The strikes have hurt them, there seems to be a lot of gloss on these results not borne out by the data IMHO: Vesey has flagged some issues in the gas space that r not exactly encouraging. Offshore investors will look to Centrica, National Grid, Suncor, SSE and Contact Energy as this is not exactly awe inspiring. www.smh.com.au/business/energy/rising-power-prices-fattens-agls-earnings-20170208-gu7zku.html
Energy utility AGL has hiked the interim dividend following a return to profit as it continued to benefit from rising power prices which more than offset lower sales volumes.
In the December half it posted a net profit of $325 million, a reversal from the loss of $449 million a year earlier, with the performance masking a deterioration in electricity sales volumes.
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AGL has been lifted by rising power prices as well as fewer numbers of customers switching supplier than their competitors. Photo: Robert Rough
The interim dividend has been hiked to 41c from 32c, thanks to a change in the dividend policy, as it now targets a payout of 75 per cent of underlying earnings up from 60-65 per cent paid out previously.
The underlying profit for the half was $389 million compared to $375 million earned a year earlier.
Rising wholesale electricity prices is beginning to flow through to the bottom line, it said.
"The impact of rising wholesale prices is expected to continue," AGL chief executive Mr Andy Vesey said. "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 roll-over of contracts.
Customer numbers were broadly flat across both consumer and business accounts, with only minor movement across states, with customers switching supplier offset by gains.
Customer 'churn' was 15.9 per cent up from 15.7 per cent six months earlier, which was below the broader churn in the market of 20.1 per cent, the company said.
But the volume of electricity sold into both the consumer and business markets fell markedly, declining by 8 nd 10 per cent respectively, it said, although stronger sales into the wholesale market helped to offset much of the decline, with the overall volume of electricity sold declining by 1.8 per cent.
Consumer sales were hurt by lower customer numbers, unfavourable changes in the mix olf customers across the residential and small business portfolios and a mild winter which was only partly offset by a cooler than average spring. Business customer volumes were hurt by customer losses "within a competitive price-driven market", it said.
But higher wholesale prices for electricity lifted the profit margin by $5.9 per megawatt hour it said, to $39 per MWh "which were passed on to consumer and business customers through disciplined price management", it said.
The company has left unchanged its forecast of a year to June underlying profit of $720-800 million, although earnings are expected to reach the top half of this guidance, it said.
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