Ausnet Services Ltd shares sink lower on FY18 results

Victoria-based electricity and gas company Ausnet Services Ltd (ASX: AST) released its FY18 result on Monday, posting net profit after tax up 14% on the previous year to $291 million.

All key financial metrics improved: EBITDA grew 6% to $1.14 billion, and cash flow from operations increased nearly 20% to $886 million.

Ausnet’s main source of revenue, electricity distribution, performed well, with earnings up 15% thanks to higher customer contributions and lower operating costs.

The company refocused its commercial energy services division, which provides metering and energy data solutions to the utility and infrastructure sectors, moving away from low-margin maintenance services. This resulted in a 7% decline in the segment’s revenue, but ensured a 29% EBITDA margin, up 9% on FY17.

On the downside, the electricity transmission and gas distribution divisions saw a marginal decline in earnings.

The result failed to impress investors, and the stock closed 1% down to $1.72.

However, it was enough for the company to increase its total dividend by 5% to 9.25 cents per share. For FY19, Ausnet expects to increase its dividend to 9.72 cents per share, franked between 40% and 50%, resulting in a grossed up dividend yield of around 6.7% at the current share price.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.