Power giant AGL sinks to $1.1b half-year loss

Energy giant AGL has reported a half-year loss of more than $1 billion, capping off a tumultuous period in which billionaire climate activist Mike Cannon-Brookes became the company’s biggest shareholder, overhauled its board and put it on a more aggressive pathway to decarbonisation.

AGL, the nation’s largest greenhouse gas emitter, told investors on Thursday it had sunk to a $1.1 billion bottom-line loss for the six months to December 31, down from a $555 million profit.

AGL’s coal-fired power stations are Australia’s biggest source of greenhouse gas emissions.Credit:Justin McManus

The result was largely attributed to the impact of a prolonged unit outage at its ageing Loy Yang A coal-fired power station in Victoria’s Latrobe Valley last year, which slashed output at a time of high wholesale electricity prices, and a previously flagged writedown reflecting the decision to accelerate its exit from coal.

AGL’s newly appointed chief executive, Damien Nicks, said the impact of plant outages during “challenging energy market conditions” in July were reflected in the company’s financial results.

“Importantly, as units have returned to service, we’ve seen a significant improvement in portfolio performance at the end of the first half,” Nicks said. “We expect to have higher earnings in the second half of financial year 2023.”

AGL’s fleet of coal power stations are the biggest source of Australia’s greenhouse gas emissions, accounting for about 8 per cent of the national carbon footprint.

A successful campaign by Cannon-Brookes last May blew up AGL’s long-held ambitions to demerge its coal-fired power stations into a separate entity, forced the resignations of its chairman and chief executive, and eventually heaped enough pressure the board to dramatically speed up its decarbonisation agenda.

In September, the board resolved to close AGL’s last-remaining coal plant, Loy Yang A in Victoria’s Latrobe Valley, up to 10 years earlier in 2035, and invest $20 billion on renewable energy and back-up “firming” assets by 2036.

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