Australia's AGL Energy lifts lower end of fiscal 2026 earnings outlook (updated)

AGL Energy

06/05/2026 24:01

Company lifts its fiscal 2026 operating earnings forecast

Sees pressure from softer market conditions in FY27

Sees Liddell battery fully operational by year-end

Adds AGL share price and CEO comments on diesel supply in paragraphs 4-8

By Scott Murdoch and Sneha  Kumar

May 6 (Reuters) - Australia's AGL Energy AGL.AX raised the lower end of its annual profit forecast range on Wednesday, banking on better plant performance and tighter cost control, and said it is well placed for the next three months during the global fuel crisis.

Australia's top power producer now expects 2026 underlying net profit after tax between A$610 million and A$680 million ($437.98 million and $488.24 million), compared with the A$580 million to A$680 million previously expected and a Visible Alpha consensus of A$646.3 million.

It also raised its annual operating earnings forecast to between A$2.06 billion and A$2.18 billion, compared with the A$2.02 billion to A$2.18 billion previously expected and the Visible Alpha estimate of A$2.14 billion.

AGL shares rose 0.42% on Wednesday while the S&P/ASX200 .AXJO was up 1.3%.

Amid diesel supply disruptions in Australia triggered by the Middle East conflict, Chief Executive Damien Nicks said AGL was well placed with fuel supplies and its Bayswater power station had 90 days worth of diesel on hand.

The plant uses diesel in start-up and shutdown processes for its coal-fired units and for heavy machinery and trucks.

"We're very comfortable with the supplies we have. We can continue to get access to diesel," he told the Macquarie Australia Conference in Sydney.

"We believe we'll continue to get it as an essential services provider."

AGL attributed the upgraded forecast to improved plant availability and flexibility, a good showing by its thermal generation fleet, improved customer markets performance and disciplined cost management.

While the broader sector faces headwinds from elevated fuel costs and geopolitical risks, the upgrade highlights that well-run operators with diversified assets and strong cost control can still navigate this environment successfully, said Tim Waterer, chief market analyst at KCM Trade.

"It's an encouraging sign for the Australian energy sector," Waterer said.

AGL, Australia's largest corporate carbon emitter, had said in February that it was targeting A$50 million in sustainable net operating cost reductions in FY27.

The company on Wednesday warned of pressure from softer domestic and global market conditions in fiscal 2027, along with declining wholesale prices in select locations.

AGL will take into account these factors in its 2027 forecast, to be presented at its annual results in August, together with the full-year contribution from its Liddell Battery project and cost-saving measures.

The project, a 500-MW grid-scale battery in New South Wales, is expected to be fully operational by June.

($1 = 1.3928 Australian dollars)

 (Reporting by Scott Murdoch in Sydney, Sneha Kumar in Bengaluru, additional reporting by Roshan Thomas; Editing by Jonathan Ananda and Subhranshu Sahu)

 ((Sneha.Kumar@thomsonreuters.com;))