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AGL reports 11% increase in Underlying Profit


AGL Energy Limited (AGL) today reported a statutory loss after tax of $408 million for the financial year ended 30 June 2016 (FY16). This was $626 million less than the previous financial year, primarily reflecting significant items associated with the exit of gas exploration and production assets announced in February 2016 and with changes in the fair value of certain electricity derivatives. Statutory operating cash flow after tax was $1,186 million, up 13.6 percent. 

Underlying Profit was $701 million, up 11.3 percent. Underlying Profit is statutory profit after tax adjusted for significant items and changes in the fair value of certain electricity derivatives. 

AGL has declared a final dividend of 36.0 cents per share, an increase of two cents per share. This brings total dividends declared for FY16 to 68.0 cents per share, fully franked, an increase of four cents per share, or six percent. 

Result overview 

  • Revenue: $11,150 million, up 4.4 percent 
  • Statutory loss after tax: $408 million, down $626 million 
  • Statutory operating cash flow after tax: $1,186 million, up 13.6 percent 
  • Underlying Profit after tax: $701 million, up 11.3 percent 
  • Statutory earnings per share: (60.5) cents per share, down 93.8 cents per share 
  • Underlying earnings per share: 103.9 cents per share, up 7.5 cents per share 
  • Underlying operating cash flow: $1,588 million, up 4.0 percent 
  • Final dividend: 36.0 cents per share (100 percent franked) 

AGL Managing Director & CEO, Andy Vesey, said: “Our key generation assets, wholesale market operations and customer portfolios delivered a strong Underlying Profit result. This reflects our focus on operational execution and driving value through margin and cost discipline at the same time as we undertake the transformation of AGL. Today we have announced an indicative $300 million capital expenditure program over three years to drive the digital transformation of our customers’ experience. This is a key component of the delivery of our strategic framework to embrace transformation, drive productivity and unlock growth as the energy sector evolves.” 

Dividends 

The final dividend of 36.0 cents per share will be payable on 22 September 2016 with a record date of 25 August 2016. Shares will trade ex-dividend on 24 August 2016. 

AGL's dividend reinvestment plan (DRP) will operate with respect to the 2016 final dividend. AGL will buy shares on market to satisfy the DRP and will allot these shares at no discount to the arithmetic average of the daily volume-weighted average price at which AGL's shares trade during each of the 10 days commencing 29 August 2016. The last date at which shareholders can elect to participate in the DRP with respect to the 2016 final dividend is 26 August 2016.

Outlook 

AGL continues to expect to deliver earnings growth in FY17 noting: 

A challenging start to the year, reflecting unseasonably mild July weather on Australia’s east coast; 

The impact of a reduction in its gas portfolio margin of at least $100 million compared with FY16 (as stated on 7 July 2016); 

The benefit of stronger wholesale electricity prices will moderate over the medium term, reflecting the prevailing competitive environment, the timing of price changes and AGL’s hedging profile; and 

Ongoing enterprise bargaining agreements at AGL’s Loy Yang and Macquarie power stations.

AGL will provide formal guidance of its FY17 earnings outlook at its Annual General Meeting on 28 September 2016. 

Conference call 

AGL will hold a webcast and conference call to discuss the FY16 result at 10.30am Australian Eastern Standard Time today. A copy of the presentation AGL will use on this webcast is attached to this announcement. The webcast is accessible via www.agl.com.au or the following dial-in details:

Toll Free (Australia): 1 800 558 698 (quote “AGL”)
International: +61 2 9007 3187 (quote “AGL”)

Note on other disclosures 

AGL today issued its 2016 Sustainability Report. The report is available at www.agl.com.au/SustainabilityReport

As AGL is no longer classified by the ASX as an oil and gas entity, it will no longer provide an annual reserves statement.

Investor Presentation

About AGL

AGL is one of Australia’s leading integrated renewable energy companies and is taking action to gradually reduce its greenhouse gas emissions while providing secure and affordable energy to its customers. Drawing on over 175 years of experience, AGL serves its customers throughout eastern Australia with their energy requirements, including gas, electricity, solar PV and related products and services. 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, solar, landfill gas and biomass

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