Company Interview / AGL powers ahead on recharged strategy & telco sale

Key Points:

AGL (ASX:AGL) narrows and lifts earnings guidance for FY26, citing strong customer markets performance $50 million in additional cost reductions by FY27 as part of ongoing productivity initiatives Divestment of telco base to Aussie Broadband (ASX:ABB) to streamline business and enhance partnership Continued investment in renewables and batteries, with a focus on capital efficiency and industry collaboration

AGL (ASX:AGL) has revised its full-year guidance, now expecting underlying earnings to range between $2.02 billion and $2.18 billion, reflecting a slight uplift at the midpoint after a first-half statutory net profit of $94 million. CFO Gary Brown highlights a strong performance in the customer markets division and ongoing cost discipline as key drivers behind this improved outlook. AGL’s ongoing productivity program, which targets both labour and non-labour efficiencies, is forecast to achieve an additional $50 million in cost reductions by FY27.

Brown outlines the company's recent divestment of its telco customer base to Aussie Broadband (ASX:ABB) for $115 million in scrip, which is part of efforts to streamline operations and foster an ongoing partnership focused on delivering market-leading broadband services to customers. This simplification aligns with AGL’s strategy of driving operational efficiency while maintaining customer satisfaction.

AGL’s commitment to renewable energy remains central, with Brown emphasising investments in both batteries and partnerships for renewables. The battery business already shows a $10 million EBITDA uplift from 300MW deployed, and another 1,000MW is under construction. Brown views data centre and AI growth as opportunities, citing prime sites and ongoing discussions with industry players. Funding these ambitions involves strong operating cash flows, capital recycling, and prudent use of debt.