AGL reports 24 percent Underlying Profit growth

AGL Energy Limited (AGL) today reported a statutory loss after tax of $449 million for the six months ended 31 December 2015. This was $757 million below the prior corresponding period, including changes in the fair value of certain electricity derivatives of $168 million and $656 million after tax of significant items associated with the exit of gas exploration and production assets, and restructuring costs.

AGL’s Underlying Profit of $375 million was up 24.2 percent on the prior corresponding period. Underlying Profit1 is the statutory profit after tax adjusted for significant items and changes in the fair value of certain electricity derivatives.

AGL advises that FY16 Underlying Profit is expected to be within the upper half of the guidance range of $650 to $720 million, subject to normal trading conditions for the remainder of the year.

AGL has declared an interim dividend of 32.0 cents per share fully franked, up two cents per share on the prior corresponding period.

Result Overview

  • Revenue $5,601 million, up 8.1%
  • Statutory Loss $449 million, down $757 million
  • Underlying Profit1 $375 million, up 24.2%
  • Statutory EPS (66.5) cents per share, down 115.1 cents per share
  • Underlying EPS 55.6 cents per share, up 16.6%
  • Underlying Operating cash flow before interest & tax $866 million, down $13 million
  • FY16 interim dividend of 32.0 cents per share (100% franked), up 2 cents per share

Commenting on the interim results, AGL Managing Director, Andy Vesey, said: “The strong performance of our core businesses highlights that we are well positioned to capitalise on the evolution occurring in the energy sector.

“Part of that evolution is supporting Australia’s transition to a lower carbon generation portfolio and our launch today of the Powering Australian Renewables Fund demonstrates AGL’s commitment.

“In addition, the equity investment that we’ve made in Sunverge is just one of a number of steps taken to enhance our digital capabilities so that we can meet customers’ rapidly changing needs and expectations,” said Mr Vesey.

Dividend 

AGL has declared a fully franked interim dividend of 32.0 cents per share.

The interim dividend will be paid on 16 March 2016. Shares will commence trading ex-dividend on 23 February 2016. The record date to determine shareholders’ entitlements to the interim dividend is 25 February 2016.

The AGL Dividend Reinvestment Plan (DRP) will operate in respect of the dividend. Shares will be bought on-market and allotted at no discount to 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 29 February 2016.

The last date for shareholders to elect to participate in the DRP for the FY16 interim dividend is 26 February 2016.

Exit of gas exploration and production 

On 4 February 2016, AGL announced that the company had taken a strategic decision to exit the exploration and production of natural gas assets. AGL recognised an impairment charge of $640 million after tax ($795 million pre-tax) against the carrying value of its gas exploration and production assets including an increase in rehabilitation provisions.

Powering Australian Renewables Fund 

Powering Australian Renewables Fund launched today, AGL will lead an innovative renewable investment funding vehicle to develop new large-scale renewable generation projects. AGL proposes to seed the new fund with its solar projects at Nyngan and Broken Hill (155 MW) as well as taking a cornerstone equity stake. The new vehicle is expected to develop over 1,000 MW of renewable generation at a cost of between $2 to $3 billion.

Outlook 

AGL expects FY16 Underlying Profit to be within the upper half of the guidance range of $650 million to $720 million, subject to normal trading conditions for the remainder of the year.

AGL maximised opportunities in the first half which are not anticipated to continue at the same rate in the second half. The second half of FY15 also included the benefit of colder than normal winter volumes.

Presentation

Attached Presentation. 

Conference call

A webcast and conference call will be held today to discuss AGL’s 2016 interim profit result.

Webcast via: www.agl.com.au at  10.30am (AEDT)

Dial In numbers:

  • Toll Free Australia:1800 558 698 (quote “AGL”)
  • International Dial In: +61 2 9007 3187 (quote “AGL”)

1Underlying Profit has been presented with reference to the Australian Securities and Investment Commission Regulatory Guide 230 “Disclosing non-IFRS financial information”. AGL’s policy for reporting Underlying Profit is consistent with RG230. The Directors have had the consistency of the application of the policy reviewed by Deloitte.

About AGL
AGL is one of Australia’s leading integrated energy companies. It is taking action to responsibly 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 meeting 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.