On Tuesday, AGL Energy Ltd announced plans to cease its residential solar installation services, consequently recording losses amounting to $47 million in closure and write-down costs.
According to the Australian utility company, the process of installing residential solar PV systems was a “non-core” business and hence, had to be trimmed.
In a statement to the ASX, the giant energy producer promised to continue offering solar energy plans and rooftop installation facilities to households through selected third-party companies.
Consequently, the company will incur a pre-tax loss of around $47 million (approximately USD 33.4 million / EUR 28.8 million) from inventory and systems investments, goodwill write-down and other business closure overheads. The company will recognise the loss in its interim financial report.
In line with its strategy to divest non-core assets, AGL revealed that it had concluded the sale of 18 small production operations including biogas, landfill gas, cogeneration plants and biomass generation at a generous $52 million pre-tax gain that will also be captured in the company’s half-year results.
AGL Energy is also in search of a new Chief Executive to replace the outgoing Andy Vesey who resigned last month to the surprise of many, after serving four years in the position.
While briefing AAP, an AGL spokesman said they were in no hurry to replace the ex-Chief Executive Officer and were taking their time.
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The company will be facing its investors during their forthcoming annual general meeting scheduled for September 26, in Melbourne.
Mr Vesey will remain at the company in the capacity of advisor to the board until December 31.
Meanwhile, Brett Redman, AGL’s Chief Financial Officer has assumed responsibility as the company’s interim CEO.
AGL Energy was the first of the major electricity retailers to enter a residential solar installation business in 2015.
(AUD 1.0 = USD 0.710/EUR 0.613)
Shares in AGL increased by 2.5 cents, approximately 0.1% at $19.735 at 1440 AEST