Macquarie energised by $2.3bn windfall

MACQUARIE Group has delivered a better-than-expected interim profit of $2.3bn, underpinned by bumper levels of client hedging in volatile gas and power markets, but stopped short of providing full-year earnings guidance.

The asset management and investment banking giant reported a 13 per cent increase in profit to $2.3bn for the six months ended September 30, compared to $2.04bn in the same period a year earlier.

Macquarie declared a firsthalf dividend of $3 a share, which was up on the interim $2.72 payment this time last year and lower than a final dividend of 3.50 a share.

Analysts were expecting a first-half profit of about $2.2bn and interim dividend of

$2.95 a share.

Net operating income was $8.6bn in the six months ended September 30, up from $7.8bn in the same period last year. Operating expenses increased 11 per cent to $5.61bn as Macquarie added staff and navigated higher wage costs.

Barrenjoey analysts labelled the Macquarie profit a “strong result” noting that three divisions beat consensus estimates.

The “market should focus on strong performance in CGM (commodities and global markets) and ‘ commodities income expected to be up following a strong 1H23’,” they said.

The profit result was driven by a strong performance in Macquarie’s commodities and global markets unit which saw its profit contribution climb 15 per cent in the period, compared to the first half last year.

That reflected a “strong risk management contribution” across the commodities platform, particularly from the gas and power, resources and global oil businesses, as client hedging activity rose, Macquarie’s statement to the ASX said.