AGL delivers $756m statutory profit and lifts dividend in FY26
In its FY26 results for the twelve months to 30 June 2026, AGL Energy reported a statutory profit after tax of $756 million, up $644 million on FY25. The result was driven in part by the divestment of its interest in Tilt Renewables, alongside steady performance across its integrated energy business.
Underlying EBITDA came in at $2,100 million, up 2% and in line with guidance, while Underlying NPAT of $631 million was down 2%. The company declared a total fully franked dividend of 50 cents per share for the year, including a final dividend of 26 cents per share, equating to a payout ratio of 53.3%.
Management framed the outcome as the strength of AGL’s integrated model helping to offset softer market conditions across the National Electricity Market (NEM).
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FY26 financial results at a glance
The full-year FY26 numbers show a substantial lift in statutory earnings alongside broadly stable underlying performance and improved cash generation.
The FY26 guidance upgrade in May signalled improving plant availability and stabilised consumer margins, with AGL raising the floor of its Underlying NPAT range to $610 million and flagging data centre electricity demand in the NEM pipeline at 34 TWh, well above AEMO’s own Step Change forecast.
| Metric | FY26 | FY25 | Change | Note |
|---|---|---|---|---|
| Statutory profit after tax | $756m | — | +$644m | Includes Tilt gain |
| Underlying EBITDA | $2,100m | — | +2% | In line with guidance |
| Underlying NPAT | $631m | — | −2% | In line with guidance |
| Total dividend (fully franked) | 50cps | — | Higher | 53.3% payout |
| Underlying operating cash flow | $1,693m | — | +$110m | 97% cash conversion |
The gap between the statutory and underlying figures reflects several one-off and non-cash items. The statutory result included a $268 million post-tax gain on the Tilt Renewables divestment, a $179 million post-tax positive fair-value movement on financial instruments (non-cash), and a $67 million post-tax gain on the revaluation of onerous contracts.
These were partly offset by $(227) million in post-tax asset impairments across the generation fleet and development projects, and $(69) million of post-tax Retail Transformation costs. Underlying NPAT strips out these movements to give a clearer view of ongoing business performance.
What drove the result across AGL’s integrated business
Customer Markets and generation performance
Total customer services reached 4.6 million, up 92,000 on FY25. Customer Satisfaction rose to 84.1 from 81.6, strategic Net Promoter Score improved to +10, and the churn advantage over the rest of the market widened to 4.9 percentage points. The company noted the successful integration of the Ampol Energy customer portfolio supported this growth.
On the generation side, the fleet Equivalent Availability Factor (EAF) lifted 4.3 percentage points to 83.4%, though total generation volumes fell 3.4% to 31.8 TWh. Flexible fleet capacity grew 0.4 GW to 8.7 GW, spanning batteries, hydro and 3.3 GW of coal-fired unit flexibility.
According to management, this flexibility enabled AGL to generate when market conditions were most favourable, despite a period of low price volatility in the NEM.
Margins and cost discipline
Gross margin across the gas portfolio decreased as lower-priced legacy gas supply contracts gradually rolled off, lifting gas purchase costs. Operating costs were held broadly flat during a period of persistent inflation, with $30 million of the targeted $50 million net opex reduction delivered in FY26.
CEO Commentary
“Our strong result reflected excellent business performance across AGL. The strength of our integrated business helped mitigate the impact of softer market conditions,” said Damien Nicks, Managing Director and CEO.
Understanding the energy transition thesis
The company is targeting the addition of 6 GW of renewable and firming capacity by 2030. Management positions this flexible and diversified asset portfolio as a source of earnings durability through the energy transition, rather than relying on generation volume alone.
Strategic execution and portfolio moves
The financial year featured a series of strategic milestones across generation, renewables and portfolio simplification:
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The 500 MW Liddell Battery commenced operations in July, while construction of the 500 MW Tomago Battery is well under way, with its Long-Term Energy Service Agreement (LTESA) secured.
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Construction commenced on the 220 MW Kwinana Swift Gas 2 Project in Western Australia.
The Kwinana Swift Gas 2 Project carries a $490 million committed capital outlay, backed by 10 years of AEMO-contracted Peak Certified Reserve Capacity revenue at $360,700 per MW with CPI escalation, targeting post-tax ungeared returns above 8%.
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Two 15-year Power Purchase Agreements were signed with Tilt Renewables, covering the Palmer Wind Farm and Waddi Wind Farm.
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AGL divested its 19.9% equity interest in Tilt Renewables for $750m (pre-transaction costs), crystallising a post-tax gain of approximately $268 million, with proceeds redeployed towards higher-returning firming projects.
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The company commenced engagement with potential capital partners for the development of a 2 GW+ wind farm portfolio.
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Kaluza signed ENGIE as its third major customer and largest deployment to date, more than doubling contracted meters to over 25 million meters.
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The telco business was divested alongside a long-term strategic partnership with Aussie Broadband, for consideration of approximately $115 million paid in ~7% of Aussie Broadband’s shares.
On its Retail Transformation Program, AGL delivered $25 million of savings ahead of plan. Following a review of the next implementation phase, the program is now expected to extend by up to 12 months, with costs increasing by an additional $100–150 million. The anticipated annual pre-tax cash savings of $70–90 million remain unchanged, though full benefits are now expected from FY30.
Dividend, balance sheet and capital position
AGL declared a final fully franked dividend of 26 cents per share, payable on 24 September 2026. The total FY26 dividend of 50 cents per share represents a payout ratio of 53.3%, within the company’s policy of 50–75% of Underlying NPAT.
Underlying operating cash flow (before significant items, interest and tax) rose $110 million to $1,693 million, with adjusted EBITDA-to-cash conversion of 97% (excluding a prior-year prepayment, rehabilitation, and margin calls), down from 101% in the prior year. At 30 June 2026, AGL held $1,551 million of cash and undrawn committed debt facilities.
This cash generation supports both the higher dividend and the ongoing construction of the Tomago Battery and Kwinana Swift Gas 2 Project.
FY27 guidance and outlook
For FY27, AGL provided the following guidance:
- Underlying EBITDA of $1,900m–$2,200m
- Underlying NPAT of $470m–$670m
- A targeted dividend payout ratio of 55–60% of Underlying NPAT, expected to be fully franked
- $50 million of sustainable net opex reductions targeted by FY27, of which $30 million has already been delivered
The company outlined the key drivers shaping FY27 guidance relative to FY26:
- Stable consumer energy margins
- A full year of earnings from the Liddell Battery
- Lower operating costs from the cost-out programme
- The impact of lower wholesale electricity prices rolling through contracted positions, although at a premium to current market prices through AGL’s hedged position and flexible fleet
- Increased gas costs as low-cost legacy contracts roll off
- An increase in depreciation and amortisation of approximately $50 million and a reduction in finance costs of approximately $30 million
AGL noted that all guidance is subject to any impacts from regulatory and government intervention, variability in trading conditions and plant availability. The company framed both its guidance range and targeted payout ratio as a reflection of the earnings resilience of the business and the durability of cash flows through evolving market conditions.
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