AGL posts $408m loss, hit by write down on coal, gas assets
One of Australia’s top power retailers, AGL, has posted a net loss of $408 million for the full year, hit by a write-down on its coal seam gas assets.
In February, AGL said its natural gas assets would no longer be a core business for the company because of the “volatility of commodity prices and long development lead times”, leading to an impairment charge of $795 million before tax.
Its underlying profit, however, came in at $701 million, a rise of 11 per cent compared to the prior year.
“Our key generation assets, wholesale market operations and customer portfolios delivered a strong underlying profit result,” chief executive Andy Vesey said in a statement to the ASX.
“This reflects our focus on operational execution and driving value through margin and cost discipline at the same time as we undertake the transformation of AGL.”
It also flagged it would no longer proceed with its Gloucester Gas Project, with operations expected to cease by 2023.
The company wrote down the project by $275 million the previous year.
The fall in global oil prices has had a consequent effect on long-term Queensland gas prices and this has resulted in an impairment to AGL’s Queensland natural gas assets including Moranbah, Silver Springs and Spring Gully.
AGL said it has undergone significant restructuring to a new operating model, which resulted in a cost of $60 million, but said it expects to deliver earnings growth in 2017.
Shares in AGL slumped 4.1 per cent to a one-month low of $19.54 by 1:13pm (AEST).
AGL said the final dividend would come in at 36 cents per share, with its full-year dividend up 6 per cent.