AGL reported a net profit of $848.3 million for 2004/05, compared to $349.5 million in the previous year.

But the bottom line number was boosted by the sale of its 66.05% stake in NGC Holdings Ltd, for a net profit of $587.5 million, and the underlying net profit was actually $386.8 million.

The underlying result was 6.9% higher than the same period a year earlier.

"The underlying profit result was achieved in a period of intense competition and milder weather conditions which affected the retail business in particular," AGL managing director Greg Martin said.

But the company said that after adjusting for the introduction of new international accounting standards, it expected underlying earnings to decline in 2005/06.

"2005/06 will continue to be a period of transition for AGL, after the divestment of NGC in December 2004 and before moving into 2006/07 where the positive impact of the PNG investments is expected to flow through to earnings," the company said this morning.

"Adjusting for the impact of A-IFRS (Australian - International Financial Reporting Standards), and subject to unforeseen circumstances, forecast underlying profit after tax in 2005/06 is expected to be lower than 2004/05 by 3% to 5%.

"AGL anticipates earnings per share growth of zero to 2% in the current financial year compared to the restated EPS for the 2004/05 financial year."

AGL chairman Mark Johnson said the company would complete the final stage of its $515 million capital management program with a $150 million share buy back by the end of 2005.