The Australian banking group that controls Southern Water, the utility company criticised for discharging sewage into the sea, has posted record profits after a boom in its commodities trading division.
Macquarie, which owns a string of UK infrastructure assets, recorded an annual net profit of A$5.18bn (£2.8bn), up 10% on the previous year. The profits outstripped analysts’ expectations of A$4.96bn for the 12 months to 31 March 2023.
A rise in profits in its commodities business – which trades oil, gas and electricity, largely in North America – handed its top commodity trader, Nick O’Kane, A$58m through a profit-share agreement, up from A$36m the year before.
The payout meant O’Kane earned far more than the group’s chief executive, Shemara Wikramanayake, who still landed A$33m – itself a payout putting her ahead of some of Wall Street’s best-paid bankers.
Macquarie owns a diverse collection of assets, including retail and investment banking activities, and is one of the world’s largest infrastructure owners.
In the UK its interests include Southern Water, the gas network Cadent, Southampton and Glasgow airports, and several windfarm projects along the east and north-west coasts of England.
Southern Water, which handles water supplies across the south-east of England, has been among the companies criticised for regularly discharging raw sewage into the sea. Campaigners accused it of “environmental vandalism” last year when data showed that Southern discharged raw sewage for more than 3,700 hours at 83 bathing water beaches during the first eight days of November alone.
Macquarie also faced political scrutiny during its ownership of Thames Water between 2006 and 2017 as it extracted billions in dividends while Thames’s debt soared. It controversially returned to the industry when taking control of Southern Water in 2021.
The group said the value of its assets under management had increased by 10% since the end of March 2022 to A$870.8bn. The group said 71% of its profits had come from outside Australia during the year, with 51% of its overall profit derived from its commodities business.
The oil and gas companies BP and Shell this week reported healthy profits, helped in part by improvements in their trading divisions that have benefited from volatile energy markets.
Wikramanayake said: “Against a less certain market and economic backdrop, the diversity of Macquarie’s activities and the expertise of our teams ensured we maintained strong performance during the year.”