AGL's Barry broadside

NSW Government policy has forced AGL to write down CSG assets but it will emerge a winner regardless of who wins the federal election.

Forget the federal election, energy producer and retailer AGL (AGK) has aimed its guns squarely at the NSW State Government for creating uncertainty.

AGL has blamed policy uncertainty and the introduction of exclusion zones over coal seam gas developments for a $343.7 million pre-tax impairment charge.

The charge was one of the few shadows that marred an otherwise stellar set of numbers. Statutory earnings of $388.7 million were 283.3% up on last year as the first full year of earnings from Loy Yang A power station were included.

That acquisition is now looking a long-term winner. After the federal election, regardless of which party takes power, the carbon tax either will be eliminated or sharply reduced. And that will lift the net present value of Loy Yang above the acquisition price.

The short-term effect, however, will be negative because of the removal or lowering of the transition assistance package.

As for the outlook, AGL has opted to wait until the annual meeting to provide earnings guidance as soft demand was offset by a solid operational performance.

Underlying profit came in bang on target, up 24.1% at $598.3 million.

Consumers may have adopted a more Spartan attitude to electricity use which, when combined with a mild winter, reduced overall energy demand. But AGL managed to lift earnings and revenue by grabbing market share, particularly in NSW, and with higher tariffs.

The Australian Power and Gas acquisition, expected to be given the regulatory nod next month, should add around 10% to the consumer base.

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