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The utilities sector includes companies which are into electricity, natural gas, sewage, and other services. Like any other sector, the utilities sector has also been affected by the coronavirus pandemic, resources scarcity, and other climate conditions. In the past one year, the sub-index that represents the utilities sector, ASX:AXUJ, has given a negative return of ~11%, hitting the lowest at 5,807.90 during intraday trading on 4th of March, 2021. Since then, the sub-index has gained momentum and is currently trading at 6,179.50 on 19 March 2021 (12:01:44 AEDT).
Today, we will talk about three large-cap utility stocks, which are fundamentally strong and have shown resilience during the coronavirus pandemic.
AusNet Services (ASX:AST)
AusNet Services Ltd is an Australian energy company, listed on both the Australian Securities Exchange and the Singapore Exchange.
Financial Highlights (1H FY2021)
- The company announced a dividend of 4.75cps at the upper end of FY2021 dividend guidance range 9.0 - 9.5cps.
- Despite having a COVID-19 impact on its people, work practices and customers and with no govt benefits, AusNet reported a positive financial result in H1 FY2021.
In A$ millions except per share data
Source: Copyright © 2021 Kalkine Media Pty Ltd, Data Source: AST ASX update, dated 11 Nov 2020
The company recently issued a 60-year EUR hybrid security in the form of non-convertible subordinated notes for EUR 700M at a fixed rate of 1.625%.
- Reshape business through an organisation-wide transformation program.
- To regulate asset base growth forecast at around 2-2.5%.
- To hold contracted energy infrastructure assets worth A$1.5 billion by FY24.
Shares of AusNet closed at A$1.810, up 2.259% on ASX on Friday, 19 March 2021.
Spark Infrastructure (ASX:SKI)
Sydney-headquartered investment fund Spark Infrastructure Group owns a portfolio of electricity infrastructure assets. The fund serves more than 5 million homes and businesses.
Image Source © Zalakdagli I Megapixl.com
1H FY2020 Financial Highlights
- Spark has a 1.6% increase in proportional EBITDA to A$870.3 million as compared to the last year’s 1H FY2020.
- It recorded a 1% growth in its total revenue. The company’s PBIT grew to A$159.8 million from $139.3 million in 1H FY2020.
- The company’s PAT was A$105 million in 1H FY2021, which was A$79.1 million during 1H FY2020.
- It had a closing cash balance of A$36.9 million as on December 31, 2020, and FY20 dividend distribution of 13.5 cents.
Shares of Spark closed at A$2.140 on ASX, up 0.943% on ASX on Friday, 19 March 2021.
AGL Energy Limited (ASX:AGL)
AGL, a company which generates and retails electricity and gas for both residential and commercial use, was founded in 2006. Despite having a negative EPS, the company announced a dividend of 8.46%.
For 1H FY21, the company’s financials are as follow:
- It reported a statutory net loss after tax of A$2,287 million, down 808% from the last financial year’s first half.
- The company had a fall in cash (operating activities) of 46%.
- AGL's underlying EBITDA and net loss after tax were A$926 million and A$317 million, down 13% and 27%, respectively.
Dividends were also down by 13%, which was reported 31 cents in the last half-yearly period.
Last week, AGL signed a deal between Powering Australian Renewables and Mercury NZ for acquisition of Tilt Renewables Ltd for NS$7.80 per share or NZ$2.9 billion.
Most recently, the company entered into an agreement to buy Epho and Solgen Group, the country's largest commercial solar businesses. Post this acquisition, AGL will become the largest commercial solar provider in Australia.
Despite the COVID-19 impact, it added other companies Southern Phone, Perth Energy and Click Energy, in its acquisition portfolio in H1 FY21.
Second half of FY21 outlook
- The company plans to focus on organic growth to provide better services to its customers.
- Unlock new product growth from AGL-branded mobile and broadband.
- Continue to improve digitalisation.
Shares of AGL closed A$9.650 each, up 2.224% on ASX on Friday, 19 March 2021.