AGL back in the black as it slouches towards green

Australia’s biggest emitter AGL Energy has posted a return to profit as it rolls out a plan to wean consumers off coal-fired electricity.

The half-year statutory net profit was $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, AGL announced on Thursday.

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.

“I am very pleased with the improvements we have seen across the business,” chief executive Damien Nicks said.

A strong period of operational and financial performance provides headroom for investment in the future business and energy transition, adding to significant progress in transitioning the business towards clean energy, he said.

There would also be ongoing support for customers in need, he added.

Chief financial officer Gary Brown 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 operating cash flow and a larger and more diversified pool of capital.

Wholesale energy prices were lower across all states after government coal and price cap schemes introduced in 2022 and increased availability of generation units.

Total fuel costs for gas and coal generation fell 28.6 per cent.

The balance sheet recognised significant items of $193 million, or $120 million after tax, primarily related to movements in onerous contracts as electricity forward prices fell.

Additional reporting from AAP