Australian AGL Energy 1H Profit Up 4%

Australian AGL Energy has reported a 4% rise in underlying profit to A$389mn (US$296mn) for the six months that ended December 31, 2016 on the back of strength in the wholesale electricity market and cost reduction programs, offsetting a decline in gas margins.

The company February 9 said it now expects underlying profit for the full year to be within the upper half of its guidance range of A$720mn to A$800mn.

AGL's Newcastle gas storage facility (Credit: AGL Energy)

“In our electricity portfolio, the impact of rising wholesale prices is expected to continue. The forward curve points to sustained improvement, although the impact will continue to be phased over time due to competition, customer affordability considerations and the timing of rollover of our contracted positions,” AGL MD & CEO, Andy Vesey, said. “Our guidance continues to take into account the headwinds in our gas portfolio that we have previously flagged, including: lower margins on the rollover of Queensland wholesale contracts; supply curtailment and disruption issues experienced in the first quarter; and the impacts of mild July/August weather.”

AGL has also declared an interim dividend of 41 cents per share, 80 percent franked, an increase of 9 cents per share on the previous interim dividend. 

Shardul Sharma