AGL Energy Limited · ASX:AGL
AGL Energy — Investor Day (October 2004)
12 slides from AGL Energy's investor day presentation, October 2004
Slide 1: Finance – Investor Day Presentation
Finance Investor Day Presentation Greg Hayes, Chief Financial Officer
Slide 2: Contents
CONTENTS • AGL Finance Structure • NGC Sale • Capital Management • The impact of IFRS on AGL 2
Slide 3: AGL Finance Structure
AGL FINANCE STRUCTURE C.F.O. P.A. GM - Group GM Finance GM - Group GM - GM - GM - Strategic - Corporate Strategic Mergers & Financial Investor Risk Planning Acquisitions Services Relations & Financial Projects Treasury Taxation Insurance GM GM Finance Finance - ES&M - Agility 3
Slide 4: NGC
NGC • Progress On The Sale Process ¾ Special dividend of 9 cps announced • Paid on 3rd November 2004 ¾ Takeovers Panel exemption request lodged • Expected 3 - 6 weeks ¾ Commerce Commission clearance application lodged • Expected 4 - 6 weeks ¾ Takeover Offer • 14 days after Notice of Offer to NGC • M
Slide 5: NGC Sale Outcomes
NGC SALE OUTCOMES • Preliminary Profit and Cashflow impact NGC Sale Profit Cash $'000 $'000 Proceeds 799.0 799.0 Less: Taxation (37.2) (37.2) Less: Transaction costs (4.7) (4.7) Net Proceeds 757.1 757.1 Cost Base (217.1) 0.0 Net Profit 540.0 757.1 5
Slide 6: AGL Taxation Issues - Tax on NGC Sale
AGL TAXATION ISSUES - TAX ON NGC SALE ¾ Final tax position yet to be established ¾ New CGT rules for disposals of foreign assets - effective 1 April 2004 ¾ Any tax payable due December 2005 6
Slide 7: Capital Management Alternatives
CAPITAL MANAGEMENT ALTERNATIVES ¾ Alternatives Considered – Share buy back • On-Market • Off-Market – Capital Return – Special Dividend – Increase in Payout ratio ¾ Franking 7
Slide 8: AGL Taxation Issues - Franking
AGL TAXATION ISSUES - FRANKING ¾ 2003 62% ¾ 2004 75% ¾ 2005 90% (target) ¾ 2006 100% (target) Why not yet at full franking? ¾ High payout ratios ¾ Non-Australian source income ¾ Australian sourced borrowing ¾ Timing differences ¾ Lagged tax payments 8
Slide 9: AGL Taxation Issues - Future Franking Growth
AGL TAXATION ISSUES - FUTURE FRANKING GROWTH ¾ Should increase due to: – Increase in proportion of Australian sourced income. Retained share of NGC cash will result in substitution of Australian taxable income (i.e lower interest deductions) for NZ income – Reduction in impact of timing differences
Slide 10: The Impact of IFRS on AGL
THE IMPACT OF IFRS ON AGL ¾ Effective Date of 1/7/05 - Comparatives from 1/7/04 except for AASB 139 ¾ First IFRS Report is December ‘05 ¾ Key issues – Key Standards – Volatility of earnings – Keeping the market informed during the transition – Predicting the outcome – AGL will provide detailed recon
Slide 11: The Impact of IFRS on AGL (contd)
THE IMPACT OF IFRS ON AGL (CONTD) • What will AGL provide the market to track the transition? ¾ Full reconciliation of all equity balances ¾ Full reconciliation of profit ¾ reconciliation from current GAAP to IFRS Refer attached draft possible alternative 11
Slide 12: The Impact on AGL from IFRS (contd)
THE IMPACT ON AGL FROM IFRS (CONTD) Draft Reconciliation of Profit or Loss for the Half-Year ended 31 December 2005 Aust IFRSs Previous GAAP Half-year Half-year ended Effect of ended 31 31 Dec 2005 transition Dec 2005 Note $’000 $’000 $’000 Revenue Expenses Profit from operations Share of net profit