• HY underlying NPAT down 6.5%, but beats consensus
• Interim dividend of 23 Australian cents per share
• Narrows FY25 earnings outlook

Feb 12 (Reuters) - Australian power producer AGL Energy (AGL.AX) , opens new tab on Wednesday reported first-half underlying profit ahead of analyst estimates but narrowed its annual earnings forecast, citing competition and lower customer demand anticipated in the second half of the year.

AGL Energy narrowed its fiscal 2025 underlying post-tax net profit outlook to a range of A$580 million ($364.88 million) to A$710 million, compared with its previous expectation of A$530 million to A$730 million.

The mid-point of this new range is slightly below the Visible Alpha consensus of A$657 million, and substantially lower than the fiscal 2024 underlying profit of A$812 million , opens new tab.

The narrowing of the forecast reflects a strong first-half performance, with earnings expected to moderate in the second half due to lower customer gas and electricity demand, as well as ongoing customer competition, the power producer said.

It also narrowed its annual underlying operating earnings outlook to between A$1.94 billion and A$2.14 billion, the mid-point of which misses consensus of A$2.06 billion.

AGL, which accounts for nearly 20% of total electricity generation in Australia's National Electricity Market (NEM), is battling with lower contract prices — as the normalisation of high wholesale electricity prices seen in the previous fiscal year affects contract pricing and retail margins.

Higher operating costs due to inflationary pressures and increased expenses to keep its thermal power plants running crimped its bottom line.

Its first-half underlying profit fell to A$373 million ($234.80 million) for the six months ended December 31, below the A$399 million , opens new tab profit reported last year.

However, it comfortably surpassed the Visible Alpha consensus estimate of A$307.4 million.

"As anticipated, the result was impacted by increased Consumer customer margin compression due to lower customer pricing and heightened market competition," said Chief Executive Officer Damien Nicks.

Higher generation volumes at its coal-fired Bayswater power station in New South Wales and improved gross margin at its electricity and gas trading business helped cap the losses.

The Melbourne-headquartered firm, which counts tech billionaire Mike Cannon-Brookes as its top shareholder, declared an interim dividend of 23 Australian cents per share, below the 26 Australian cents declared last year.

($1 = 1.5896 Australian dollars)

Sign up here.

https://www.reuters.com/business/energy/australian-power-producer-agl-energys-first-half-profit-beats-street-2025-02-11/