PDF version and ASX announcement - AGL

146 Pages·2011·3.11 MB·English

AGL Energy Limited Level 22, 101 Miller St Locked Bag 1837 T: 02 9921 2999
ABN: 74 115 061 37 5 North Sydney NSW 2060 St Leonards NSW 2065 F: 02 9921 2552
www.agl.com.au

ASX statement
26 September 2011

Annual Report 2011
AGL Energy Limited is about to commence dispatch of its Annual Report
2011. A copy is attached.
Also attached is a copy of the letter sent to Shareholders to advise that
an electronic version of the Annual Report 2011 is available online.

Paul McWilliams
Company Secretary

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AGL Energy Limited Level 22, 101 Miller St Locked Bag 1837 T: 02 9921 2999
ABN: 74 115 061 375 North Sydney NSW 2060 St Leonards NSW 2065 F: 02 9921 2552
www.agl.com.au

26 September 2011

Dear Shareholder
2011 Annual Report
AGL’s 2011 Annual Report has now been released and is available electronically on our
website at: www.agl.com.au
To receive direct electronic communication in the future of when the Annual Report is
available, or to receive a printed copy, please access your Shareholder election details
online at the Link Market Services website (www.linkmarketservices.com.au) or complete
the enclosed Shareholder communication election form.
2011 Annual General Meeting
The 2011 Annual General Meeting will be held:
Commencing at 10:30am on Thursday 27 October 2011 at
Grand Hyatt Hotel, 123 Collins Street, Melbourne, Victoria.
The formal Notice of Meeting is attached.
If you are unable to attend, the AGL Directors encourage you to participate by voting on
each item of business using the Shareholder Voting Form included with the Notice of
Meeting.
2011 Final Dividend
For the financial year ended 30 June 2011, AGL’s Underlying Profit was $431.1 million, an
increase of 0.5 per cent on the previous year. The final dividend for 2011 is 31 cents, fully
franked, bringing the total dividend for the year to 60 cents per share. This is an increase of
1 cent per share on the 2010 dividend. The dividend will be paid on 29 September by
direct credit only.
Yours sincerely

Jeremy Maycock
Chairman

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AGL is taking action toward creating a sustainable energy future for our investors, communities and customers. Key actions are:
› Being selected as a member of the Dow Jones Sustainability Index 2006/07
› Gaining accreditation under the National GreenPower Accreditation Program for AGL Green Energy®, AGL Green Living® and AGL Green Spirit
› Being selected as a constituent of the FTSE4Good Index Series

