News: AGL UPDATE 1-Australia's AGL Energy flags weaker fiscal 2020, announces buyback

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Aug 8 (Reuters) - Australia's top power producer AGL Energy (AGL) on Thursday flagged weaker earnings for fiscal 2020 as it copes with a unit outage at a power station in Victoria, and announced a share buyback of up to 5% of its issued capital.

The outage at its Loy Yang A power station in Victoria following an electrical short that damaged the generator would impact its full-year earnings by up to A$100 million ($67.66 million), the company said.

AGL now expects profit between A$780 million and A$860 million in fiscal 2020, well below expectations of around A$908 million, according to IBES data from Refinitiv.

The company, which reported a better-than-expected annual underlying profit of A$1.04 billion for the year ended 30 June, also warned of lower wholesale electricity prices and higher coal costs impacting its fiscal 2020 earnings.

AGL in February cut its cost-saving target for the year by half to meet extra spending for its coal fleet, which have struggled to keep up with power demand after a heatwave earlier this year triggered outages and sent electricity prices soaring.

The company had also outlined plans to keep two power plants open for slightly longer than previously flagged to help meet any shortfall in electricity supply over the summer period.

Australia's power retailers have voiced concerns of the government's push to lower power bills by regulating retail prices, saying it could deter new investments in the sector and drive up costs.

The government's move to cap power prices forced AGL to cut prices http//www.agl.com.au/about-agl/media-centre/asx-and-media-releases/2019/june/agl-cuts-electricity-prices-for-victorian-families-and-businesses-on-standing-offers, despite rising input costs.

The company raised its full-year dividend to A$1.19 from A$1.17 a year earlier. Analysts had expected a full-year dividend of A$1.16 per share.

($1 = 1.4782 Australian dollars)