Company Interview / AGL powers ahead with $10B battery build

Key points:

Underlying profit at $640 million for AGL (ASX:AGL), in line with guidanceSignificant investments in batteries and firming assets to support energy transitionCustomer base and product offerings continue to expandDividend payout ratio maintained at 50-75% of underlying profit

AGL’s (ASX:AGL) business fundamentals remain robust, according to CEO Gary Brown, who highlights ongoing investments totalling $900 million to underpin future growth. Emphasis falls on battery deployment and recent acquisitions, with a key achievement being the $640 million in underlying net profit after tax, matching previously issued guidance. Brown attributes the full-year net loss primarily to mark-to-market movements in black and green prices, but stresses that underlying profit is the primary focus. The $45 million earnings contribution from AGL’s current battery portfolio excites Brown, along with plans to deploy around $10 billion into renewable and firming assets, with the company on track to exit coal by 2035.

Brown outlines AGL’s customer-centric strategy, noting expansion into gas, telco, broadband, and even Netflix offerings. Customer numbers have increased year-on-year, and the Net Promoter Score sits at a strong +8. Brown states that AGL’s efforts to attract data centre operators to its energy hubs in Victoria, New South Wales, and South Australia are expected to drive future demand.

Looking forward, Brown says underlying EBITDA is expected to increase year-on-year, despite higher depreciation and amortisation costs. Dividend payout guidance remains at 50-75% of underlying profit. Brown expresses confidence in AGL’s (ASX:AGL) net zero targets and ongoing safety performance improvements.