(Reuters) -Australia’s Macquarie on Tuesday posted a nine-month profit broadly in line with the year earlier, as weakness in its market-facing divisions countered growth in its asset management and banking units.
The country’s largest asset manager said net profit contribution from its commodities trading division, which has been a core earnings engine in recent years, fell significantly in the third quarter due to subdued conditions in certain commodity markets.
Unfavourable impact of timing of income recognition primarily on North American gas and power contracts also led to a decline in profit, it said.
Macquarie is one of the biggest gas marketers in North America. It purchases natural gas and moves it along pipelines and grids, typically from an area where usage is low to high-demand markets.
“The result also included a reduced contribution from risk management income, primarily in EMEA Gas, Power and Emissions and Global Oil as price movements stabilised across commodity markets,” the company said.
The weakness in its commodities division was partially offset by higher fee and commission income in Macquarie Capital, which offers advisory and capital-raising services.
Higher performance fees and investment income led to profit growth in its key asset management arm, while continued volume growth and lower operating expenses led to increased profit contribution from its banking and financial services division for the nine-month period.
Macquarie Asset Management oversaw A$942.7 billion ($591.64 billion) worth of assets as of December-end, up 3% from September 30, it said.
Also the world’s top infrastructure investor, Macquarie does not disclose earnings figures in quarterly updates.
($1 = 1.5934 Australian dollars)
(Reporting by Himanshi Akhand and Aaditya Govind Rao in Bengaluru; Editing by Shilpi Majumdar and Alan Barona)
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