AGL reports lower underlying earnings but stronger cash flow after record warm winter.
AGL Energy Limited (AGL) today reported a statutory net profit after tax of $261 million for the six months ended 31 December 2013. The statutory result included changes in the fair value of certain energy derivatives and the inclusion of $17 million of significant items associated with the acquisition of Australian Power and Gas Company Limited (APG), which was completed on 25 October 2013.
AGL’s Underlying Profit of $242 million was down 11.4% on the prior corresponding period. Underlying Profit1 is the statutory net profit after tax adjusted for significant items and changes in the fair value of certain energy derivatives.
Underlying Operating Cash Flow before interest and tax was up strongly to $963 million, a 49% increase on the prior corresponding period.
AGL reaffirmed guidance for 2014 Underlying Profit of $560 million to $610 million, subject to normal trading conditions.
AGL has declared an interim dividend of 30.0 cents per share, fully franked.
- Revenue $4,842 million, down 2.6%
- Statutory NPAT $261 million, down 27.1%
- Underlying Profit $242 million, down 11.4%
- Statutory EPS 46.9 cents per share, down 28.2%
- Underlying EPS 43.5 cents per share, down 12.7%
- Underlying Operating cash flow before interest & tax $963 million, up $318 million
- 2014 interim dividend of 30.0 cents per share (100% franked), unchanged
Commenting on the interim results, AGL Managing Director, Michael Fraser, said:
“This is a solid result in a difficult operating environment, with record warm weather conditions during the winter months and a further drop in customer demand for energy.
“We added to our customer base with the successful acquisition of APG and we continued to make big improvements in our customer service which was recognised with AGL being named Australia’s favourite Utilities Brand by Canstar Blue. Looking forward, we’ll see a big step up in our gas sales in Queensland next year and we should see the benefits of reduced customer churn and discounting begin to flow.”
Macquarie Generation (MacGen) acquisition: AGL announced on 12 February 2014 that it had signed a contract with the New South Wales Government to purchase the MacGen assets for $1,505 million, subject to Australian Competition and Consumer Commission (ACCC) approval.
If approved, the transaction is expected to be completed in mid-April 2014. Funding of the acquisition is expected to be by way of a renounceable rights issue to existing shareholders to raise approximately $1.2 billion and $350 million of bank debt.
AGL has provided the ACCC with a draft undertaking to provide up to 500 MW of generation capacity to competitors in the NSW market for up to five years after acquisition.
The ACCC is expected to make its decision on 4 March 2014.
Dividends: AGL has declared a fully franked interim dividend of 30.0 cents per share.
The interim dividend will be paid on 4 April 2014. The record date to determine shareholders’ entitlements to the interim dividend is 7 March 2014. Shares will commence trading ex-dividend on 3 March 2014.
The AGL Dividend Reinvestment Plan will operate in respect of the dividend. Shares will be allotted at the simple average of the daily weighted average market price at which AGL’s ordinary shares are traded on the ASX during each of the 10 trading days commencing on 11 March 2014. In view of the uncertainty about the acquisition of MacGen, and the potential for an overlap between the periods for determining the issue price of shares under the DRP and the exercise price in respect of a rights entitlement offer, the Directors have determined that no discount will apply in respect of the issue price of shares under the DRP.
Outlook: As was also the case last year, AGL expects an improved financial performance in the second half of the financial year which will include a full six months contribution from APG.
AGL reaffirmed Underlying Profit guidance of $560 million to $610 million for the 12 months ending 30 June 2014, subject to normal trading conditions. The successful acquisition of MacGen is not expected to alter guidance.
Conference call: A webcast and conference call will be held today to discuss AGL’s 2014 interim profit result.
A copy of the investor presentation is attached below.
eWebcast via: www.aglinvestor.com
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Toll Free Australia:1800 801 825 (quote "AGL")
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For more information see the following documents:
1. Underlying Profit has been presented with reference to the Australian Securities and Investment Commission Regulatory Guide 230 “Disclosing non-IFRS financial information” issued in December 2011. AGL’s policy for reporting Underlying Profit is consistent with this guidance. The Directors have had the consistency of the application of the policy reviewed by AGL’s external auditors.
AGL is one of Australia's leading integrated renewable energy companies and is taking action toward creating a sustainable energy future for our investors, communities and customers. Drawing on 175 years of experience, AGL operates retail and merchant energy businesses, power generation assets and an upstream gas portfolio. AGL has one of Australia's largest retail energy and dual fuel customer bases. AGL has a diverse power generation portfolio including base, peaking and intermediate generation plants, spread across traditional thermal generation as well as renewable sources including hydro, wind, landfill gas and biomass. AGL is Australia's largest private owner and operator of renewable energy assets and is looking to further expand this position by exploring a suite of low emission and renewable energy generation development opportunities.