AGL Energy Ltd (AGL) - Half Year Results 2018

CommSec CommSec

08 February 2018

RESULTS

Half Year 2018

Half Year 2017

CHANGE

Revenue ($m)

6,450

6,030

+7%

Revenue consensus ($m)

6,554

 

 

Cost of Sales ($m)

4,628

4,211

+9.9%

Underlying EBITDA ($m)

819

685

+19.5%

Statutory Profit After Tax ($m)

622

325

+91.4%

NPAT consensus ($m)

620

 

 

Interim Dividend ($)

0.54

0.41

+32%

AGL Energy Limited (AGL) solid result on higher gas and electricity margins.
 
  • AGL Energy Limited (AGL) recorded a 26.7% lift in underlying profit after tax, supported by increases in gas and electricity wholesale margins offsetting higher operating costs. One of the costs being higher depreciation due to shortened life and closure of Liddell Power Station in 2022. 
  • AGL continued to beat the market in customer retention, as the company lifts its acquisition and retention of customers by 29%, increasing the number to a total of 3.7 million customers.
  • Overall, solid 7% revenue growth to $6,450 million helped support a 13% lift in gross margin to $1,845 million. In December, AGL announced it had changed the company’s operating segments. It’s newly formed wholesale markets division revenue lifted by $488 million. This was supported by the unit price of electricity generated and sold into the National Electricity Market pool and the company’s hedging of its portfolio. AGL’s customer segment reported a $155 million revenue increase, reflecting higher electricity prices and business customer mix. Higher margin rates helped drive the revenue lift despite the total number of business customers falling. 
  • AGL’s Group Operations costs increased over the term resulting in a $223 million loss. This was associated with asset divestments that occurred in the prior corresponding period and higher depreciation at AGL Macquarie from increased capital expenditure. AGL Macquarie produces approximately 12% of the electricity needed by consumers in eastern Australia at present. 
  • AGL reiterated the 2018 guidance saying “subject to normal trading conditions and to any adverse impacts arising from policy and regulatory uncertainty, AGL continues to expect Underlying Profit after tax in the financial year ending 30 June 2018 to be $940-1,040 million”. At present the market consensus for FY18 is $1,010 million. 
  • AGL will pay an 80% franked interim dividend of $0.54 per share on 26 March 2018.

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