SYDNEY: Australia's Macquarie Group Ltd on Tuesday (Feb 7) posted substantially higher profit contribution from its commodities business in the third quarter, but said that market conditions make forecasting short-term outlook difficult.
The Sydney-based bank said year-to-date net profit after tax rose slightly on record previous year as its top profit generating Commodities and Global Markets (CGM) business benefited from an unusually volatile market, particularly in global gas & power and oil products.
Shemara Wikramanayake, the group CEO, said “varied market conditions have resulted in a good quarter”.
Shares of the company opened 2% higher on Tuesday, with the broader market largely flat.
UBS analysts said the result was better-than-expected with the financial conglomerate benefiting from a diverse global footprint that spans retail banking, M&A, infrastructure investment and commodities trading.
Macquarie, also the world’s top infrastructure investor, does not disclose profit numbers in quarterly updates.
Combined quarterly net profit contribution of Macquarie’s annuity-style businesses was substantially down on the prior period due to the absence of larger green energy sector asset realisations in asset management.
The bank maintained a cautious stance to short-term outlook, with a “conservative approach to capital, funding and liquidity” in response to the current environment.
It sees a substantial decline in transaction activity in fiscal 2023, which, combined with lower revenue from asset realisations, could impact its market-facing Capital business.
Macquarie said its short-term outlook could be influenced by the global economic conditions, inflation and interest rates, and significant volatility events. – Reuters
