The AGL Energy Ltd (ASX: AGL) share price is down 2.5% after the company went ex-dividend. However, after excluding the impact of the dividend, AGL shares are up approximately 0.5%. This compares to the S&P/ASX 200 Index (ASX: XJO) being down 0.1%.
The ASX energy share recently reported its FY24 result and declared its final dividend of the 2024 financial year.
Shareholders can be pleased with the payout because they're getting a much bigger payment than last year.
But today isn't the payment date – investors buying AGL shares have missed out on the upcoming dividend.
AGL shares go ex-dividend
Investors who invest in the ASX energy share today won't be entitled to the payout.
The ex-dividend date is 27 August 2024, and the record date is 28 August 2024.
Shareholders are going to receive a dividend payment of 35 cents per share on 24 September 2024, which was a year-over-year increase of 52%. The full-year dividend payout came to 61 cents per share, which was a huge increase of 96.8% year-over-year.
At the current AGL share price, this payout represents a dividend yield of 5.5%.
The company has a policy to target a dividend payout ratio of between 50% and 75% of annual underlying profit after tax. The FY24 final dividend was determined by using a target 50% payout ratio of underlying net profit for the full-year FY24 dividend.
While this latest dividend was unfranked, AGL intends to begin paying partially franked dividends, starting with the FY25 interim dividend.
How did the ASX energy share afford this payout?
The business reported significant profit growth during the FY24 period.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew 63% to $2.2 billion and underlying net profit after tax (NPAT) rose by 189% to $812 million.
AGL said the result was driven by significantly improved energy generation availability and portfolio flexibility, including a solid earnings contribution from the Torrens Island battery in its first nine months of operation.
The company saw more stable market conditions throughout the financial year, along with the impact of "higher wholesale electricity pricing from prior periods being reflected in pricing outcomes, trading and contract positions."
Guidance for FY25
The underlying EBITDA is expected to come between $1.87 billion to $2.17 billion, while underlying net profit is between $530 million to $730 million.
AGL explained that one key factor for this guidance is lower wholesale electricity prices resetting through contract positions and the rollout of heightened volatility from market interventions in June and July 2022.
AGL share price snapshot
The chart below shows that the AGL share price has been up 15% since the beginning of 2024.
