AGL Energy has acquired Perth Energy for $93 million as it continues to bolster its portfolio following a positive 2019 financial year.
Perth Energy is a Western Australian operator of gas-fired generation and gas retailing, with the deal forming part of AGL’s “growth agenda” through expanding and evolving its energy markets business.
The announcement coincided with the release of the company’s 2019 financial year results, which saw underlying profits after tax of $1.04 billion, a two per cent increase on the previous period.
This was accompanied by AGL extending its safety net, ensuring a minimum discount of five per cent to all residents and small business gas customers on standing offers after one year with AGL.
AGL chief executive officer Brett Redman said the results reflected the flexibility and quality of the company’s wholesale electricity generation business.
“It was a record year for capital expenditure, as we continued to increase investment in our existing generation fleet (and) progressed construction of the Barker Inlet gas-fired power station in South Australia for delivery in financial year 2020,” Redman said.
“We remain committed to our growth agenda of investing in optimising the performance of our existing portfolio, expanding and evolving our core energy market businesses- as we have done with the acquisition of Perth Energy.”
Despite this, Redman alluded to lower earnings in the year ahead, due to the impact of the extended outage of Unit 2 at AGL Loy Yang which was announced in June.
This coincides with higher depreciation following its recent increases in capital investment and “operating headwinds” from lower wholesale electricity and renewable energy certificate prices.
“Despite this lower earnings outlook, AFL’s operating outlook remains strong,” Redman insisted.
“We have entered the new financial year in a robust financial position, meaning we can invest back into the business and execute our growth strategy.”