AGL Energy Limited has reported a statutory profit after tax of $325 million for the six months ended 31 December, compared to a $449 million loss the previous corresponding period, which was largely due to big write downs on the company's shale gas assets.
Underlying profit after tax was $389 million, up 4 per cent, and AGL puts the increase down to the strength of the wholesale electricity market and ongoing delivery of the company's cost reduction programs, which offset a decline in gas margins.
Underlying profit for the full year is expected to be in the upper half of the guidance range of $720-800 million.
"This outlook reflects the strength of AGL's business and our continued discipline in relation to cost and price management," says AGL managing director and CEO Andy Vesey (pictured).
Vesey expects the wholesale electricity prices will continue to rise.
"The forward curve points to sustained improvement, although the impact will continue to be phased over time due to competition, customer affordability considerations and the timing of rollover of our contracted positions," he says.
"Our guidance continues to take into account the headwinds in our gas portfolio that we have previously flagged, including: lower margins on the rollover of Queensland wholesale contracts; supply curtailment and disruption issues experienced in the first quarter; and the impacts of mild July/August weather."
Vesey, says the company's transformation, productivity and performance improvement initiatives are on track.
"We continue to work hard to reduce key areas of uncertainty and to address key long-term strategic imperatives in relation to prospering in a carbon-constrained world, building customer advocacy and driving growth," he says.
AGL will pay an interim dividend of $0.41 per share, 80 per cent franked, an increase of $0.09 on the previous interim dividend.
The company is trading up 2.78% early this afternoon at $23.64 per share.
Business News Australia
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