AGL Energy Limited (AGL) is scheduled to release its half year financial results to the Australian Securities Exchange on Wednesday, 11 February 2015. Included will be a reclassification of the reporting of Distribution Use of System (DUOS) costs in South Australia and Queensland. This will result in the grossing up of revenue and cost of sales in the Retail and Business Customers segments for both States.
There is no change to historical gross margin, earnings before interest and tax (EBIT), Underlying Profit1 or Statutory Profit.
Upon the privatisation of electricity network and retail assets in South Australia and Queensland, AGL entered into agreements in these States which resulted in the establishment of a triangular relationship between the distributor/network, the retailer and the customer. Under AASB 118, AGL adopted the agency basis of accounting, with DUOS costs netted against associated revenue.
This triangular relationship does not exist in Victoria and New South Wales. Revenue and DUOS costs in relation to these States have been reported on a gross basis under AASB 118.
To present a consistent reporting approach, AGL will now account for revenue and DUOS costs on a gross basis in all regions.
For the half year ended 31 December 2013, revenue and cost of sales as previously reported will increase by $319 million. FY14 full year revenue and cost of sales will increase by $666 million. There is no change to gross margin or EBIT for either the half year or full year.
For the half year ended 31 December 2013, revenue and cost of sales will increase by $126 million. FY14 full year revenue and cost of sales will increase by $229 million. There is no change to gross margin or EBIT for either the half year or full year.
Refer to Appendix 1 in the attached release for additional information about the changes.
1Underlying Profit is the Statutory Profit adjusted for significant items and changes in the fair value of financial instruments.
AGL is one of Australia's leading integrated energy companies and largest ASX listed owner, operator and developer of renewable energy generation in the country. Drawing on over 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 taking action toward creating a sustainable energy future for our investors, communities and customers.