AGL Energy (AGL) shares held up well yesterday after the company issued a surprise warning of a cut to 2015-16 profit because of problems at its Liddell coal-fired power station in the Hunter Valley region of NSW.
In a statement to the ASX, AGL Energy said a plant problem would see electricity production take a hit in the next couple of months from the station, and group net profit could be hit to the tune of $20 million.
But the company said that despite this news, it was retaining its guidance for underlying profit in 2015-16 to be in the upper half of the guidance range of $650 million-$720 million, subject to normal trading for the rest of the year.
Investors liked that part of the announcement and the shares only lost 0.3% to end the day at $18.17.
AGL 1Y – AGL Investors shrug off Liddell issues
AGL said a leak in a boiler tube of one of the four units at the power station, had forced a more detailed inspection of all the units and if problems are found, repairs will be made straight away.
Two units have been taken out of service already for repair, while two others are running at reduced capacity.
A third unit will be closed for repair work on about from next week (March 28), while the fourth will be closed for repairs about the time that work has been completed on the first two.
The cost could be between $15 and $20 million over the next few months which would come off group profits for the financial year.
“The estimate reflects both the direct loss of generation revenue and estimated broader impacts on the electricity trading portfolio,” AGL said in the statement.
AGL acquired the 2000-megawatt Liddell operation in 2014 as part of its $1.5 billion takeover of Macquarie Generation from the NSW government. Liddell is scheduled to close by 2022.
