AGL shares rocket following guidance upgrade
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More news: AGL shares soared 12.5% by 11.30am AEDT on Thursday. The surge in early trading followed the release of the energy supplier's half-year results. AGL reported an upgrade of its full-year guidance due to a leap in profits during the six month period.
What they said: Commenting on the results, UBS Analyst Tom Allen said: "A strong beat with FY24 guidance narrowed to the upper end should see stronger trading following a period of weaker sentiment".
"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," he said.
"The additional disclosure on investments in renewable and firming capacity to 2030 provides clearer insight into how AGL will replace capacity from thermal assets expected to retire over the next 10 years"
AGL first-half profit growth jumps, upgrades guidance
The news: Energy giant AGL Energy has posted a four-fold increase in underlying net profit for the first half, citing higher wholesale electricity pricing as reason for the jump.
The numbers: AGL upgraded its full-year guidance for underlying net profit, which excludes one-off items, from $580 million-$780 million to $680 million-$780 million.
Underlying net profit in the first half jumped to $399 million from $87 million in the previous corresponding period.
Meanwhile, bottom-line net profit for the six month period grew to $576 million, up from a statutory loss of $1.075 billion a year earlier. Underlying EBITDA rose 78% to $1.07 billion.
The gas and electricity supplier announced a first-half dividend of 26 cents per share, compared to 8 cents in 1H23. It will be AGL's first payout under the company's revised dividend policy that aims to disburse 50%-75% of underlying profit after tax.
The context: AGL CEO and managing director Damien Nicks attributed the company's first-half performance to improved availability and flexibility of its fleet, more stable market conditions, and the impact of higher wholesale electricity pricing from prior periods being reflected in pricing outcomes and contact positions.
Despite overall lower customer demand, the improved results reflect significant challenges in the previous financial year, when AGL was impacted by forced plant outages and volatile conditions in the wider energy sector.
What they said: Nicks said: "We expect this positive momentum to continue into the second half of financial year 2024 and we are on track to deliver full-year earnings in line with our FY 2024 guidance range".
The source: ASX announcement
