AGL Energy earnings results

CommSec CommSec

 

07 February 2019

Results ($m)

Half Year 2019

 Half Year 2018

Change

Revenue

6,337.0

6,450.0

-1.8%

Bloomberg Consensus 

6,406.0

 

 

Cost of sales 

(4,435)

(4,631)

-4.2%

Underlying EBITDA

1,157.0

1,084.0

+6.7%

Underlying Profit 

537.0

487.0

+10.3%

Statutory Profit After Tax 

290.0

616.0

-52.9%

Interim Dividend ($)

0.55

0.54

+1.9%

AGL Energy Limited (AGL) underlying result boosted by higher electricity prices

 

Results

  • Electricity and gas supplier AGL Energy (AGL) posted a 10.3% lift in half-year underlying profit to $537 million. Revenue eased by 1.8% to $6,337 million (a touch below Bloomberg consensus). While statutory profit more than halved, it isn’t as closely watched by analysts due to the impact of non-cash and one-off items which can skew the company’s performance. 

Drivers

  • The underlying result was boosted by higher electricity prices which helped offset the impact of strong competition in the industry. The number of customer accounts edged higher by just 20,000 over the half however are still down 12,000 over the year to 3,646,000.
  • AGL has increased spending on its coal-fired power stations, with a $25 million upgrade to the Loy Yang site in Victoria. The company said the investment is aimed at delivering “…increased, more efficient output without raising carbon emissions”. It has also commenced wind farm projects in NSW and QLD together with works to increase gas generating capacity in SA. 

Dividend

  • AGL will pay eligible investors a $0.55 per share (80% franked) interim dividend on 22 March. It will trade ex-dividend (the key date that determines dividend eligibility) on 20 February. AGL’s dividend yield is 5.4%. AGL has decided to not recommence share buy-backs due to policy uncertainty despite flagging the possibility of doing so in the FY18 results.

Outlook

  • The company’s profit goals have been largely kept unchanged. AGL Managing Director and CEO, Brett Redman said earnings are on track “towards the mid-point of our guidance range for underlying profit to be between $970m - $1,070m in the financial year ending 30 June 2019.” A number of risks remain including increased spending on its coal-fired power stations, an expected drop in gas sales and the cost of absorbing electricity price cuts while political uncertainty lurks in the background. With the Federal Election fast approaching, a push by politicians to control electricity prices is in focus. 

Share price

  • AGL shares fell in response to the result however are improving for the fourth month and remain near seven-month highs. 

Tags:

AGL

Start trading today with Australia's leading online broker

Join now >

Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 ("CommSec") is a wholly owned, but non-guaranteed, subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 ("the Bank") and both entities are incorporated in Australia with limited liability.
This information is directed and available to and for the benefit of Australian residents only and is not a recommendation or forecast.

This information has been prepared without taking account of the objectives, needs, financial and taxation situation of any particular individual. For this reason, any individual should, before acting on the information on this site, consider the appropriateness of the information, having regards to their own objectives, needs, financial and taxation situation, and, if necessary, seek appropriate independent financial, foreign exchange and taxation advice. CommSec, and its related bodies corporate, do not accept any liability for any loss or damage arising out of the use of all or any part of this information. We believe that this information is correct as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness.

 

Disclaimer

This site is directed and available to and for the benefit of Australian residents only. © Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 ("CommSec") is a wholly owned, but non guaranteed, subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and both entities are incorporated in Australia with limited liability.

By clicking on the "Download the CommSec App" buttons above, you will be directed to itunes.apple.com or play.google.com. These sites are not affiliated with CommSec and may offer a different Privacy Policy and level of security.

Top