Total
0
Shares
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Macquarie will continue to operate within its profit guidance, flagging an end to its six year run of record profits
  • At this week’s investor presentation, the company announced its half year profits for the 2020 financial year lowered by 13 per cent at $1.46 billion
  • However, this is a full year increase of 11 per cent and in line with the company’s financial guidance published back in May
  • Chief Executive Shemara Wikramanayake maintained the company saw increased client activity across the commodities and global markets
  • Shares in the company lowered today by 1.63 per cent to trade for $131.74 each

Macquarie’s profits for the first half of the 2020 financial year are down by 13 per cent on the corresponding period.

The company revealed its half year profits reached a figure of $1.46 billion. While this is a 13 per decrease from the second half of financial year 2019, it’s an 11 per cent increase on the full year.

Macquarie Group Chief Executive Shemara Wikramanayake said the company saw increased client activity across standout markets despite the profit decrease.

“Our first half result highlights the benefits of the business and geographic diversity of the group, with increased client activity across many of our business lines and favourable market conditions across the commodities and global markets platform in particular,” Shemara said.

Profit contribution for the company is also down by 56 per cent from the previous period, to $223 million.

Macquarie management attributed this to lower fee and commission income in capital markets due to “a small number of underperforming investments”.

Macquarie Group CEO Shemara Wikramanayake at the company’s investor presentation this week
Image sourced from Macquarie Group

Shemara maintained a stoic outlook at this week’s investor presentation regardless.

“Macquarie remains well-positioned to deliver superior performance in the medium term due to: our deep expertise in major markets; strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions; the ongoing program to identify cost saving initiatives and efficiency; a strong and conservative balance sheet; and a proven risk management framework and culture,” she said.

The outlook this week for the company shouldn’t be a shock to punters either, as Shemara did warn the market for a “slightly down” full-year result towards the end of 2018 back in August.

This warning was consistent with the company’s published profit guidance in May, which flagged an end to the company’s six year run of record profits.

Regardless of the rocky numbers, the company is still dishing out higher interim dividends from last year: $2.50 per share, up from 2018’s $2.15.

“Macquarie remains well funded with a solid and conservative balance sheet characterised by term liabilities exceeding term assets,” Company Chief Financial Officer Alex Harvey reinforced at today’s presentation.

“We continue to pursue our strategy of diversifying funding sources by growing the deposit base and accessing a variety of funding markets,” he said.

Shares in Macquarie have slightly rocked on the Australian market today, trading lower by 1.63 per cent at $131.74 each.

MQG by the numbers
More From The Market Herald
Woodside (ASX:WPL) - CEO and MD, Meg O'Neill

" Woodside (ASX:WPL) to spend $5b on new energy by 2030

Woodside Petroleum (WPL) will invest $5 billion into emerging new energy markets by 2030, as part of a wider transition to renewables.

" Aus Post & Qantas (ASX:QAN) boost freighter network

Australia Post and Qantas (QAN) are teaming up to boost the country’s shipping network, announcing the conversion of several passenger planes into freighters.

" Bapcor (ASX:BAP) CEO departs early as relationship with board becomes “untenable”

Bapcor (BAP) has brought forward the date of its CEO and managing director’s retirement after an alleged “deterioration in the relationship” between the
Zimplats (ASX:ZIM) - CEO, Alexander Mhembere

" Zimplats (ASX:ZIM) budgets A$2.7b for projects over 10 years

Zimplats (ZIM) has announced the Board has approved a capital investment strategy with a budget of US$1.8 billion (A$2.7 billion) to be implemented...