AGL Energy Limited (AGK.AX), a seller and distributor of gas and electricity in Australia, reported that its statutory profit after tax for the financial year ended 30 June 2020 was A$1.015 billion, up 12 percent on fiscal year 2019 as a result of a positive movement in the fair value of financial instruments, reflecting lower forward prices for electricity and the way AGL hedges its electricity generation position to manage pricing risk through forward contracts.
Underlying profit after tax was A$816 million, down 22 percent from last year. The principal drivers of the decrease in profit were the Unit 2 outage at AGL Loy Yang, reduction in gas sales volumes, lower wholesale electricity and large-scale generation certificate prices, and increased depreciation and amortisation expense.
AGL has declared a final dividend for fiscal year 2020 of 51 cents per share. Total dividends declared for fiscal year 2020 are 98 cents per share The final dividend will be payable on 25 September 2020 with a record date of 27 August 2020.
AGL said it currently has more than A$1 billion of cash and undrawn debt facilities available with no major debt refinancing due to be undertaken before November 2021. As a result of the strong liquidity, AGL announced that it intends to undertake a Special Dividend Program over fiscal year 2021 and 2022.
Under the Special Dividend Program, AGL anticipates paying special dividends of up to 25 percent of Underlying Profit after tax, thereby augmenting AGL’s dividend policy payout ratio of 75 percent to take the effective payout ratio to 100 percent of Underlying Profit after tax over this period.
AGL also announced that it expects to reduce franking on dividends to zero in fiscal year 2021 and fiscal year 2022 while it utilises historic tax losses.
AGL expects underlying profit after tax to be between A$560 million and A$660 million in fiscal year 2021. This includes an expected A$80 million to A$100 million after tax benefit from insurance proceeds relating to the unplanned outage at AGL Loy Yang Unit 2 that impacted fiscal year 2020.
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