* H1 underlying profit up 3.7 pct
* Sees FY17 underlying profit up at least 7 pct
* Result and guidance in line with analyst forecasts
* To decide on LNG import terminal by June 2018
(Adds AGL comments on importing LNG)
MELBOURNE, Feb 9 AGL Energy Ltd,
Australia's no.2 power retailer, benefited from rising
electricity prices in the first half of this financial year and
said on Thursday it expected them to climb further, offsetting
pain in its gas business.
Australians are paying more for electricity as the country
expands its use of wind and solar power to help cut carbon
emissions. At the same time gas price spikes, due to rising
liquefied natural gas (LNG) exports, are squeezing profit
margins for retailers, like AGL, who have to buy gas to supply
AGL reported a 3.7 percent rise in underlying profit for the
six months to December to A$389 million ($297 million). The
result was roughly in line with two analysts' forecasts.
"In our electricity portfolio, the impact of rising
wholesale prices is expected to continue," AGL Chief Executive
Andy Vesey said in a statement.
AGL said its full-year underlying profit would land in the
upper half its forecast range of A$720 million to A$800 million,
up from A$701 million last year, which is in line with market
"Our guidance continues to take into account the headwinds
in our gas portfolio that we have previously flagged," Vesey
said, pointing to supply disruptions in the September quarter
and weaker demand during a mild winter.
To help deal with a potential gas supply shortage in
southeastern Australia, AGL is considering building a terminal
to import LNG - once an improbable idea with the country set to
become the world's biggest LNG exporter by 2019.
"Initially there was a lot of skepticism, but we're seeing
building positive support for this," Vesey said on a conference
The company expects to make a final investment decision by
June 2018. It is considering building a floating LNG
regasification plant or a plant onshore.
AGL's shares rose as much as 4.6 percent to a record high of
A$24.05 after the result, although analysts said it was in line
"While upgrades to outer years are likely as the sell side
re-calibrates for the surging wholesale power prices, we suggest
the result, while a pretty solid one, is unlikely to be enough
to justify AGL's current valuation," RBC analyst Paul Johnston
said in a note.
($1 = 1.3087 Australian dollars)
(Reporting by Sonali Paul; Editing by Richard Pullin)