Although customer churn reached the highest levels seen for several years,the ASX-listed power,gas and telecommunications supplier on Thursday reported a big uplift in half-year underlying net profit,to $399 million,and upgraded its full-year earnings guidance towards the top end of its forecasts,between $680 million and $780 million.
Last financial year,the energy company backed by billionaire Mike Cannon-Brookes posted a $1.26 billion loss after its revenues were disrupted by costly coal-fired power station breakdowns,and it was forced to write down the value of one of its coal plants.
“In a period of heightened market activity,where we saw customer churn reach the highest levels for several years,I am pleased that we have seen growth in our overall customer services numbers,largely driven by our growing telecommunications business,” AGL boss Damien Nicks said.
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“Our first half result was driven by improved fleet availability and flexibility,more stable market conditions,along with the impact of higher wholesale electricity pricing from prior periods being reflected in pricing outcomes and contract positions,” Nicks said.
Analysts at RBC Capital Markets said AGL’s earnings “beat consensus and our expectations.” Investors reacted positively to stronger-than-expected revenues,adding nearly 11 per cent to the share price at $8.85.
RBC said a rapid rise in AGL’s costs is a concern. “We note that the gross margin for electricity and gas actually fell .. and that other costs .. grew 34.4 per cent relative to 1H FY23,” the analysts said.