By Byron Kaye and Sameer Manekar
SYDNEY (Reuters) -Prime Australian funding financial institution Macquarie Group (OTC:) reported its annual revenue fell by a 3rd, the sharpest decline in 15 years, as stabilising power markets hammered its commodities buying and selling unit and it made much less cash promoting inexperienced power property.
The end result on Friday got here after a number of years of blockbuster earnings from the monetary large’s commodities division, which had benefited from unusually unstable European power markets after Russia’s invasion of Ukraine and heightened demand for oil and gasoline in North America.
Revenue from the Sydney-based firm’s principal earner fell 47% within the yr ended March 31. Together with what the corporate stated was a call to maintain inexperienced power property in its broader portfolio, the commodities unit dragged down general revenue by 32% to A$3.5 billion.
The corporate lower its ultimate dividend to A$3.85 per share from A$4.50 a yr earlier.
“It’s obviously been a more challenging environment from a realisation perspective,” Chief Monetary Officer Alex Harvey stated on a name with analysts, referring to inexperienced power asset gross sales.
Shares of Macquarie had been down 2%, towards a 0.6% acquire on the broader market, as analysts famous a sharper-than-expected stoop from the commodities unit however a headline end result that was consistent with forecasts.
“Net, headlines show an inline result albeit quality looks soft,” analysts at Jarden wrote in a shopper observe.
The corporate didn’t give particular revenue steering however stated it anticipated commodities revenue to be “broadly in line” with the 2024 end result within the quick time period and better investment-related revenue from inexperienced investments.
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For Macquarie, “FY24 is a trough year with activity set to rebound in FY25”, Jefferies analysts stated in a observe.
Although Macquarie’s commodities enterprise delivered practically half its revenue, the financial institution stated it grew earnings at its Australian retail banking unit, which supplied a couple of fifth of general revenue. The division grew mortgages sooner than the general market and now has 5.3% of the nation’s A$2 trillion in house loans.
The corporate’s funding banking and advisory arm, Macquarie Capital, which provides a couple of sixth of revenue, lifted earnings by 31% due to progress in its non-public credit score portfolio.
The earnings downturn performed out in declines in pay on the firm nicknamed the “millionaires factory”.
CEO Shemara Wikramanayake, the highest-paid worker, collected A$25 million for the yr, down from A$33 million the prior yr, on account of a decreased revenue share, in line with Macquarie’s annual report that was additionally revealed on Friday.
Macquarie’s former head of commodities and world markets, Nick O’Kane, beforehand the corporate’s top-paid worker, collected A$1 million for the yr, down from A$57 million the prior yr, after leaving the corporate in March with out serving the period of time required to get his revenue share for the yr.
($1 = 1.5228 Australian {dollars})
