The AGL Energy Ltd (ASX: AGL) share price will be on watch today after it reported its FY19 result.
AGL is one of Australia’s largest electricity generation portfolio owners and operators and the largest ASX-listed investor in renewable energy. As of 2018, AGL had more than 3.6 million customer accounts.
AGL’s FY19 Result
AGL reported that its statutory net profit after tax (NPAT) fell by 43% to $905 million.
The statutory profit fell due to a negative movement in the fair value of financial instruments of $139 million, largely reflecting higher prices for electricity and the way AGL hedges its prices for electricity and the way AGL hedges its electricity generation position to manage pricing risk through forward contracts.
The underlying net profit after tax rose by 2% to $1.04 billion.
AGL saw an increase in customer numbers over the course of the year and a reduction in the level of customer churn as well as near record generation output from our electricity fleet including an increasing share of non-thermal generation as the company delivers the Silverton and Coopers Gap wind projects via the Powering Australian Renewables Fund,
AGL Dividend
AGL has declared a final dividend for FY19 of 64 cents per share, franked to 80%.
That means the total dividend declared for FY19 is $1.19 per share, up 2 cents per share for the year, generally in line with growth in underlying profit after tax.
AGL Share Buy-Back
AGL has announced a on-market share buy-back of up to 5% of its issued shares over the next 12 months to return excess funds to shareholders.
AGL Acquires Perth Energy
AGL is going to acquire Perth Energy from Infratil Ltd (ASX: IFT) for up to $93 million, $74 million now and potentially $19 million later.
Perth Energy has the 120 MW Kwinana Swift Power Station, 1,400 GWh of electricity sales and an emerging gas retail business. It had $252 million of revenue in FY19.
Is AGL A Buy?
AGL is guiding that underlying profit after tax will be between $780 million to $860 million, which will be a sizeable decline if that’s what occurs.
An outage at Unit 2 of AGL Loy Yang, an increase in depreciation and lower energy prices are the key causes.
With energy prices under such scrutiny at the moment, I don’t think that AGL is an attractive growth share, particularly as it is predicting profit declines this year. I think the reliable ASX shares in the free report below could be better.
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