While still on a lookout for a new CEO, Australia’s biggest power producer AGL Energy has taken a major decision to abandon its residential solar installation operations, describing the business as “non-core“.
The company will consequently sustain a pre-tax loss of around $47 million in goodwill write-down, system investments and inventory, and closure costs.
It will, however, still offer tailored residential solar plans and residential solar installation services to customers through its third-party partners.
In the same statement to the ASX, the company announced it had closed the sale for its portfolio of 18 small-scale power generation sites, which include landfill gas, biogas and biomass generation, and cogeneration plants, at a pre-tax gain of around $52 million.
The trimming of the businesses is said to be part of the energy producer’s strategy of divesting in non-core assets. Both transactions will be recognized in AGL’s financial statement for the second half of 2018.
Overall, it has been a busy year for AGL with many big announcements.
Last month, AGL reported its full year profit almost trebled, and its underlying profit rose by nearly a third, but also issued a warning it expected almost no profit growth this year, with wholesale prices dropping and a retail war persisting.
In the days to follow, to the surprise of many, the power company eased out its chief executive Andy Vesey and appointed long time Chief Financial Officer Brett Redman to the top job on an interim basis.
Vesey was a fierce advocate of the closure of the 1,800 MW Liddel coal plant, which put him on a collision course with the federal government.
His plan was to transform the site into an integrated renewables hub – comprising renewable generation, batteries, gas and demand response – instead of extending the power station’s life for several more years beyond its scheduled closure in 2022, as suggested by the Federal Coalition.
These plans were in line with the Australian Energy Market Operator (AEMO) 2018 Electricity Statement of Opportunities, which came out after Vesey’s departure, warning against a heightened risk of power outages due to reduced reliability of aging fossil fuel generators.
Now, AGL will face investors at its annual meeting in Melbourne on September 26.
Its shares closed down at $19.53 on Wednesday, with 0.66% drop from the previous close.