AGL Jumps Most in Six Months on Strong Battery Performance
(Bloomberg) -- AGL Energy Ltd. shares jumped the most in six months as Australia’s largest power producer’s batteries helped offset declining wholesale electricity prices.
Shares in the Sydney-based company rose as much as 6.1%, the most since Feb. 11, paring this year’s decline. The company said Wednesday that underlying profit after tax fell 1.7% to A$631 million ($445 million) in the year through June 30, and it forecast A$470 million to A$670 million for the current fiscal year.
AGL is increasingly looking to batteries and renewable energy as it retires its aging fleet of coal plants, under pressure from its biggest shareholder, billionaire Mike Cannon-Brookes. Australia’s rapid energy transition has seen renewables’ share of generation rise to more than 40% in the main grid, leading to lower prices and pushing out fossil fuel plants.
“The improved availability and flexibility of our generation asset portfolio, including the continued strong performance of our batteries, supported earnings resilience in a period of low volatility,” Chief Executive Officer Damien Nicks said on an earnings call. Value is shifting toward flexible assets, while increased electrification, higher EV penetration and AI data centers are driving strong long-term demand growth, he said.
AGL said its batteries contributed A$57 million to total earnings before interest, taxes, depreciation and amortization, an increase of A$10 million from a year earlier, despite lower market volatility. Capital expenditure yield from the company’s growing battery fleet has risen to 20%.
The utility declared a fully franked final dividend of A$0.26, taking fiscal year dividends to A$0.50, slightly higher than estimates.
“We expect a modestly positive market reaction with strong operational performance across generation and retail, solid FY27 guidance and a modest dividend beat,” Citi analysts Tom Wallington and Sumeet Ozarde said in a note.
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