AGL Energy (AGL) SNAPSHOT
Profile: AGL Energy (AGL) operates Australia’s largest electricity generation portfolio and has assets across solar, wind, thermal and hydro. AGL sells gas and electricity to retail, business and wholesale customers. The company also operates electricity and gas storage facilities. AGL’s generation assets include the Loy Yang power station in Victoria and Bayswater Power station in NSW.
History: The Australian Gas Light Company was established in 1837. AGL lit the first Australian street lamp, in Sydney, in 1841. In 1871, AGL listed on the Sydney Stock Exchange. In 2006, Australian Gas Light Company merged with Alinta Ltd to form two new entities: Alinta Ltd (‘new Alinta’), holding the two companies’ infrastructure and asset management businesses; and AGL Energy Ltd, holding AGL’s energy business and roughly a third of Alinta’s West Australian Retail and cogeneration business. In August 2019, AGL acquired Perth Energy for c.$93m
Earnings composition: The Electricity portfolio generated $1,989m, or 73%, of FY19 underlying profit after tax. The gas portfolio generated $719m (27%) of underlying profit. Other AGL reported a loss of $1,668m.
Most recent result – FY19: Underlying profit after tax was up 2% on the prior corresponding period (pcp) to $1,040m. Statutory profit after tax was $905m, down 43% on the pcp. The lower statutory profit was driven by higher forward prices (the price the market considers that should be paid today in order to receive a specified amount of electricity at some time in the future). The movement in forward prices impacted the value of financial instruments, such as hedging contracts (discussed further on page two), held by AGL. Underlying EBITDA increased 2% on the pcp to $2.3bn. Underlying earnings per share increased 2% on the pcp to 159 cents. A dividend of 64 cents was declared, bringing total dividends for the year to 119 cents, up from 117 cents in FY18.
Company outlook: AGL forecasts underlying profit after tax to fall to between $780m and $860m in FY20, having been impacted by the Loy Yang Unit 2 outage, higher depreciation costs, headwinds from lower electricity prices, fuel costs and default offers in the electricity markets.
Important dates: 1H20 results are scheduled for 13 February 2020. Ex-dividend date is 26 February 2020. Payment date is 27 March 2020. Full-year results are scheduled for 13 August 2020. 2H dividend is scheduled for 26 August and payment is scheduled for 25 September 2020.
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