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AGL Energy reports strong interim earnings and raises full-year guidance

AGL Energy (ASX:AGL) reported a sharp improvement in interim earnings on Thursday and a significant jump in its full-year guidance range.

The company stated that it was now expecting a substantial increase in full-year underlying profit to a range of $680 million to $780 million for fiscal 2024, compared with its prior range of $580 million to $780 million.

This came after AGL’s underlying net profit after tax for the six months to December 31 surged to $399 million, compared with $87 million a year earlier.

This result exceeded market forecasts, which were around $311 million, and was attributed to steadier market conditions, higher prices, and smooth operation of the company’s assets.

CEO Damien Nicks stated, “Our first-half result was driven by improved fleet availability and flexibility, along with more stable market conditions.”

He continued, “The increase in earnings from our well-risk-managed gas portfolio and customer business also contributed to this result, despite overall lower customer demand.”

AGL also projected that its 2023-24 underlying EBITDA would rise to $2.03 billion to $2.18 billion, against its previous forecast of $1.88 billion to $2.18 billion.

The surge in earnings led to a surge in rewards for shareholders, with the interim payout set at 23 cents a share compared to 8 cents a share in the December 2022 half.

Given that the company paid a total dividend for 2022-23 of 31 cents a share, shareholders can expect a payout comfortably higher than last year’s when the full-year figures are released in August.

AGL shares were down more than 17% year-to-date up to Wednesday night’s close, making the market reaction on Thursday significant in determining investor sentiment toward the higher result, forecast, dividend, and prospects of a higher full-year payout.