(Reuters) - AGL Energy, Australia's largest power producer, on Thursday reported a 10.3 percent rise in its half-year underlying profit helped by strong margin growth in wholesale markets and lower compliance costs in renewable energy markets.
For the six months to Dec. 31, underlying profit, which excludes one-off items, rose to A$537 million ($382.24 million) from A$487 million last year, the company said in a statement.
AGL stuck to its forecast range for underlying profit of between A$970 million and A$1.07 billion in the year to June.
Statutory profit after tax fell about 53 percent to A$290 million, including a gain of A$4 million treated as significant items and a loss of A$251 million from changes in fair value of financial instruments.
Total revenue came in at A$6.34 billion, down 1.8 percent year-over-year, hurt by decreased sales volumes in retail markets and lower pool generation sales in wholesale markets, among other issues.
The company flagged last August that average wholesale power prices, which had soared over the previous two years following the closure of two coal-fired power plants by two of its rivals, likely peaked in 2018.
AGL and its rivals, including Origin Energy and EnergyAustralia, owned by Hong Kong's CLP Holdings, have also come under pressure from the government to cut power prices to homes and businesses as soaring energy costs have become a hot political issue.
"Increased input costs for coal, supply constraints in the gas market, weather impacts and ongoing energy policy uncertainty continue to place upward pressure on electricity prices," said Chief Executive Brett Redman, who was promoted from chief financial officer last August after the unexpected departure of controversial CEO Andy Vesey.
AGL's second-half profit should benefit from recent power price spikes, when blistering heat drove up demand for air-conditioning while supply was stretched as coal-fired generators, including AGL's Loy Yang power plant, suffered breakdowns.
The company declared an interim dividend of 55 cents a share, compared with 54 cents a year ago.
(Reporting by Aby Jose Koilparambil and Ambar Warrick in Bengaluru; editing by G Crosseand Leslie Adler)
