Macquarie Group Ltd (ASX: MQG) shares could be energised by the investment bank's reported plans to invest in one of Australia's largest energy retailers.
The ASX financial share's exposure is across a wide array of different sectors and assets. Banking is a rapidly growing area for the company, but energy is another sector that Macquarie is looking to increase its exposure.
While a lot of its energy efforts have been focused on green energy, it is reportedly looking to increase its presence in a different way.
EnergyAustralia interest
According to reporting by the Australian Financial Review, Macquarie is one of the leading candidates to buy a stake of up to 50% in EnergyAustralia, which is Australia's third-largest electricity and gas stumping.
The owner of EnergyAustralia is CLP Group, which is listed in Hong Kong. It has been trying to find a partner that can assist with the investments into the energy transition away from coal, to low-carbon energy.
It's certainly not a done deal, with Macquarie only one of a number of other interested parties.
The AFR reported that, currently, Macquarie's main involvement in the domestic energy market is its investments in battery storage with Eku Energy as well as the hydrogen projects. On top of that, it aims to grow its presence in wind energy generation.
After asking EnergyAustralia, Macquarie and CLP for comment, none of them gave a comment to the AFR. However, last year in August, CLP chief executive Richard Lancaster said:
We are open to partnerships for parts of the business, for projects and even for the whole business.
We do see a need to invest in the energy infrastructure in Australia in order to go through an energy transition.
Is profitability about to jump?
It's an interesting time for energy retailers. EnergyAustralia is reportedly increasing energy prices significantly for both electricity and gas for customers following a large increase in energy prices last year.
Investors recently heard from AGL Energy Ltd (ASX: AGL) that said in FY24 it's expecting its underlying net profit after tax (NPAT) to go up at least two times to a range of between $580 million to $780 million.
AGL put that profit increase forecast down to a few factors, including "sustained periods of higher wholesale electricity pricing, reflected in pricing outcomes and reset through contract positions." It also mentioned the closure of the Liddell Power Station.
EnergyAustralia can benefit from the higher energy prices that it's going to charge customers, which could be one of the main reasons why Macquarie is interested in the business.
Time will tell whether Macquarie can share in the resurgent conditions for energy retailers.
