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Highlights
- AGL's statutory net profit drops to $97 million, a decline of $479 million year-on-year.
- Underlying profit down 6.5% to $373 million, impacted by higher operating costs and customer product swapping.
- AGL lowers its interim dividend to 23 cents per share, down from 26 cents a year ago.
AGL Energy (ASX:AGL), one of Australia’s largest electricity providers, has reported a sharp decline in interim profit as consumers cut back on power usage amid cost-of-living pressures. The company’s statutory net profit fell to $97 million, marking a $479 million drop from the previous year.
Despite these challenges, AGL reported a significant first-half performance, driven by its flexible generation fleet and higher realized electricity prices, according to CEO Damien Nicks.
“The retail market has seen high volumes of customer product swapping in recent years due to price increases and broader cost-of-living pressures, which have also increased pressure on margins,” Nicks stated.
Financial and Operational Challenges
- Underlying profit dropped 6.5% to $373 million, mainly due to higher operating costs and increased consumer switching between energy plans.
- Coal fuel costs rose 7.4%, primarily due to increased output at the Bayswater Power Station in New South Wales.
- Gas costs surged by 42.6%, as the market operator directed the Torrens Island plant to support South Australia’s power grid.
- AGL set aside $235 million in provisions for renewable power purchase agreements, citing lower forward prices for large-scale generation.
Outlook and Dividend Reduction
Looking ahead, AGL expects earnings to moderate in the second half of the financial year. The company narrowed its full-year underlying EBITDA forecast to a range of $1.935 billion to $2.35 billion, while underlying net profit is projected between $580 million and $710 million.
Shareholders will see a reduced interim dividend of 23 cents per share, down from 26 cents a year earlier.
