Gas Light profit dims, still no sign of Alinta bid

SYDNEY - The Australian Gas Light Co, the country's biggest power retailer and a takeover target, has posted a 2 per cent fall in first-half net profit due to tough competition and says it still has not received a formal takeover proposal from Alinta.

Sydney-based AGL, the subject of an A$8.9 billion ($9.9 billion) bid from smaller rival Alinta, says it continues to support its own plan to split into separate energy and infrastructure businesses as its best option.

"There is strong logic in the existing de-merger proposal as a means of unlocking shareholder value and separating high-yield and high-growth businesses," said AGL Energy CEO-designate Paul Anthony, who is due to take up his role next month.

Alinta raised its stake in AGL to 19.9 per cent last week, potentially torpedoing AGL's demerger plan, placing Anthony's role in doubt and spending almost all the funds at its disposal to win a powerful voice in takeover talks which could create an energy giant with 3.5 million customers across Australia.

AGL, which traditionally makes more than half its annual profit in the first half due to seasonal factors, made a net profit excluding one-off items of A$234.1 million in the six months ended December 31, down from A$238.8 million a year ago.

The result was ahead of expectations of six analysts polled by Reuters, who on average saw a net profit of A$227.5 million.

"The result is largely in line with expectations," said Jason Maybee at ABN Amro. "Nothing new in terms of the de-merger proposal but we couldn't really expect that as they haven't had the detail to look at as yet."

Excluding the contribution from New Zealand's NGC Holdings - sold in December 2004 - profit from continuing operations was A$234.1 million, up 15.4 per cent on A$202.9 million a year ago.

Alinta's aggressive takeover bid for a competitor three times its size retains AGL's plan to split into two, but would put Alinta in control and add its Western Australian energy assets to AGL's generation and distribution network in the nation's east.

- REUTERS