MELBOURNE, Australia--Australian utility AGL Energy Ltd. (AGL.AU) said it swung sharply back to profit over the last financial year as it shrugged off year-earlier charges and benefited from higher wholesale electricity prices and cost cutting.
AGL notched up a net profit of 539 million Australian dollars (US$425.2 million) in the year through June. It was pitched to a loss of A$408 million the year before as it absorbed charges for its decision to exit gas exploration and production to focus on commercial and retail energy sales in the face of the global slump in crude-oil prices.
Continue Reading Below
Stripping out one-time items, including a loss of A$263 million in the just-ended year from changes in fair-value accounting, earnings for the year were 14% higher at A$802 million, the company said. That was marginally ahead of its guidance for earnings of up to A$800 million.
The natural-gas market along Australia southeastern seaboard has tightened sharply in recent years even as the country has sharply lifted gas exports from three big liquefied natural gas plants now operating on the east coast. That has increased volatility in electricity pricing even as power suppliers develop new wind- and solar-generation, and heightened the risk of government intervention in the market. Canberra has warned it may flex new powers to restrict LNG exports from next year if it anticipates a gas shortfall.
One of the country's oldest companies, AGL traces its roots to 1837 and the company responsible for introducing gas lighting to Sydney streets. The company in June said it was pushing ahead with the A$295 million development of a new gas-fired power station in South Australia, which ultimately should drive cost savings as it also mothballs four units at an existing 50-year-old power plant.
AGL said it would pay a final dividend of A$0.50 a share to bring the full-year payout to A$0.91, up from A$0.68 last year.
Write to Robb M. Stewart at email@example.com
(END) Dow Jones Newswires
August 09, 2017 18:48 ET (22:48 GMT)