The AGL Energy Ltd (ASX: AGL) share price is under the spotlight today after reporting its FY25 first-half result.
AGL HY25 result
This is the result for the six months to 31 December 2024, compared to the six months to 31 December 2023 (first half of FY24):
- Underlying EBITDA down 1% to $1.07 billion
- Underlying net profit after tax (NPAT) down 7% to $373 million
- Statutory net profit of $97 million
- Interim dividend of $0.23 per share, down 12%
The energy generator and retailer company’s statutory result included $245 million of ‘significant items’. AGL pointed to a $165 million increase in onerous contract provisions, $45 million of retail transformation costs and a $31 million negative movement in the fair value of financial instruments.
AGL revealed that the total customer services rose 46,000 to 4.5 million, while its customer satisfaction (net promoter score – NPS) remains positive at +3.
The company reported total generation volume of 15.9TWh, in line with HY24.
AGL was pleased to say that its retail transformation program is progressing and already delivering benefits, with its 20% investment in Kaluza completed in January. If Kaluza grows in size, it could support the AGL share price.
The energy business noted that its development pipeline has increased to 7GW. That includes the successful integration of Firm Power and Terrain Solar, which was acquired in September 2024. It also has a “clear pathway to [a] financial investment decision (FID) for 1.4GW of batteries over the next 12-18 months.”
Management comments
AGL Managing Director and CEO Damien Nicks said:
Our Retail Transformation program, which includes the implementation of Kaluza as announced last year, is progressing and already delivering benefits. Product simplification has led to a 19% reduction in customer plans, and we’ve seen operating cost benefits for the half. We also completed the 20% strategic equity investment in Kaluza in January 2025.
On the commercial and industrial customer front, we continue to help them electrify and decarbonise. We now have $130 million in EaaS portfolio capital committed or deployed, up 57% on 1H24, and commercial assets under management and monitoring have grown to 296 MW, up 26% on 1H24.
In transitioning our energy portfolio, our development pipeline has increased to 7.0 GW, which includes the successful integration of Firm Power and Terrain Solar acquired in September 2024. As we seek to accelerate options and our decarbonisation pathway where possible, we now have a clear pathway to Financial Investment Decision (FID) for 1.4 GW of batteries over the next 12-18 months.
This will add to our current flexible fleet capacity of 7.6 GW, which grew by 200 MW over the half with the addition of a second 200 MW virtual battery agreement with Neoen, and enable our ambition to build and operate a leading battery portfolio in the National Electricity Market. Construction of our 500 MW Liddell Battery is on schedule, and we now expect the first 250 MW to be operational by early 2026, and the remaining 250 MW by April 2026.
Outlook for the AGL share price
After delivering this first-half result, the company narrowed its guidance range for FY25.
Underlying EBITDA is now expected to be between $1.93 billion to $2.1 billion (compared to previous guidance of $1.87 billion to $2.17 billion).
Underlying net profit after tax is guided to be between $580 million to $710 million (compared to previous guidance of between $530 million to $730 million.
Earnings are expected to moderate in the second half due to: the ongoing value captured from the flexibility of its generation fleet expected to be partly offset by “typical weather seasonality”, ongoing customer competition, and increased depreciation, amortisation and finance costs.
With the AGL share price up more than 30% in the last 12 months, I don’t think the energy company is cheap. I wouldn’t want to buy it right now, but a decline in energy prices could unlock another buying opportunity. For now I’d look at other ASX dividend shares.
