infrastructure investment pays off

http://www.ciobinternational.org/en/news/904

Infrastructure investments pay off for Macquarie Bank

17 May 2006

As governments and local authorities in Europe, and notably in the United Kingdom, struggle to raise funds to finance expansion of their national infrastructure, Macquarie Bank announced to the Australian Stock Exchange yesterday that earnings from its investment operations in the United States, Europe and Asia had increased by two thirds, accounting for nearly 50 per cent of group revenue.

Much of this growth is built on rising commitment to infrastructure projects around the globe. As an example of the many successful projects funded by the bank, managing director and chief executive Allan Moss instanced construction of the 40 km electronically tolled Westlink M7 motorway for New South Wales, built by a consortium including the Macquarie Infrastructure Group MIG.

This, said Mr. Moss, was completed eight months ahead of schedule, reduces travel time for the average motorist by up to 30 minutes and avoids 48 sets of traffic lights.

By State Government estimates, he said, it is anticipated to contribute significant economic benefits to Sydney, has created 24,000 additional jobs in the region over three years and up to $A3 billion growth in economic output in over the same period.

Bank chairman David Clarke said that excluding the impact of new accounting standards, which are the Australian equivalent of international financial reporting standards, and last year’s one off $A91 million profit from the formation of the Macquarie Goodman Group MCQ, net profit after tax increased 33 per cent to $972 million.

“We are pleased”, he said, “to report another record result for our shareholders. Net profit has almost tripled in the last three years. This was a year of substantial growth, both internationally and in Australia. While overall income grew 17 per cent to $A4.4 billion, international income growth increased 59 per cent to $A2 billion. Risk weighted assets grew significantly, increasing 45 per cent to $A28.8 billion.”

On these figures Allan Moss commented: “There was strong growth across all regions and groups and the Bank is investing for the future. This year we reported our 14th consecutive year of record profit.”

Among major transactions completed during the year were Macquarie MEAG Prime real estate investment trust’s $S990 million listing on the Singapore Stock Exchange, the $S803 million offer by Macquarie International Infrastructure Fund also on SGX, and the KRW 1,026 billion offer and dual listing of Macquarie Korea Infrastructure Fund on the Korean Stock Exchange and the London Stock Exchange.

The Macquarie European Infrastructure Fund is reported as achieving its final close with investor commitments of €1.5 billion.

In Sydney analysts were expecting the Bank to raise further funds for overseas growth after learning that it had suspended trading in its shares on Monday because it is contemplating a capital-raising operation.

Macquarie is also reported to be involved in negotiations over the restructuring of Eurotunnel.