Macquarie posts 43% drop in profit as asset values fall

Tuesday 18th November 2008

Macquarie Group, Australia's biggest securities firm, reported a 43% decline in first-half profit after taking write-downs and charges amounting to A$1.14 billion to account for slumping asset values.

Profit fell to A$604 million in the six months ended Sept. 30, from A$1.06 billion a year earlier, Macquarie said in a statement today. Chief executive Nicholas Moore said earnings will probably stay at that level in the second half of the year as the group took further writedowns of its funds.

The earnings outlook puts Macquarie on track fro its first annual decline in profit since 1992. Moore said the underlying performance of the company is more robust than the headline results suggest and its balance sheet is strong.

"While the extreme market conditions have led to a number of writedowns and one-off costs in the latest half year, the underlying performance of the Macquarie business has been solid," he said.

Shares of Macquarie surged 11% to A$22.96, trimming their slide in the past 12 months to 72%. The firm didn't have the same exposure to the US sub-prime market collapse as its major US and European rivals though it has been hurt by slumping equity markets.

By Jonathan Underhill

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