While AGL modestly beat expectations for full-year earnings in 2018-19, the outlook for the new financial year failed to enthuse, even though the company warned of the biggest problem - a $100 million-plus cost at a Victorian power station - months ago.
AGL shares at least steadied yesterday after the solid 7.7% sell-off on Tuesday in the wake of news of a firm but indicative approach to telco Vocus at $4.85 a share and the $100 million cut to expected 2019-20 earnings from a lengthy electricity generator outage at the Loy Yang station in Victoria.
Fourth time lucky for Vocus? The telco, Vocus will open its books exclusively to AGL Energy, less than a week after a Swedish private equity group, EQT withdrew its non-binding approach after doing due diligence.
AGL Energy has surprised the market with a late revelation on Friday evening that a fault and surprise shutdown of a key generating unit at its most important Victorian power station means next financial year’s profit will be lower than previously expected.
Proudly Australian, with more than 180 years’ experience, AGL (ASX:AGL) operate the country’s largest electricity generation portfolio, and are the largest ASX-listed investor in renewable energy, and have more than 3.6 million customer accounts.
AGL had hinted at a desire to move into the telco space at Macquarie's recent conference but rather than muck around, it has put in a bid for Vocus Group ((VOC)) below the bid that private equity recently withdrew.
Credit Suisse expects a -25% fall in Newcastle coal prices to be sustained. In terms of electricity, the broker believes interventionist federal policy will mean a return to oversupply beyond 2022 and, thus, a return to coal cost as the price setter.