* Macquarie expects profit to jump by up to 10%
* Australian company is second biggest gas marketer in N.
America
* U.S. gas sales turn around profit outlook for the global
bank
(Changes headline)
By Paulina Duran and Jonathan Barrett
SYDNEY, Feb 22 (Reuters) - Macquarie Group lifted
its profit guidance on Monday, sending shares to 12-month highs,
as its large North American energy business profits from the
winter storms sweeping across Texas and other states.
Macquarie said it expects its fiscal 2021 profit to jump by
as much as 10%, after warning just two weeks ago that earnings
would be "slightly down".
The energy business unit, designed to move large quantities
of gas to meet unexpected demand, has single-handedly increased
the overall profit forecast of the global investment bank by
about A$400 million, analysts said.
"Extreme winter weather conditions in North America have
significantly increased short-term client demand for Macquarie's
capabilities in maintaining critical physical supply across the
commodity complex," the company said in a statement.
Macquarie is the second biggest gas marketer in North
America, behind oil major BP. It purchases natural gas
and moves it along pipelines and grids, typically from an area
where usage is low to high-demand markets.
The deadly winter storm that crippled infrastructure and
left millions of Texans without power meant electricity
generators had to compete for natural gas supplies, pushing up
prices sharply in the deregulated market.
The supply crunch has provided Macquarie with an unexpected
windfall.
"Macquarie appears to be capitalising well on volatility and
financial market dislocation," Bank of America Securities
analysts said in a note, as it increased its earnings forecasts
for the Sydney-headquartered company.
Macquarie's performance hurt last year by the pandemic, with
subdued deal-making and deteriorating economic conditions
leading to a rise in impairment charges.
But a strong initial public offering of its majority-owned
data analytics software business, Nuix, late last year and a
fillip in the energy business have helped push its share price
back to pre-pandemic levels.
The company, which also operates Australia's largest asset
manager and investment banking business, is set for extra boost
from a rebound in local M&A activity this year.
Macquarie's shares were 4.31% higher at A$148.39 early on
Monday, the highest level in a year, outperforming a broader
market that was flat. The share price eased slightly in
afternoon trading.
Earlier this month, the Sydney-based financial conglomerate
had forecast full-year earnings for the group to be "slightly"
lower than in fiscal 2020.
Macquarie's Commodities and Global Markets division
contributes close to 40% of its group earnings. Analysts had
previously raised concerns that the pandemic could erode profits
from the division if high energy-use industries shuttered.
(Reporting by Paulina Duran and Jonathan Barrett; Additional
reporting by Shriya Ramakrishnan; Editing by Peter Cooney, Jane
Wardell & Shri Navaratnam)
BP (BP.)
