The company that surprised everyone, even its own management, when it downgraded its full year earnings guidance in October, has confirmed it is on track to meet revised full year guidance after releasing its half year results today.
Australia’s largest gas and electricity retailer, AGL Energy (AGK) reported a net profit after tax (NPAT) of $182.8 million for the six months to 31 December 2007, and remains on track to meet 2008 estimates of between $330 million and $360 million.
NPAT was down 6.5% from $195.6 million reported in the previous corresponding period. AGL noted this was due to increased interest expenses.
The company is on track to deliver FY08 earnings before interest, tax, depreciation and amortisation (EBITDA) of $830 million to $875 million.
“These results confirm that AGL has a strong underlying business. We have also made a number of significant steps in continuing to pursue the company’s integrated energy company strategy,” managing director Michael Fraser said.
AGL’s merchant energy business delivered an operating EBIT result of $238.9 million, up 21% on the previous corresponding period.
AGL said the increase was driven by a 51% rise in earnings from power generation and energy trading which contributed operating EBIT of $145.1 million.
“The strong growth included contributions from the Torrens Island Power Station and Queensland generation and dispatch interests that were acquired in the 2007 calendar year,” the company said.
Its energy business recorded a drop in operating profit EBIT of $134.8 million, down from $136.6 million in the prior corresponding period.
The Sydney-based firm confirmed a fully-franked dividend of 26 cents per share and said it is on track to meet original guidance of between 52 and 55 cps for FY08.
Shares slid 1% to $11.04..
AGL has been trading consistently lower since early October when it fell from $16.74 per share on the back of an earnings downgrade.
