Qatar's Hassad defends Australian agriculture investment results

Hassad Australia's chief executive John McKillop has defended the company's financial results. (Photo: Glen Hunt)
Australian Financial Review | 13 March 2016

Qatar's Hassad defends Australian agriculture investment results
by Matthew Cranston
The Qatar backed agricultural land and food producing company Hassad has defended its financial record in Australia following a report which showed its property company had never made a profit.
Hassad Australia's new chief executive John McKillop said Hassad's operating company which is separate to its $470 million property company had shown profitability and combined the overall success of Hassad was a major achievement.
"We are not in the habit of commenting on our accounts however whilst our property company has run losses our operating company has had profits in recent years and overall the venture has been successful," Mr McKillop said.
Last week The Australian Financial Review reported that Hassad's property company which has purchased, 300,000 hectares of rural properties across Australia since 2010, had never made a profit.
"Any investment in agriculture that involves aggregating smaller farms into larger scale operations is going to experience a period of losses whilst the redevelopment is undertaken," Mr McKillop said.
The property company is likely to have been running losses due to scheduled depreciation of assets authorised by the Australian Tax Office.
However, Hassad's operating company has been much more profitable. In the full 2015 year the operating company, which produces sheep and cereals, made a $4.87 million after tax profit. In the preceding year it posted a $4.18 million profit. However it sustained a $5.99 million loss in 2013 following an $11.87 million loss in 2012.
The results of such a company, which is backed by Qatar's $US256 billion ($341 billion) sovereign wealth fund the Qatar Investment Authority, are closely scrutinised by industry participants. They come at a crucial time in Australia's agricultural sector, where there is a debate about whether superannuation funds should be investing more in farm enterprises.While Hassad is unlikely to expand its rural property portfolio much further in the foreseeable future the company's original target was to acquire enough capacity to ensure an annual supply of 150,000 lambs and 50,000 tonnes of grain.
Hassad, which now owns 14 rural land aggregations – some for which were purchased from Swire Group's Clyde Agriculture, urged the federal government in 2013 to rethink policy on foreign land purchases.
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