Australia's AGL Energy shares surge after four-fold jump in profit
Feb 8 (Reuters) - Australia's top power producer AGL Energy upgraded its annual profit forecast on Thursday, after reporting a surprise quadrupling in its half-year earnings on the back of higher prices.
Its shares soared as much as 15% after the announcement.
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The upbeat results come after AGL, which sells retail power to one-sixth of Australians, emerged from a string of prolonged plant outages and volatile energy markets in the corresponding period a year earlier.
"We expect this positive momentum to continue into the second half of FY24 and we are on track to deliver full-year earnings in line with our FY24 guidance range," CEO Damien Nicks said in a statement.
AGL now expects its underlying profit to be between A$680 million ($443 million) and A$780 million for FY24, in the upper half of its previously flagged range and above analysts' forecasts.
For the six months ended December 2023, its underlying net profit after tax was A$399 million, up from A$87 million a year earlier. The result was 28% above the Visible Alpha consensus estimate of A$311 million cited by Jefferies.
UBS analysts called it a "strong beat".
"Investors will note that despite moderating pricing in recent months following a period of mild weather/lower than expected grid demand, AGL's longer-duration contract portfolio provides some insulation from these factors," UBS said in a note following the results.
The company declared an interim dividend of 26 Australian cents per share, more than triple last year's payout.
AGL, the country's biggest carbon emitter, said in its earnings presentation that the company was on track to deliver on its strategy to add 12 gigawatts (GW) of firming and renewable capacity by 2036.
It expects to fund about 5.5 GW of that on its balance sheet, with the rest to be obtained from other sources, including joint ventures and purchases from other power producers, Nicks said.
($1 = 1.5340 Australian dollars)
(Reporting by Archishma Iyer, Poonam Behura and Shivangi Lahiri in Bengaluru; Editing by Shilpi Majumdar and Sonali Paul)