While Australians struggle with surging power bills and governments spend billions trying to alleviate the impact, energy company AGL has revealed its profits will boom.
Shares in AGL jumped 14 per cent on Friday after the company revealed that its underlying pre-tax earnings will jump by about $100 million this year.
Its post-tax underlying profit will be between $255 million-$285 million, which is an apparent increase from its previous guidance of between $200 million-$280 million.
Next year will be even better. Underlying profit after tax could more than double this year’s earnings and be between $580 million and $780 million.
Last week, AGL announced its energy prices for millions of Australians would increase by 26 per cent. Competitor Origin Energy has also announced similar price rises.
Prices will rise for those on variable rate deals in NSW, Queensland and South Australia on July 1, and in Victoria on August 1.
The average price increase is $447 in Queensland (26.4 per cent), $540 in NSW (29.7 per cent), $447 (26.4 per cent) in Victoria and $565 (29.8 per cent) in South Australia for AGL.
For Origin, electricity prices will rise $407 (21.1 per cent) in NSW, $347 (21.6 per cent) across Queensland, $361 for Victorians (25.5 per cent) and $405 (24.2 per cent) in South Australia.
AGL chief executive Damien Nicks said the business was highly leveraged to wholesale prices, which had increased significantly in recent years.
“We are acutely aware of the impact to our customers in this inflationary period,” Mr Nicks said.
“It’s a tough period for everyone.”
Amid rising energy poverty, Mr Nicks encouraged customers to switch to monthly from quarterly bills to help manage cost-of-living pressures. AGL is expecting an increase in customer debt, despite taxpayer-funded bill relief hitting accounts nationwide.
“We’ll be working with customers to help them as best as we possibly can,” he said.
The Queensland government will pay $550 to every household, while pensioners and concession card holders will receive more.
AGL said Friday’s announced increase in the profit guidance was because of an improved second half driven by increased generation.
The increase predicted for 2024 was based on sustained periods of higher wholesale electricity pricing, expected improvements in plant availability, the start up of batteries at Torrens Island and Broken Hill, as well as an expectation that forced outages would not occur.
Mr Nicks said AGL had positive momentum in operational performance, continued customer growth and progress in delivering its strategy.
“Looking ahead to 2024, without the challenging energy market conditions that we saw at the start of this financial year, namely widespread planned and unplanned outages coupled with unprecedented market volatility, we expect 2024 to be a stronger year as we see sustained recovery of wholesale electricity prices roll through,” Mr Nicks said.
-with AAP
- This article first appeared in InQueensland and is republished here with permission
