Macquarie profits hit by green investments as cost pressures mount

afr.com:

Macquarie’s chief executive Shemara Wikramanayake says the lean environment for asset sales, particularly in green investments, is behind the investment bank’s 38.7 per cent slump in first-half net profit.

The board approved a share buyback of up to $2 billion.

The group’s asset management arm opted to hold back part of its roughly $2 billion worth of assets for a core renewables fund, while market conditions and persistent inflation had hindered Macquarie’s ability to hive-off businesses in the last six months.

Macquarie chief executive Shemara Wikramanayake said fewer asset sales and investments in renewables contributed to the slump in profits. Elke Meitzel

Ms Wikramanayake said the group had renewable power assets to sell in the near term, and added that better conditions for dealmaking last year enabled Macquarie to sell assets earlier than it expected in the 2023 financial year.

“Last year we had some material realisations because [the markets] were more conducive. In the first half [of 2024] we are holding the bulk of those assets … It is important that we have this seed portfolio,” Ms Wikramanayake told analysts at Macquarie’s half-year results on Friday.

In April, Macquarie Asset Management agreed to sell stakes in eight offshore wind farms in the United Kingdom, and in February the division sold its stake in Energie Steiermark for €525 million ($867 million) to the provincial Styrian government in Austria.

Ms Wikramanayake said Macquarie’s green investments included both solar and wind-powered assets that were at different stages of development. Fully operational and profitable assets were primed for sale in the coming months, but sluggish conditions in mergers and acquisitions and rising borrowing costs made