AGL - Letter A few Words.indd 1 22/9/11 3:18:29 PM
2011 Annual Report
AGL Energy Limited ABN 74 115 061 375
Being engaged
Engaging with our stakeholders has always been at the heart of what
AGL does. Being engaged with all of our stakeholder groups – our
customers, the communities where we operate, our shareholders and our
employees – is one of the reasons we’re Australia’s largest private owner,
operator and developer of renewable generation assets. AGL is taking
action to engage more closely with all our stakeholders to lead Australia
in sustainable energy development and increase investment in
renewable energy.
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Contents
Introduction 1
Divisional Highlights 2
Group Highlights 3
About AGL 4
Our Integrated Strategy 5
Chairman’s Report 6
Managing Director’s Report 8
Sustainable Business Strategy 10
Economic 12
Customers 14
Community 16
People 18
Climate Change 20
Environment 22
Review of Operations 24
Retail Energy 24
Merchant Energy 26
Investments 29
Upstream Gas 30
Leadership Team 32
Corporate Governance 33
Reporting Contents 41
AGL Financial Calendar
25 August 2011 full year result
2011 and fi nal dividend
announced
2 September Ex-dividend trading
2011 commences
8 September Record date for 2011
2011 fi nal dividend
29 September Final dividend payable
2011
27 October Annual General
2011 Meeting
22 February 2012 interim result
20121 and interim dividend
announced
22 August 2012 full year result
20121 and fi nal dividend
announced
AGL’s Annual General Meeting
will be held at the Grand Hyatt,
123 Collins Street, Melbourne
commencing at 10.30am on
Thursday 27 October 2011.
1 Indicative dates only, subject to change/
Board confi rmation
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Divisional
Highlights
Retail Energy Merchant Energy Upstream Gas
> Operating EBIT increased > Operating EBIT fell by 2%, > Mosaic Oil was acquired
by 17% on the back of due mainly to the effects of during the year, adding 65 PJ
improved margins the severe weather events to gas reserves and opening
experienced in late January/ up new gas storage income
> Further improvements in early February opportunities
operating effi ciency, with
net operating costs as a > Improved rainfall increased > Proved plus probable (2P)
percentage of gross margin dam storage and generation gas reserves increased 32.4%
falling from 49.5% to 46.5% capacity at Eildon and to 2,089 PJ
Dartmouth
> Customer accounts increased > First booking of gas reserves
by 52,000 and dual fuel > The AGL Hallett 4 Wind Farm in AGL’s Hunter Gas Project
customer accounts up 8.1% was commissioned, and
to 1.47 million construction proceeded on the
AGL Hallett 5, Oaklands Hill
and Macarthur Wind Farms
$373.0m $378.2m $13.6m
Operating EBIT Operating EBIT Operating EBIT
($million) ($million) ($million)
402.8
386.1 378.2
13.6
373.0
318.7
266.8
5.5
4.11
2009 2010 2011 2009 2010 2011 2009 2010 2011
1 Excludes EBIT of $25.8m from assets sold in FY2009
AGL’s Retail Energy business continued to
perform strongly, offsetting the effects
of unusually severe weather conditions on
Merchant Energy’s results, and a much lower
contribution from AGL’s investment in the
Loy Yang A Power Station.
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Group
Highlights
AGL’s underlying profi t for the year was
$431.1 million, an increase of 0.5% on last year,
reflecting the effects of the unusual summer
weather experienced in eastern Australia.
$656.6m $431.1m 94.4 cents 5.0 TIFR2
Operating EBIT Underlying Profi t EPS – underlying
($million) ($million) (cents)
95.6 94.4
85.0
652.1 656.6
606.71
6.0
428.9 431.1
378.8 5.0
2.7
2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011
1 Excludes EBIT of $36.4m from assets sold in FY2009
2 Total Injury Frequency Rate
30 June 30 June 30 June
2011 2010 2009
$m $m $m
Profi t after tax from continuing operations 558.7 356.1 718.2
Profi t after tax from discontinued operations – – 877.9
Profi t after tax attributable to shareholders 558.7 356.1 1,596.1
Adjust for the following after tax items:
Signifi cant items 27.3 (49.9) (1,441.3)
Changes in fair value of fi nancial instruments (154.9) 122.7 251.0
Pro-forma adjustment – – (27.0)
Underlying profi t 431.1 428.9 378.8
Increase in underlying profi t 0.5% 13.2% 11.1%
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About AGL
AGL is Australia’s leading integrated renewable energy company and is Australia’s
largest private owner, operator and developer of renewable generation assets.
AGL is taking action towards creating a sustainable energy future for our
customers, our investors and the communities in which we operate.
AGL’s heritage began as The Australian Gas Light Company which was formed
in Sydney in 1837. It supplied gas for the fi rst public lighting of a street lamp in
Sydney in 1841 and was the second company to be listed on the then Sydney
Stock Exchange.
In October 2006, The Australian Gas Light Company demerged its energy business
and AGL began trading on the Australian Securities Exchange under the ticker AGK on
12 October 2006. AGL is one of Australia’s top 50 listed companies.
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Our
Integrated
Strategy
Upstream supply Transmission Distribution Retail markets
(core) (non-core) (non-core) (core)
Gas Production Gas Gas Gas
Renewable Generation Renewables
Thermal Generation Electricity Electricity Electricity
Upstream Supply Customer Energy Demand
> Increase direct ownership of gas to meet a substantial > Grow our electricity customer base in New South Wales
proportion of AGL’s long-term domestic demand for gas
> Expand the range of energy effi ciency services we can
> Invest in gas storage to provide security of gas supply offer our customers to help them manage their energy costs
for our customers during periods of peak demand
> Focus on managing and growing margins
> Increase control of peaking and renewable electricity
generation to be largely self-suffi cient in meeting customer
needs and the mandatory renewable energy target
AGL’s integrated strategy provides access to multiple
profi t pools and balances risk between upstream supply
of energy and our customers’ demand for energy.
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Chairman’s
Report
This was a challenging year
for AGL, but the Board is
confi dent our strategy will
deliver improved returns
for shareholders in the years
to come.
Financial Results Dividend
The statutory net profi t of your company was $558.7 million Although the underlying profi t is relatively fl at compared with last
compared with $356.1 million last year. However, a more useful year, I am pleased to report a small increase in the fi nal dividend. The
comparison for shareholders is that, on an underlying basis, fi nal dividend of 31 cents will bring the total dividend for the year to
net profi t of $431.1 million was up only slightly on last year’s 60 cents, an increase of 1 cent on last year’s total dividend. I am also
$428.9 million. pleased to report that the fi nal dividend will be fully franked. For the
forseeable future, we anticipate that dividends will be fully franked.
This underlying result would have reached our original
expectations were it not for an unusual set of weather events
which happened across eastern and southern Australia in late Strategy
January and early February.
The Board remains committed to AGL’s vertical integration strategy
Subsequently, the Board commissioned a review of AGL’s electricity and its potential to create value from developing our depth and
hedging policies and procedures to consider whether there were reach in Australian electricity and gas markets.
actions that could reasonably have been taken to reduce the fi nancial
Encouraging progress has been made against the milestones on this
consequences of these events. That review confi rmed that the
strategic journey. I did however just want to comment on one high
weather events in late January and early February were very unusual
profi le strategic opportunity AGL did not fi nally pursue. The partial
and statistically would only be expected to occur very infrequently.
privatisation of the New South Wales electricity industry was a
While AGL could theoretically have put in place additional hedging
complex process but did eventually offer a potential opportunity to
cover, the cost of doing so would have far outweighed the
quickly increase AGL’s electricity market share in New South Wales.
occasional losses suffered in such unusual circumstances. Most
importantly the review confi rmed that AGL’s hedging policies and From the outset of the acquisition process, your Board and
procedures are appropriately designed and implemented. management were determined that any acquisition had to be value
accretive. This discipline is critical if we are to succeed in improving
our average return on funds employed.