# Macquarie posts record profits on higher income from commodities arm
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-05-05
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Macquarie Group sees record profits from commodities trading
Meta Description: Discover how Macquarie Group's commodities trading segment drove their profits to an all-time high, despite market volatility and increased hedging.
URL: https://financedigest.com/macquarie-posts-record-profits-on-higher-income-from-commodities-armhtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-05-04t222610z1lynxmpej430ynrtroptp4australia-regulator-macquarie-bank-1736814065616-compressed.jpg)

# Macquarie posts record profits on higher income from commodities arm

By Praveen Menon and Roushni Nair

(Reuters) -Australia’s Macquarie Group on Friday forecast higher short-term income from its lucrative commodities trading business as price volatility and increased hedging boosted the company’s annual profit to a record high.

The Ukraine war and unpredictable weather in North America have turned Macquarie’s oil, gas and power trading unit into a strong profit-making segment, even if prices fall, due to elevated risk management levels and improved trading.

The Sydney-based firm’s Commodities and Global Markets (CGM) segment [posted net profit of about A$6 billion](https://www.financedigest.com/softbanks-vision-fund-posts-2-billion-profit-share-weakness-casts-shadow.html "SoftBank’s Vision Fund posts billion profit, share weakness casts shadow") ($4 billion), 54% higher than last year, as more customers hedged against volatile energy markets.

In the short term, the company expects consistent contributions from client and trading activity in the [financial markets](https://www.financedigest.com/digital-finance-unlocking-new-capital-in-disrupted-markets.html "Digital Finance: Unlocking New Capital in Disrupted Markets") platform.

Shares of Macquarie were down 1.36%, compared to a broader [market decline](https://www.financedigest.com/global-hid-ballast-market-expected-to-decline-with-a-cagr-of-9-8-in-the-coming-decade.html "Global HID Ballast Market Expected to Decline with a CAGR of -9.8% in the Coming Decade") of about 0.2%.

“Record result, CGM THE standout but question marks on its sustainability,” UBS analyst John Storey said in a note.

Earnings at Macquarie Capital, which runs capital raisings for other businesses, tumbled 47% as the unit logged lower fees due to bleak [market activity](https://www.financedigest.com/the-plant-activators-market-to-witness-steadfast-growth.html "The Plant Activators Market To Witness Steadfast Growth").

Macquarie said in a statement that the earnings were primarily driven by a [strong performance](https://www.financedigest.com/strong-performance-of-investec-lowes-structured-product-maturities.html "Strong performance of Investec / Lowes structured product maturities") from its CGM’s businesses.

Chief Executive Shemara Wikramanayake said the company remained “cautious”, adding that Macquarie’s diversified global operation across annuity-style and markets-facing [businesses set](https://www.financedigest.com/how-to-set-up-your-first-ever-business-without-the-stress.html "How to set up your first-ever business (without the stress)") the stage for “superior performance” in the medium term.

The company’s broader [international business](https://www.financedigest.com/chinas-international-flight-suspensions-leave-travellers-stranded-hurt-businesses.html "China’s international flight suspensions leave travellers stranded, hurt businesses") generated 71% of the group’s profit.

The [financial conglomerate’s profit attributable for the year ended](https://www.financedigest.com/financial-exclusion-the-end-of-the-road.html "Financial exclusion: The end of the road  ") March 31 came in at A$5.18 billion, up from A$4.71 billion a year ago, and beating a Visible Alpha consensus estimate of A$4.96 bln.

It also bumped up its final dividend to A$4.50 per [share from A$3.50 per share a year](https://www.financedigest.com/adidas-shares-leap-on-results-but-ceo-warns-of-bumpy-year.html "Adidas shares leap on results but CEO warns of bumpy year") earlier.

Speaking at an investor briefing, Wikramanayake said the company was “very comfortably capitalised” with a group capital surplus of $A12.6 billion, up from $A10.7 billion in the previous financial [year](https://www.financedigest.com/is-2022-the-year-green-finance-incorporates-climate-risk.html "Is 2022 the year green finance incorporates climate risk?").

($1 = 1.4932 Australian dollars)

(Reporting by Roushni Nair and Rishav Chatterjee in Bengaluru; Editing by Arun Koyyur and Stephen Coates)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---