AGL Energy (ASX:AGL) - Managing Director & CEO, Brett Redman
Managing Director & CEO, Brett Redman
Source: Financial Review
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  • Shares in AGL Energy (AGL) fell almost 10 per cent yesterday as the company braces for “ongoing uncertainty” in the face of the COVID-19 pandemic
  • Underlying profit for the 2020 financial year fell 21.5 per cent to $816 million, compared to $1.04 billion the year before
  • Total revenue for the year also fell 8.2 per cent, from $13.25 billion in 2019 to $12.16 billion
  • The turmoil is expected to continue into FY21, with an anticipated further decline in underlying profit to between $560 million and $660 million
  • AGL Energy (AGL) shares are grey today, trading for $15.41 per share

Shares in AGL Energy (AGL) fell almost 10 per cent yesterday as the company braces for “ongoing uncertainty” in the face of the COVID-19 pandemic.

The annual filings released today showed a disappointing performance over the 2020 financial year, with underlying profit falling 21.5 per cent to $816 million, compared to $1.04 billion the year before.

This was largely driven by an outage at the company’s AGL Loy Yang power station, which generates approximately 30 per cent of Victoria’s power requirements on an annual basis. Unit two of the station was offline from May 2019 until January 2020, contributing to a broader decline in gas sales volumes, as well as an increase in depreciation and amortisation expenses.

Total revenue for the year also experienced a drop-off, sliding 8.2 per cent from $13.25 billion in 2019 to $12.16 billion.

Brett Redman, Managing Director and CEO of AGL Energy, noted that the turmoil is likely to continue into next year.

“FY21 will be a year of considerable uncertainty as we navigate the COVID-19 pandemic and its economic impact.

“Market and operating headwinds to AGL’s margin from the maturing of lower-cost gas supply contracts and sharp falls in wholesale prices for electricity and renewable energy certificates have accelerated as a result of the pandemic,” he said.

Brett went on to say that depreciation expenses following the recent completion of capital reinvestment programs, along with insurance, regulatory and compliance costs, are likely to continue to rise.

As such, the company is expecting a further slide in underlying profit for the 2021 financial year, with current forecasts of between $560 million and $660 million.

This reflects an estimated $150 million decrease in both wholesale gas and wholesale electricity margins, due in part to higher supply costs, lower year-on-year market prices and lower customer revenue.

AGL Energy (AGL) shares are grey today, trading for $15.41 per share at 11:33 am AEST.

AGL by the numbers
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