The AGL Energy Ltd (ASX: AGL) share price is down heavily after delivering its FY25 result.
AGL is a major energy retailer and energy generator in Australia.
AGL FY25 result
Here are the main highlights from the report for the 12 months to 30 June 2025:
- Underlying EBITDA (EBITDA explained) declined 9% to $2 billion
- Underlying net profit after tax (NPAT) sank 21% to $640 million
- Statutory net loss of $98 million
- Final dividend per share of $0.25, down 29%
- Annual dividend per share of $0.48, down 21%
There were a few positives from the period, with total AGL customer services increased 78,000 to 4.6 million. The net promoter score (NPS) improved to +8 and the customer satisfaction increased to 81.6.
Total generation volume declined 3% to 33 TWh and the fleet equivalent availability factor declined 6.7 percentage points to 79.1%.
AGL said that its development pipeline increased to 9.6GW and the flexible fleet capacity grew to 8.3GW. A final investment decision was reached on the 500MW/2,000MWh Tomago battery in July and the 500MW Liddell battery is on track for the commencement of operations in early 2026.
What happened to the profit?
The company’s net loss of $98 million was impacted by significant items of $596 million (after tax), which included an increase in onerous contracts of $398 million and retail transformation of $87 million. AGL also said there was a negative movement in the fair value of financial instruments of $142 million. Profit is obviously key for the AGL share price.
The underlying net profit was hurt by lower wholesale electricity prices resetting through contract positions and the consumer customer margin shrinking after a period of heightened market activity, as well as a decision not to fully pass through cost increases to customers to help with affordability.
There were also earnings impacts in its thermal plants, particularly in the second half of the year, while its growing battery portfolio is delivering strong earnings.
Increased depreciation and amortisation also added to the headwinds on profit, reflecting the continued strategic investments in its assets.
Guidance and outlook for the AGL share price
The ASX energy share said its FY26 guidance reflects a continued strong outlook for underlying EBITDA, with guidance of between $1.92 billion to $2.22 billion. The mid-point of the guidance suggests growth of 3.5%.
If the improvement does happen, AGL is expecting it to be driven by a rise in the improvement in plant availability and fleet availability, including the commencement of operations of the Liddell battery. It’s also expecting increased customer markets earnings, due to an improvement in the margin and growth.
But, this may be impacted by gas margin compression because of expiring gas supply contracts and higher operating costs reflecting investment in growth. Inflation impacts are offset by productivity and optimisation benefits.
The underlying net profit guidance is between $500 million to $700 million. The mid-point of that guidance suggests a decline of around 6%. That’s from higher depreciation and amortisation, as well as higher finance costs.
In the longer-term, AGL aims to more than offset any earnings impact from coal and gas re-contracting with earnings from its significant investment in flexible assets and the broader delivery of its strategy.
The energy world is a challenging space to forecast and predict what’s going to happen next, so there are other ASX dividend shares I’d rather buy than AGL at the current AGL share price.
