The market shrugged off an update from Macquarie Group about its operational performance so far in the current financial year which suggests the investment bank has seen an improvement in the June quarter, compared from the previous three month period.
The bank’s shares ended up 21 cents at $49.93.
Macquarie’s number two executive, Deputy Managing Director, Richard Sheppard said in a presentation that the bank’s securities, treasury and commodities and banking and financial services made good contributions while Macquarie Capital’s performance worsened compared with the fourth quarter of the previous year.
"Improved operational performance from all major businesses except Macquarie Capital compared to 4Q09,” Mr Sheppard said in London.
He said Macquarie Capital will be "significantly impacted by timing and size of transactions."
Macquarie repeated the profit forecast given at its annual general meeting in July of about midway between the first and second half profit figures of fiscal 2009.
That would be about $435.5 million, which would be a 28% decline from a year earlier.
"We continue to maintain a cautious stance with a conservative approach to funding and capital, notwithstanding some improvement in market conditions," Mr Sheppard said in presentation slides for an investment conference.
"Market conditions continue to be volatile, making short-term forecasting extremely difficult."
Macquarie said the profit forecast was subject to completion rate of transactions and asset prices.
One-off items had offset each other during the quarter to June.
"Swing factors include completion rate of transactions, asset realisations and asset prices.
"One off items include factors such as the internalisation of MAp management and the completion of the periodic review for potential impairment charges."
"A gain of approx $A180m on financing acquisition of MIPS and buyback of subordinated debt — unrealised loss of $A200m relating to fair value adjustments of issued fixed rate subordinated debt.
"As previously foreshadowed, high levels of cash continue to be a drag on current earnings," he said.
The company’s balance sheet profile as of June 30 was little changed from March 31 with cash and liquid assets making up 40% of assets, while over 50% of funding was from sources maturing beyond 12 months or equity.
The bank said assets under management declined slightly to $235 billion from the end of March.
However, the bank said assets under management would be boosted to $361 billion when the recent Delaware Investments acquisition in the US was included.
BHP Billiton said yesterday that the Shenzi field in the Gulf of Mexico in the US has started exceeding production expectations.
"The Shenzi field in the deepwater Gulf of Mexico, which began production on 23 March 2009, has now exceeded the facility nominal capacity of 100,000 barrels of oil per day," BHP Billiton said in a statement.
The facility has achieved sustained rates of 120,000 barrels of oil per day, the company said.
BHP shares rose 31 cents to $38 on a day that OPEC decided to keep oil output steady for another quarter, and America’s Energy Administration warned of a bigger than expected glut of oil in 2010.
BHP Billiton’s petroleum chief J Michael Yeager, said it in the statement that was an "excellent performance" from the company’s 44%-owned project.
"We have now been able to sustain rates significantly in excess of design capacity over the past two months," Mr Yeager said in a statement.
"The facility has also performed at over 95 per cent uptime during this period," he said.
He said the well rates were "exceptionally pleasing" as they came without the need to open two additional wells that were currently shut-in.
"We currently have 2 additional wells shut in and available for production when we need the additional well capacity.
"As these wells were some of the fastest wells ever drilled to this depth and involve gravel packs of over 250 feet of pay interval, we are extremely proud of our drilling organisation for the success" added Mr. Yeager.
“The Shenzi facility is located approximately 120 miles (195 kilometres) off the Louisiana coastline and is installed in approximately 4,300 feet (1,300 metres) of water on Green Canyon Block 653, making it the second deepest TLP in the world.
“The Shenzi field comprises four blocks: Green Canyon 609, 610, 653 and 654. Initial field development includes seven subsea wells tied back to the TLP, with full field development expected to expand to a total of 15 producing wells and future water injection wells.
“Crude oil is transported via a 20-inch diameter pipeline connecting to Ship Shoal 332 B, while natural gas will be exported via the Cleopatra pipeline (where BHP Billiton has a 22 percent equity share),” BHP said in the statement.
BHP Billiton is the operator with 44%. Joint interest participants are Hess Corporation of the US and Repsol of Spain, each with a 28% stake.
And last night BHP revealed a new iron ore contract.
This one is with Hyundai Steel of South Korea.
The two companies yesterday signed an eight year supply contract to deliver 22 million tonnes of iron ore from 2009.
At current market
