Qatar's farmland investment Hassad Australia yet to make profit

10 Mar, 2016 06:44 AM
Comments
13
 

Hassad Australia, the $469 million agricultural land company owned by Qatar's sovereign wealth fund, has delivered a $3.46 million loss and is yet to make a profit since beginning in Australia in 2010.

Hassad owns 14 agricultural property aggregations in Queensland, NSW, Victoria, South Australia and Western Australia, totalling about 300,000 hectares of pastoral and cropping land. But every year since beginning the company has made a loss, with a combined worth of more than $27 million.

The results 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 there are plenty of examples of profitable operations, there have been some disasters recently, such as the listed integrated agribusiness Wellard, whose share price has plunged 40 per cent since listing on the Australian Securities Exchange late in 2015.

Hassad's chief executive John McKillop, who took over from Tom McKeon late in 2015, declined to comment on the accounts.

John Corbett, who has been a director of the company since inception, said he was not in a position to comment on the company's accounts.

The company's principal activity is to invest in agricultural land in Australia, mostly in the areas where livestock and and cereal grain production is conducted.

Liberal Senator Bill Heffernan said he was curious about why the company had never made a profit.

"We welcome foreign investment, as long as it is done on a level playing field," Senator Heffernan said.

"[The company results] probably bear inspection from the Tax Office and the Foreign Investment Review Board."

Hassad is very closely watched by the FIRB and was a participant in the federal government's reviews into agricultural land ownership.

The Hassad board is chaired by Nasser Mohamed Al Hajri, who chaired the delegation of the state of Qatar at the World Bank and International Monetary Fund.

The company is a large exporter of sheep meat by air transport to countries such as Qatar.

AFR
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READER COMMENTS

free trader
10/03/2016 6:53:56 AM

Transfer pricing in operation?
The Serf
10/03/2016 8:16:38 AM

so federal politicians were so naive do not realize that foreign investors in Australia's ag sector transfer their profit/produce offshore?? The Chinese are the same they just grow the products here and transfer the product to where they want to sell it - Transfer pricing and transfer commodities is happening and we are the losers - it is happening in the meat processing sector JBS and Cargil are not profitable either, in Australia, profits are being channeled through tax havens - if you want to extract some tax from their Australian production then impose an export tariff on them.
sounds sus
10/03/2016 8:27:14 AM

Qatar's tax rate is 0%. Worth considering...
Archibald
10/03/2016 9:03:27 AM

Yes free trader, The meat might be exported at close to break even and the profit made in the middle east; or big agriculture is not profitable in Australia; or agriculture in Australia needs more foreign investment. Funny none of these seem to benefit Australia!! Whose in control of this mess, the major political parties!!
Jock Munro
10/03/2016 10:05:53 AM

More folly through the sale of our farms to foreign governments.
John Niven
10/03/2016 2:16:00 PM

The NLIS tags and database will tell you all you need to know.
Deregul8
11/03/2016 5:53:43 AM

All the usual xenophobes having their 2 bobs worth. There is no need to leave taxable income on the table when there are soil pHs to rectify, machinery to upgrade, non wetting soils to fix, nutrient levels to replenish, weeds seed banks to decimate, the list goes on. Besides the tax only goes to fund Australia's welfare class, which many posters on here would gladly join as avid socialists. Avoiding tax is not a Qatary invention. It's is entirely Australian
xenophobe nation
11/03/2016 6:03:43 AM

of course the other way to look at it is they are spending their operating profit and generating Australian jobs by reinvesting back into the capacity of their farms. If you're paying tax, then there is a fair chance you are not reinvesting in lime, machinery, and all the other things necessary to maximise future cropping yields.
Mark2
11/03/2016 9:14:10 AM

Good point xeno, there's a lot of truth in what you propose but surely the investors in the Hassad outfit would want more of a return than growth on capital , which leaves us with the distinct and suspicious proposition of transfer pricing.....but ignore it it if you choose, we all lose if we don't own our assets
LTF
11/03/2016 2:55:06 PM

This trick by foreign owned companies is as old as the hills and the Government knows it. They are so zealous at collecting over the top taxes and inventing ongoing penalties for any Australian citizen who dares to work hard and smart enough to put away just enough to survive independent of the Government welfare system, and yet totally ignore foreign companies loading up offshore entities with fake costs so they never make a local profit. Instead they over charge the offshore (Australian) enterprise with fees so all the profits are transferred back home to their tax (free) haven.
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