Energy group, AusNet has lifted its final dividend despite a near 13% drop in full-year profit to $253.9 million but says it expects to lift pay out again in the 2019-20 financial year which started on April 1.
Earnings lifted in the second half of FY19 and beat Morgans' forecast. Excluding customer contributions, operating earnings (EBITDA) were flat but still exceeded forecasts by 4%. Distribution guidance of 10.2c per security for FY20 implies 5% growth on a cash yield of 5.6%.
Following the recent underperformance of the share price Citi upgrades to Neutral from Sell and considers the stock fairly valued. The broker also updates its model for the FY18 results, which slightly missed expectations.
Ausnet’s revenue result came in ahead of forecast but the strength does not necessarily translate into material upgrades, the broker points out. Both electricity transmission and distribution are revenue capped.
AusNet’s FY report was broadly in-line, comment Citi analysts though the dividend might have disappointed some in the market. Citi has increased its price target on lower anticipated interest rates, but otherwise very much regards this proposition as a steady as she goes.