Australia’s AGL Energy cuts profit forecast on hit from faulty generator

May 2 (Reuters) – Australian power producer AGL Energy (AGL.AX) on Monday trimmed its profit forecast for fiscal 2022 due to a hit from the shutdown of a unit at its Loy Yang A power station in Victoria after an electrical fault with a generator.

The company now expects underlying profit after tax for 2022 of between A$220 million and A$270 million ($155.4 million-$190.8 million), down from its earlier forecast of between A$260 million and A$340 million. It logged A$537 million of underlying profit in fiscal 2021.

A unit of the company’s Loy Yang A power station was taken out of service in mid-April due to a failure in the generator rotor insulation.

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The company said the impact of the outage is not recoverable through insurance and estimates a financial impact of about A$60 million in 2022, and a further A$13 million hit in fiscal 2023.

The Sydney-based power producer expects the faulty unit to return to service by Aug. 1, and is reviewing options to shift the planned outages at its power stations to make up for its shorter energy position.

AGL is looking to split into a bulk power generator and a carbon-neutral energy retailer by June 2022.

It has been hammered by an influx of cheap solar and wind power and government pressure on utilities to slash power prices to households.

($1 = 1.4156 Australian dollars)

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Reporting by Himanshi Akhand in Bengaluru; editing by Diane Craft and Stephen Coates

Our Standards: The Thomson Reuters Trust Principles.

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