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REPORTING SEASON: AGL Energy Ltd (AGK)

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Figure 1: AGL Energy Ltd 12 month chart

 

AGL Energy’s profit cools following warm weather

·         AGL Energy (AGK), Australia’s largest retail energy provider met the market’s expectations with a 3.9% fall in Underlying Net Profit After Tax (NPAT) to $562M. A warm start to winter held back demand for gas in both VIC and NSW, resulting in a profit outcome right at the bottom end of AGK’s profit guidance

·         The 52% surge in its Statutory Profit was driven by a fall in one-off significant items like the $284M write-down of its NSW Upstream assets in FY13

·         AGK entered a trading halt at the company’s request following the launch of a $1.2B capital raising to help pay for the purchase of Macquarie Generation’s (MacGen) power generation assets costing $1.5B

·         A fully franked $0.33 per share final dividend was declared, payable to eligible investors on 30 September 2014. AGK has a 4.29% dividend yield and a market cap of $8.2B

·         As was previously advised, AGK expects the repeal of the carbon tax to cut earnings (EBIT) by $186M for FY15 while the closure of its Kurnell LPG extraction plant could wipe out ~$14M. The energy provider expects these costs to be largely offset by strong growth in other parts of its business. As is traditionally the case, AGK will provide more formal guidance for its FY15 result at its AGM on 23 October

·         AGK has had a sluggish few years, with its shares down 2.3% since 1 January 2014, following a 2.28% fall in 2013

 

You can see all of CommSec’s reporting season analysis by clicking here.

Steven Daghlian, Market Analyst,