AGL unchanged: The controversial energy company was out with a strategy update today along with earnings guidance for FY23 that was broadly inline with existing expectations:
- They will close Loy Yang A in Victoria in 2035, a decade ahead of originally planned, although said that Liddel & Bayswater would still be closed at some stage between 2030-2033 i.e. no change there.
- They will spend $20bn on new zero-emission generation which mirrors the amount that Grok & Brookfield said they would need to transition the company.
- They said underlying EBITDA for FY23 would be $1,250m -$1,450m with underlying profit after tax of $200-$320m. Consensus expectations were sitting at $1,330m EBITDA & $300m profit.
The earnings number came as an initial relief for the market, however, there is clearly a lot of investment that needs to occur to make these longer-term plans a reality & get to the targeted 12GW of capacity by 2036. This includes investment in power generation but also investment in transmission, while the national energy market will need to provide a structure that incentivises investment right across the board i.e. more change is needed here. Clearly, a complex issue with a lot more water to go under the bridge.
MM remains bullish AGL, believing the market is undervaluing its assets
Add To Hit List
