Macquarie sees more commodities unit strength after profit jumps By Reuters

(Reuters) -Australia’s Macquarie on Friday forecast higher short-term income from its commodities trading business, after the unit tapped volatile oil and gas prices to boost profit in the first half.

Financial conglomerates such as Macquarie have benefited from sharp volatility and supply chain disruptions in commodities markets that began in 2020 and increased this year with Russia’s invasion of Ukraine.

The Sydney-based firm’s Commodities and Global Markets (CGM) segment delivered a net profit contribution of about A$2 billion, 15% higher than last year, thanks to more clients hedging against volatile energy markets. The company also raised its interim dividend.

Chief Executive Shemara Wikramanayake said Macquarie maintains a cautious stance on account of global economic developments, but it “remains well-positioned to deliver superior performance in the medium-term”.

The financial conglomerate’s attributable profit for the six months to September was A$2.31 billion ($1.49 billion), compared with A$2.04 billion reported a year ago and a Refinitiv IBES estimate of A$2.19 billion.

It declared an interim dividend of A$3 per share, compared with A$2.72 last year.

However, earnings at Macquarie Capital, which runs capital raisings for other businesses, tumbled 12% due to weak market conditions and higher operating expenses. Steep interest rates to tackle stubborn inflation have weighed on global economic growth, discouraging companies from tapping public markets for capital.

Macquarie also warned that transaction activity at the segment would be substantially lower in the short-term, compared with record levels seen last year.

($1 = 1.5506 Australian dollars)