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Narrow-moat AGL Energy has lowered earnings guidance with the Loy Yang A Unit 2 generator fault. The +500 megawatt generator, which produces nearly 10% of Victoria’s power requirements, has been offline since April 15, 2022 due to a rotor fault. We downgrade our fiscal 2022 NPAT forecast by 19% to AUD 251 and our fiscal 2023 NPAT by 3% to AUD 374 as a result of the lost electricity generation volumes, but our long-term forecasts are unchanged.
AGL Energy is one of Australia's largest retailers of electricity and gas. It services 3.7 million retail electricity and gas accounts in the eastern and southern Australian states, or about one third of the market. Profit is dominated by energy generation, underpinned by its low-cost coal-fired generation fleet. Founded in 1837, it is the oldest company on the ASX. Generation capacity comprises a portfolio of peaking, intermediate, and base-load electricity generation plants, with a combined capacity of 10,500 megawatts.
