ASX 200 (XJO) up 0.5%, Macquarie (MQG) expects big profit hit

The ASX 200 (ASX: XJO) is currently up around 0.5% despite the US market falling on Friday.

Macquarie Group Ltd’s (ASX: MQG) profit hit

Macquarie gave investors a presentation today which included an update with its HY21 profit expectations.

The investment bank said that market conditions are likely to remain challenging, due to the significant and unprecedented uncertainty caused by the worldwide impact of COVID-19 and the uncertain speed of the global economic recovery.

Macquarie isn’t sure how these conditions will impact the business’ overall FY21 profitability, making forecasting extremely difficult for the full year.

However, Macquarie has had a go at estimating profit for the first half of FY21. It’s expecting profit to be down 35% compared to the first half of FY20 and down 25% on the second half of FY20.

Macquarie was also able to give an update about its operating segments in the first quarter of FY21.

The investment bank has ‘annuity style’ businesses called Macquarie Asset Management (MAM) with $568 billion of assets under management and banking & financial services (BFS) which includes Macquarie Bank. This half of the business has seen its combined profit contribution up compared to FY20 Q1 primarily due to the sale of the rail operating lease business in MAM, partially offset by lower profit in BFS which includes higher credit provisions due to COVID-19.

Macquarie also has its market-facing businesses which are called ‘commodities and global markets’ (CGM) and Macquarie Capital. This business saw its net profit contribution fall due to significantly lower investment-related profit in Macquarie Capital, though this was offset by stronger profit in CGM.

Monadelphous Group Limited (ASX: MND)

Engineering services company Monadelphous has announced a huge contract win from BHP Group Ltd (ASX: BHP).

Monadelphous announced it has secured construction and maintenance contracts in the resources sector with a combined valued of approximately $120 million.

Under the Western Australian Iron Ore (WAIO) asset panel framework agreement with BHP, there are two key contracts:

There is a contract to provide structural, mechanical and electrical upgrades at the Newman Hub site in Pilbara, WA. Work will commence immediately and it’s expected to be completed before the end of 2021.

The other contract is associated with the dewatering of surplus water at the Jimblebar mine site in Newman, WA.

In addition, Monadelphous is also going to provide multi-disciplinary construction services at the Olympic Dam copper mine in SA. Monadelphous has secured its first contract under the agreement for the supply and construction of acid storage tanks and connection to the existing operating acid plant.

Finally, the company announced it has been awarded a contract to undertake a major dragline shutdown for BHP Mitsubishi Alliance at its Saraji Mine near Dysart, QLD. The work will be completed by the end of December 2020.

FlexiGroup Limited (ASX: FXL)

Flexigroup announced that humm has launched into New Zealand today. It boasted that it’s the only BNPL product in the country to support transactions in store and online up to NZ$10,000.

Humm can provide larger spending power for customers in segments like solar, home furnishing, renovations, luxury retailing, fertility and healthcare.

Oxipay will be replaced by the humm brand. FlexiGroup will migrate its existing customer base and distribution network to humm.

New Zealand retailers joining the existing roster of 2,400 merchants include VIVO, Beaurepaires, The Cosmetic Clinic, MyBed and The Baby Factory.

Existing New Zealand retailers include names like Farmers, Pascoes Group, Freedom, JB Hi-Fi Limited (ASX: JBH) and PB Tech.

Other news

The team over at Rask Media have covered the rest of today’s news, so make sure you head over there for more ASX share market coverage.

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At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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