* FY2014 net profit A$562 mln vs A$585 mln
* Launches A$1.2 bln rights issue to buy power stations
* Sees sales increasing as LNG exports start (Adds details on earnings and rights issue, CEO comments)
By Byron Kaye
SYDNEY, Aug 20 (Reuters) - AGL Energy Ltd, Australia's No. 2 gas and electricity retailer by sales, on Wednesday booked a 3.9 percent fall in annual net profit as a warmer-than-expected winter hit energy demand.
Underlying net profit came in at A$562 million ($522.66 million) for the year to June 30, in line with the guidance it gave last month, compared with A$585 million the previous year. Underlying profit excludes gains from revaluing financial instruments.
AGL also launched an A$1.23 billion renounceable rights issue to help pay for its A$1.5 billion acquisition of two New South Wales state-owned power stations.
Under the offer, AGL will issue new shares for A$11.00, a 23.3 percent discount to the stock's last closing price of A$14.68. AGL's shares were in a trading halt on Wednesday as it kicked off the sale of the new shares.
Australian energy retailers are diversifying as consumers use less energy to avoid paying increasingly high power bills. AGL says buying MacGen will nearly double its generation capacity and give it exposure to more of the Australian market as the country exports more of its energy.
AGL Chief Executive Officer Michael Fraser told Reuters consumer demand for energy was falling but "on the supply side, that has been distorted" by renewable energy firms boosting production to get government rebates, and by a supply glut caused by delays in exporting Australian liquefied natural gas.
AGL in a statement on Wednesday repeated its warning from last month that the government's move to repeal a carbon tax would cut its earnings by A$186 million in the current financial year because of lost subsidies.
For the 2014 financial year, AGL said revenue fell 1.8 percent. Statutory net profit including A$290 million in significant items the previous year, jumped 52 percent.
AGL declared a final dividend of A$0.33, unchanged from the previous year.
(1 US dollar = 1.0753 Australian dollar) (Reporting by Byron Kaye; Editing by Jan Paschal)