First Impression: AGL Energy (AGL) 1H17

Energy Markets Operating EBIT up 2% to $1214m comprising Customer EBIT steady $230m, Wholesales Markets up 2% to $985m. New Energy EBIT ($1m) as compared to ($5m) in pcp | Net operating cash flow down 30% $471m | Outlook: AGL has narrowed NPAT guidance to “top half of prior guidance range of A$720-800m”. While AGL expects benefits from rising wholesale prices to continue, this will be phased over time due to competition, customer affordability and the rollover of contracted positions. Guidance also takes into account gas portfolio headwinds as flagged previously (lower Qld margins, 1Q supply disruptions and mild weather in July/August).