AGL shares climb after 'big beat' to HY earnings estimates
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More news: AGL shares advanced after fluctuating in early trading, as the energy company's underlying profit beat market expectations for the six months to December.
AGL shares were up 1.92% to $11.94 by 11:15am AEDT, having shed nearly 0.7% earlier in the session.
UBS analysts called it a "strong result", with AGL booking underlying NPAT of $373 million, 21% ahead of consensus estimates, driven by stronger electricity retail pricing and higher pool revenue from the group's generation portfolio.
What they said: "A big beat to 1H underlying earnings expectations, however only a narrowing of FY25 guidance and weaker operating [free cash flow] moderates the impact of the beat," the analysts said.
"Anticipate a positive reaction today with investors likely noting the positive outlook commentary into FY26-27 well."
AGL Energy narrows guidance after first-half profit slide
The news: Power producer and retailer AGL Energy has posted an 83% drop in first-half profit on the back of provisions and transformation costs and trimmed its interim dividend.
The numbers: Statutory profit for the six months to December fell to $97 million from $576 million a year ago. Underlying profit was also down 7% to $373 million despite a 15.3% increase in revenue to $7.1 billion.
AGL will pay an interim dividend of 23 cents a share, down from 26 cents a share a year ago.
The context: AGL, Australia's largest electricity generator, recorded $245 million of one-off significant items in the half year. This included $165 million in onerous contract provisions, $45 million for retail transformations costs and $31 million on account of negative movement in financial instruments.
Managing director Damien Nicks said price increases and broader cost of living pressures are resulting in high volumes of customer product swapping, leading to heightened market competition.
The company expects earnings to moderate in the second half due to ongoing customer competition, weather seasonality and higher depreciation and finance costs.
As a result, it has narrowed full-year guidance for underlying earnings to $1.935 billion to $2.135 billion, from $1.87 billion to $2.17 billion previously. Underlying profit is now expected to be between $580 million and $710 million, from the previous estimate of $530 million and $730 million.
The sources: ASX announcement, UBS research
