Australia’s AGL posts lower profit as cost-of-living concerns curb price rises (updated)

AGL Energy

12/02/2025 24:30

* 
      HY underlying NPAT down 6.5%, but beats consensus
    

        * 
      Interim dividend of 23 Australian cents per share
    

        * 
      Narrows FY25 earnings outlook
    

  
 (Recasts with forecast, adds details throughout and CEO
comments in paragraph 8)
    By Christine Chen
       Feb 12 (Reuters) - Australia's top power producer AGL
Energy  AGL.AX  posted a drop in half-year profit and narrowed
its earnings forecast on Wednesday as cost-of-living concerns
forced it to absorb higher electricity costs rather than pass
them onto consumers.
    Underlying profit fell 6.5% to A$373 million ($234.8
million) in the six months to December 31, 2024 but was still
ahead of analyst expectations of A$307 million.
     Statutory profit also dropped to A$97 million from A$576
million and earnings from consumers were down by one-quarter to
A$102 million.
    Chief executive Damien Nicks said earnings were "strong" and
in line with expectations, narrowing guidance for full-year
profit to between A$580 million and A$710 million, with a higher
midpoint from A$530 million-A$730 million previously. 
    AGL is one of Australia’s main electricity retailers
alongside Origin Energy and Energy Australia.
    Known as the “Big 3”, they have faced accusations of
exploiting their market power amid a cost-of-living crisis, with
an inquiry by the Australian Council of Trade Unions finding
last year they overcharged households.
    AGL said the wholesale cost of electricity was higher across
all Australian states, but it held back on passing on increases
due to affordability concerns, causing margins from supplying
energy to consumers to fall 16.7% to A$270 million.
    “Assisting our customers with the ongoing cost-of-living
pressures remains a key priority,” Nicks said.
    AGL also faced margin compression as customers opted for
lower-priced gas and electricity plans, the company said.
    But its telecommunications business posted strong growth,
with gross margins jumping 53.8% to A$20 million due to
increased broadband and mobile customer numbers.
    AGL said total operating costs were up 3.2%, driven by
inflationary pressures and higher costs to keep its thermal
power plants.
    Increased investment in renewables, including the Firm Power
and Terrain Solar business, also ate into profits.
    Capital expenditure increased two-fold to A$667 million,
with AGL ramping up investment in battery storage projects,
including the ongoing construction of the Liddell Battery
project.
    The Sydney-headquartered firm, which counts tech billionaire
Mike Cannon-Brookes as its top shareholder, declared an interim
dividend of 23 Australian cents per share, below the 26
Australian cents declared last year.
    Shares of AGL were up 2% in early trading off the back of
the consensus-beating result, as the ASX swung between red and
green territory.

($1 = 1.5896 Australian dollars)


 (Reporting by Christine Chen in Sydney and Sameer Manekar and
Rajasik Mukherjee in Bengaluru; Editing by Shilpi Majumdar and
Stephen Coates)
 ((Sameer.Manekar@thomsonreuters.com
Rajasik.Mukherjee@thomsonreuters.com))