S.Kidman & Co makes profit under Gina Rinehart

Article courtesy of the Australian Financial Review

The financial results for Gina Rinehart’s investment provide a promising outlook for the beef industry.

Australia’s largest landholder has turned a $6.2 million profit in the year following its acquisition by Australia’s wealthiest woman Gina Rinehart and her Chinese business partner Cred Pastoral.

The company, called Australian Outback Beef, owns more than 8 million hectares of cattle grazing properties it purchased from S Kidman & Co in 2016 for $386.5 million.

According to reports filed with the corporate regulator the company made a $6.2 million net profit in its first year of operation and paid $7.5 million in taxes.

The financial report also records assets at $418 million in assets with only $29 million in liabilities indicating there is very little leverage or debt in the company.

The directors of Australian Outback Beef including former federal trade minister Andrew Rob, did not recommend a dividend be paid.

The accounts, while having a considerable time lag, are crucial in gauging the success of Ms Rinehart’s ambitious and controversial play in the Australian agricultural sector.

Other billionaires such as Brett Blundy, Andrew Forrest and Gerry Harvey have also all invested heavily in the agricultural sector in the last few years with varying degrees of success.

Mr Forrest’s overarching agricultural group Minderoo owns 1.2 million hectares of grazing land in Western Australia and added another 500,000 hectares in 2015 from the purchase of two stations, Brickhouse and Minilya, near Carnarvon. His Harvey Industries Group, which owns the largest beef processor in Western Australia, made a healthy $3.1 million profit last year.

Brett Blundy bought two huge cattle station in the Northern Territory owned by Macquarie Group’s Paraway Pastoral in a deal worth around $100 million in 2016 and its likely that those properties have increased in value.

However Mr Harvey’s race into dairy farms was not successful with the purchase of a 2000-hectare Coomboona Holsteins operation north-west of Shepparton now on the market for sale after falling into receivership.

The financial results for Ms Rinehart’s investment provide a promising outlook for the beef industry.

Hancock Prospecting owns 67 per cent of the former S Kidman and Co with partner Shanghai CRED having a one-third minority holding.

The Hancock family started their first cattle station in North West Australia, and founded the first port in the area at Cossack on the West Pilbara Coast to enable the cattle trade. Since then Mrs Rinehart has extensively grown the Hancock portfolio of cattle stations.

Last year Hancock increased its portfolio with the $50 million plus deal in the Roma/Mitchell district of Queensland in what was understood to involve some 4750 Wagyu breeders and calves.

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