Even AGL Energy (ASX:AGL) thinks its 2023-24 boom can’t be repeated in 2024-25.
AGL revealed on Wednesday that its core profit almost trebled due to improved performance at its power stations and higher electricity prices. Shareholders also benefited, with an unfranked dividend nearly doubling from the previous year.
However, the company indicated that the high returns of the past year are unlikely to be replicated in the next financial year.
AGL reported an 189% jump in its underlying profit for fiscal 2024, thanks to increased plant availability and higher electricity prices.
The underlying profit of $812 million surpassed the consensus of $798.3 million and sharply outperformed the troubled year of 2022-23, when plant problems in Victoria and wet weather flooding impacted plant availability and suppressed prices.
Underlying earnings rose 63% to $2.216 billion.
The outcome for 2023-24 met upgraded guidance issued in early May, when the company predicted a net profit between $760 million and $810 million (up from $680 million to $810 million) and an earlier bottom-end forecast of $580 million.
AGL declared an unfranked final dividend of 35 cents per share, bringing the total unfranked dividend for the financial year to 61 cents per share. This was almost double the 31 cents per share (unfranked) paid the previous year.
AGL managing director Damien Nicks attributed the stronger full-year result to higher wholesale electricity prices, increased margins on electricity sales to consumers, and improved thermal fleet availability.
“We continue to see growth as we help our residential and commercial customers electrify and decarbonise,” Mr Nicks said.
He acknowledged that ongoing cost-of-living pressures were affecting many Australians, including some of AGL’s customers. The company increased its two-year customer support package to $90 million.
AGL received significant government relief over the year, with more than $1 billion projected to be delivered by the end of 2025.
Australia’s leading generator aims to add 12 gigawatts of capacity by the end of 2025 and called for reduced red tape and faster approval processes for new assets.
However, AGL's guidance suggests that the substantial earnings gains of this financial year might not be repeated. The company forecasts underlying EBITDA for FY25 between $1.870 billion and $2.170 billion (compared to $2.216 billion in 2023-24), and underlying net profit between $530 million and $730 million ($711 million in 2023-24).
