The AGL Energy Ltd (ASX: AGL) share price is charging higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy provider closed yesterday trading for $11.71. In morning trade on Wednesday, shares are changing hands for $11.99 apiece, up 2.4%.
For some context, the ASX 200 is about flat at this same time.
This outperformance follows the release of AGL's half-year results covering the six months to 31 December (1H FY 2025).
Here are the highlights.
AGL share price lifts off on results
The AGL share price is marching higher after the company reported a 7% year on year slide in underlying net profit after tax (NPAT) to $373 million, broadly in line with market expectations.
AGL's statutory profit after tax came in at $97 million. This included significant item deductions over the six months of $245 million. The biggest contributor was the $165 million increase in onerous contract provisions. AGL also reported $45 million in retail transformation costs and a $31 million impact from negative movement in the fair value of financial instruments.
On the earnings front, underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) dipped 1% from 1H FY 2024 to $1.07 billion.
The board declared a fully franked interim dividend of 23 cents per share. That's down from 26 cents per share for the FY 2024 dividend, though that one was unfranked. Eligible shareholders can expect to see that passive income paid out on 27 March.
Turning to the balance sheet, at 31 December, AGL had $1.45 billion of cash and undrawn committed debt facilities available.
What did management say?
Commenting on the results lifting the AGL share price today, CEO Damien Nicks said:
We delivered a strong first half result in line with expectations, driven by the flexibility of our generation fleet and its ability to capture higher realised electricity pricing. This included continued strong earnings from our growing battery portfolio.
As anticipated, the result was impacted by increased consumer customer margin compression due to lower customer pricing and heightened market competition.
Our increased investment in the growth of the business and reliability and flexibility of our assets, combined with the impact of inflation, led to higher operating costs and depreciation and amortisation.
Addressing AGL's ongoing retail transformation program, Nicks added:
Our retail transformation program, which includes the implementation of Kaluza as announced last year, is progressing and already delivering benefits. Product simplification has led to a 19% reduction in customer plans, and we've seen operating cost benefits for the half.
We also completed the 20% strategic equity investment in Kaluza in January 2025.
What's next for the AGL share price?
Looking at what could impact the AGL share price in the months ahead, the ASX 200 energy provider narrowed its FY 2025 earnings guidance range.
The new guidance for the full 2025 financial year underlying EBITDA is now between $1.935 and $2.135 billion, from the previous range of $1.870 and $2.170 billion.
The new guidance range for FY25 underlying NPAT is between $580 and $710 million, from the previous range of $530 and $730 million.
Nicks said the company's first-half results "mean we are on track to deliver full-year earnings in line with our FY25 guidance range, and the reinstatement of a fully franked dividend for our shareholders".
The AGL share price is up 36.3% since this time last year, not including dividends.
The post Up 36% in a year, why is the AGL share price leaping higher again today? appeared first on The Motley Fool Australia.
Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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