MELBOURNE (Reuters) - AGL Energy <AGL.AX>, Australia's top power producer, beat market forecasts with a 14 percent rise in annual underlying profit on Thursday on the back of rising electricity prices, and forecast profit growth of up to 25 percent in the year ahead.
Power prices have soared in Australia, due to the rise of wind power which has led to the closure of some coal-fired plants. At the same time natural gas prices have jumped, driving up the cost of gas-fired electricity, needed when the wind is low.
The price hikes are hurting manufacturers and households, which has led the government to put pressure on AGL, the country's second-largest power and gas retailer, and its rivals Origin Energy <ORG.AX> and EnergyAustralia <0002.HK>, to cut power prices.
AGL's underlying profit rose to A$802 million ($633 million) for the year to June from A$701 million a year ago, ahead of analysts' forecasts around A$789 million.
The company said it expects underlying profit to jump to between A$940 million and A$1.04 billion in the year to June 2018. That compares with analysts' forecasts around A$982 million, according to Thomson Reuters I/B/E/S.
"This guidance reflects expected continued earnings growth in our electricity business, (and) a return to margin growth in our gas business," AGL said.
AGL's full year dividend of 91 cents a share beat analysts' forecasts around 88.6 cents.
($1 = 1.2669 Australian dollars)
(Reporting by Sonali Paul; Editing by Richard Pullin)
