AGL on Wednesday reported a half-year statutory net profit of $97 million, down $479 million, as it responds to market pressure to exit coal-fired power generation.
Underlying profit was $373 million, down 6.5 per cent on a year earlier, on higher operating costs to maintain generation and as consumers swapped products.
"The retail market has seen high volumes of customer product swapping in recent years due to price increases and broader cost-of-living pressures, which have also increased pressure on margins," chief executive Damien Nicks said.
The "strong first half" was in line with expectations, driven by the flexibility of the generation fleet and its ability to capture higher realised electricity pricing, including continued strong earnings from a growing portfolio of big batteries, he said.
But AGL declared an "onerous contract provision" of $235 million for various renewable power purchase agreements, largely on lower forward prices for large-scale generation.
Coal fuel costs rose 7.4 per cent driven by an increase in generation at Bayswater Power Station in NSW, and gas costs for electricity generation rose 42.6 per cent as the market operator directed the Torrens Island plant to support South Australia.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) eased one per cent to $1.068 billion in the half.
Earnings were expected to "moderate" in the second half of the financial year, AGL warned.
The range for underlying full-year EBITDA was narrowed to $1.935 billion and $2.35 billion, while underlying net profit was expected to be between $580 million and $710 million.
AGL declared a lower interim dividend of 23 cents per share, down from 26 cents per share a year earlier.
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