AGL Energy Limited (ASX: AGL) shares are surging on Tuesday morning.
At the time of writing, the energy giant's shares are up 8% to $9.58.
This follows the release of a solid first-half result and an update to its full-year earnings guidance.
Image source: Getty Images
AGL shares surge on results day
For the six months ended 31 December 2025, AGL reported flat underlying EBITDA of $1.09 billion and a 6% decline in underlying net profit after tax of $353 million.
At first glance, those numbers look unexciting. But the market response suggests investors were focused more on what comes next than what has already happened.
Guidance narrowed
The biggest positive from today's release was the narrowing of its FY 2026 guidance.
AGL now expects full-year underlying EBITDA of $2.02 billion to $2.18 billion. This compares to its previous range of $1.92 billion to $2.22 billion.
The company's underlying net profit guidance was also tightened to $580 million to $680 million, from a much wider range of $500 million to $700 million.
Management advised that the narrowing of FY 2026 guidance reflects strong first half performance driven by consumer margins, lower than previously indicated operating costs due to disciplined cost management, and lower than previously indicated depreciation due to greater water price certainty on the future rehabilitation of Loy Yang.
Dividend increase
Despite its profit decline during the first half, the AGL board elected to increase its interim dividend.
The company declared a fully franked interim dividend of 24 cents per share, which is up 4.3% from 23 cents per share a year earlier.
This will be paid to eligible shareholders next month on 26 March 2026.
What happened during the half?
Management said its first-half performance was driven by improved customer margins, helped by growth in AGL's customer base and a return to more sustainable pricing conditions.
AGL's managing director and CEO, Damien Nicks, said:
The strength of our first half result was delivered by our excellent operational performance. In Customer Markets we saw an improvement in customer margins, driven by growth in our customer base and a return to more sustainable margins.
The improved availability and flexibility of our generation asset portfolio, including the continued strong performance of our batteries, helped mitigate a period of low price volatility in the NEM, which was driven by milder weather, and lower transmission constraints.
