AGL has lopped its interim dividend by 15% after a slide in half-year profit caused by the outage of a major generator at a Victorian power station late last year.
AGL declared an interim dividend of 47 cents a share, down from 55 cents a share for the first half of the 2018-19 financial year.
But the company upgraded to its full-year profit guidance which would be in the “upper half” of the range of $800 million to $860 million.
That was appreciated by the market and the shares rose 3.4% to $20.18.
Statutory Profit after tax of $323 million included a loss of $17 million after-tax treated as significant items and a loss of $92 million after-tax from the changes in the fair value of financial instruments.
Excluding these items, the underlying profit after tax was $432 million, 19.6% down on the prior corresponding period.
The prolonged outage of a major generation unit at Victoria’s Loy Yang A coal-fired power plant was the culprit after an electrical outage in May damaged the internal workings of the machine which then had to be rebuilt.
That took longer than expected and didn’t return to service until December.
On top of that AGL blamed market headwinds “due to lower year-on-year prices for wholesale electricity as well as the very hot and dry winter, spring and early summer.”
CEO Brett Redman said the result reflected a “disciplined approach” in the face of increasing challenges.
“Profit is down year-on-year as per our guidance, but we are nonetheless tracking ahead of expectations,” he said.