“We are acutely aware of the cost of living pressures both our customers and the broader community is under,” chief executive Damien Nicks said on Thursday.
“We operate in a highly regulated environment and one of the most competitive markets around.”
Former anti-monopoly tsar Professor Allan Fels on Wednesday released research that alleged Australia’s biggest energy companies, airlines and supermarkets were price gouging consumers and generating extortionate profits.
“We have a large retail footprint but we compete with the likes of Origin Energy, Alinta. We are in a very, very competitive market,” Nicks said.
AGL announced on Thursday a half-year net profit of $576 million compared with a loss of $1.075 billion a year ago amid an energy shock and the impending closure of the coal-fired Liddell Power Station in NSW.
Shares in AGL surged 13 per cent or $1.04 to $9.02 in morning trade as shareholders welcomed the solid results and interim dividend of 26 cents per share – more than triple a year earlier.
Underlying earnings before interest, tax, depreciation and amortisation rose to $1.07 billion in the half, up 78 per cent.
Revenue fell 20.8 per cent to $6.18 billion in the six months to December 31, but the underlying profit of $399 million was sharply higher than $87 million a year earlier.
The increase was driven by fewer plant outages and more stable market conditions, offset by being caught on the wrong side of contracts as wholesale prices fell.
In line with a strong first-half, AGL pushed its FY24 guidance for underlying profit to the top of the guidance range at $680 million to $780 million.
Nicks said the strong operational and financial performance provided “headroom” for investment in the future business and energy transition.
A $70 million support program targets people in hardship because it is important to keep them connected, he said, committing to ongoing support for financially stressed customers.
“We’ve had a very strong six months, we’ve doubled the (development) pipeline and we are investing in the future of the energy transition,” he said.
AGL was responding to market pressure to exit coal-fired power generation over the next 12 years, Nicks said.
In the meantime, coal-fired power plants can “flex” in the middle of the day when solar energy is dominant and prices are low.
Chief financial officer Gary Brown said it was too early to comment on the price outlook for FY25.
He said AGL was well-placed to deploy $3 billion to $4 billion by 2030 towards the transition of its energy generation portfolio, supported by strong cash flow and a larger and more diversified pool of capital.
AGL said wholesale energy prices were lower across all states after government coal and price cap schemes introduced in 2022 and increased availability of generation units.
Wholesale prices were also affected by seasonal mild weather, a lack of volatility and increasingly higher penetration of solar in the national electricity market.
AGL’s total fuel costs for gas and coal generation fell 28.6 per cent in the first six months of FY24.
– AAP
