Warm winter hits AGL profit

Reduced energy demand to shave up to $30m off underlying profit in FY 2014.

AGL Energy (AGK) has warned that a fall in energy demand due to a record warm winter will reduce its underlying profit.

In a statement to the Australian Securities Exchange, AGL said it expects underlying profit between $560 million and $610 million in fiscal 2014, compared with an underlying profit of $585.4 million in fiscal 2013. 

Record warm July to September temperatures in much of eastern Australia have reduced energy demand and shaved $25 million to $30 million of underlying profit, AGL said.

Changes to accounting for defined benefits superannuation arrangements will also reduce underlying profit by approximately $10 million, the group said. 

AGL said continuing high levels of competitive behaviour and price discounting are starting to abate but will constrain profit growth in fiscal 2014.

Guidance includes the expected contribution from Australian Power and Gas Company Ltd, which AGL expects to finish acquiring by the end of October.