Shares in AGL have slumped after the energy giant announced a $25 million upgrade to Victoria’s Loy Yang coal-fired power station and renewed calls for more certainty from Canberra on future energy policy.
AGL, which reported a 10 per cent lift in underlying profit to $537 million for the six months to December 31, said on Thursday the upgrade would boost Loy Yang’s output and efficiency without raising carbon emissions.
But at the same time, the power generator and provider has secured an option over a 250 megawatt pumped hydro energy storage project at Bells Mountain near Muswellbrook in NSW.
AGL shares were trading 3.34 per cent lower at $21.42 at 1230 AEDT.
In a media call, managing director and chief executive Brett Redman said the scrapped National Energy Guarantee and fractured debate around proposed federal legislation had delayed progress on the new 252 megawatt gas-fired power station at Newcastle.
But he also moved to assure investors AGL had a good relationship with both government and the opposition.
“Interestingly enough we had a senior member of the shadow cabinet visiting us yesterday,” Mr Redman said on Thursday.
“I would describe (the relationship with Labor) as good… I would say the same as government too. I think there is a good two-way flow of information and an ability to work with both sides of the house.”
AGL’s first-half revenue fell 1.3 per cent to $6.43 billion on falling sales across the customer and wholesale markets, as well as non-recurrence of revenue from its recently divested solar installation unit.
The company also noted consumers had been switching to lower-priced products.
Net profit after tax dropped 53 per cent to $290 million due to a reduction in value of the company’s financial assets.
But underlying net profit rose 10.3 per cent to $537 million, and was tracking at the mid-point of its guidance range.
The loss on fair value of financial instruments of $251 million – compared with a $127 million gain in the prior corresponding period – was a reflection of higher future electricity prices and lower oil and coal prices.
The company will pay an interim dividend of 55 cents, 80 per cent franked, up from 44 cents the same time last year.
AGL shares were valued at $22.16 before the start of trade Thursday, up from a near two-year low of $17.58 in October, but still down on an all-time peak of $28.44 in April 2017.
AGL LIFTS UNDERLYING HY PROFIT
* Net profit after tax down 53pct to $290m
* Underlying net profit up 10.3pct to $537m
* Revenue down 1.3pct to $6.43bn
* Interim dividend of 55 cents, 80pct franked, up 11 cents