AGL Energy has posted a $1.26 billion statutory full-year loss after two significant writedowns in a volatile year in the energy markets.
The loss includes a $680 million writedown of the value of its coal-fired power stations after last year accelerating plans to close them.
This was on the back of billionaire Mike Cannon-Brookes leading a successful shareholder revolt that scuppered plans to spin off the carbon-intensive assets.
The loss also includes an $890 million loss on fair value related to its energy derivatives contracts.
The power giant said on Thursday that, excluding writedowns, it had an underlying net profit after tax for the 12 months to June 30 of $281 million, up 25 per cent from a year ago.
“AGL’s financial result for FY23 reflects a strong second half following a challenging start to the year, which was impacted by volatile energy market conditions and forced plant outages, including the prolonged outage of Loy Yang Unit 2," managing director and CEO Damien Nicks said.
A generator rotor defect caused the issues at the coal-fired Loy Yang in Victoria, Australia's biggest power station, which AGL now plans to close in 2035.
AGL closed its 52-year-old Liddell station in the NSW Upper Hunter region in April, reducing its carbon dioxide emissions by eight megatonnes a year.
Mr Nicks noted the closure was accomplished with no forced redundancies, with 100 workers transferred to Bayswater station, also in the Hunter region.
AGL declared a final unfranked dividend of 23 cents per share, bringing its total dividends for 2022/23 to 31 cents, up 19 per cent from the previous year.
Looking forward, AGL forecast an underlying 2023/24 net profit of between $570 million and $780 million.
Sarah Xie, assistant vice president of Moody’s Investors Service, said AGL had benefited from a strong operating performance in the second half that offset the weaker-than-expected first-half results.
"We expect cash earnings momentum to continue into FY2024-25 as the company’s legacy energy hedge positions progressively roll off and customer tariffs are repriced, provided there is no recurrence of sustained generator outages," Ms Xie said.
"That said, higher tariffs will likely be partly offset by lower electricity generation volumes following the closure of Liddell Power Station in April this year, as well as higher operating costs from increased plant maintenance activities and inflationary pressure.”
AGL shares closed down 3.1 per cent to $11.22.
