Macquarie flags lower profit on weak green energy income, shares slip

(Reuters) – Australian investment bank Macquarie Group (OTC:) flagged a lower quarterly profit on Thursday, sending its shares over 4% lower in early trade, as contributions from its asset management business as well as banking and financial services fell.

Macquarie did not disclose the profit figure in its quarterly update, but said low green energy investment-related income at its asset management arm weighed on earnings.

With a softer first quarter, it appears that the management is anticipating further weakness through the 2024 fiscal year, analysts at Citi said in a note.

Macquarie Group said the weak performance of its commodities and global markets (CGM) unit, its biggest earner, was due to reduced trading activity across the gas and power sector.

Commodities income, however, is expected to be in line with fiscal 2022 as volatility in gas and energy markets may create opportunities.

“We think this reflects the collapse in YoY volatility in gas prices, consistent with declining capital consumption in CGM,” analysts at Citi said.

Macquarie Group flagged that trading activity in Macquarie Capital was expected to be up despite a challenging 2023.