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MELBOURNE - Power retailer AGL Energy has dumped managing director Paul Anthony after the company's dramatic earnings downgrade last week.
AGL has appointed its former general manger of merchant energy, 50-year old Michael Fraser, to take over the top job.
Australia's largest power retailer slashed its earnings outlook
for fiscal 2008 to between A$330 million ($397 million) and A$360 million, from a forecast of A$380 million to A$400 million.
The power group blamed "recent market conditions", including a strengthening Australian dollar and reduced retail energy margins, for the downgrade.
AGL chairman Mark Johnson yesterday said it was "highly unlikely" further cuts would be made to the earnings forecast.
The company is undertaking a review of its business assumptions and operations, including a review of earnings outlook for future years.
"The circumstances leading up to and surrounding the revised earnings guidance announced last week and other factors, have contributed to the directors' view that now is the right time for a new management approach, with strengthened focus on our core operations," Johnson said.
Anthony joined AGL in April 2006, after working with UK investment house Doughty Hanson.
During his time at the helm, he presided over a $6 billion asset swap with Alinta, the acquisition of Powerdirect Australia and the purchase of a cornerstone stake in Queensland Gas.
In January, AGL's share price hit a 12-month high after Anthony tried to entice rival power retailer Origin Energy into merger talks.
AGL's advances were eventually rebuffed.
Johnson declined to comment on the progress of the AlintaAGL transaction, saying: "That's a decision for the future."
The retail business was a joint venture between Alinta and AGL, and was created through last year's asset swap.
The takeover of Alinta by a consortium led by Babcock & Brown and Singapore Power International has triggered an option for AGL to acquire the 67 per cent of the energy retailer it doesn't own.
Johnson yesterday backed Anthony's aggressive acquisition strategy when asked whether the value of company was compromised through some of the purchases.
"This is a highly capital intensive, very long term business, so periodically you have to make very big bets, which you're going to have to live with for a long time," Johnson told journalists.
Johnson said Anthony agreed after discussions over the weekend, that, having achieved much of what he was asked to do, it was an appropriate time for a change in management.
Fraser said there were many more opportunities ahead for the company.
"My immediate task is to lead and complete the business assumptions and operations review we announced last week and report on progress at the company's AGM on 8 November 2007," he said.
Fraser has more than 20 years' experience in the energy industry.
AGL shares dipped 6c to A$12.99.
- AAP
