reverse years of losses blamed on mismanagement.
The year ending in June 2022, the first full year one under military leadership, marked the firm’s best performance in decades, with a profit of Sh242 million. This overturned a loss of Sh34 million the year before.
However, in January 2023, President William Ruto reversed the military’s takeover, moving KMC from the control of the Ministry of Defence back to the Ministry of Agriculture under the State Department of Livestock Development.
Records at the National Treasury show that, although the firm had been in the red for over a decade, its financial position began to improve in 2019, leading to a cut in its losses from Sh117 million in 2019 to Sh96 million by June 2020.
The trend continued into 2021, when the meat supplier’s losses decreased further to Sh34 million, before it turned a profit of Sh242 million in 2022.
However, the upturn was short-lived, with profits dwindling to Sh180 million in 2023 before reversing to the loss recorded in the review period.
KMC has yet to disclose its results for the year ending June 2025 and audit reports are often delayed before publication.
The financial performance could jeopardise plans to privatise the State corporation, which are intended to improve its long-term efficiency and viability.
