Here’s why the AGL (ASX:AGL) share price is climbing higher today

The AGL Energy Limited (ASX: AGL) share price is climbing higher today following the release of its half-year results for 2021.

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The AGL Energy Limited (ASX: AGL) share price is climbing higher today following the release of its half-year results for 2021.

At the time of writing, shares in the energy company are up 1% to $11.29.

What did AGL announce?

The AGL share price is rising higher this morning despite announcing losses across it’s the entire business.

According to this morning’s release, AGL delivered a dampening performance for H1 FY21 as COVID-19 heavily affected trading conditions.

For the period ending 31 December, the company reported total group revenue of $5,414 million. The result reflected a 14.2% decrease over the prior corresponding period (pcp) due to weak wholesale prices for electricity and renewable energy certificates. In addition, lower gross margins in wholesale gas and increasing costs to support operations during COVID-19 led the fall.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) dropped to $926 million, down 13% compared to H1 FY20. This was due to negative working capital movements with the company’s wholesale electricity market positions.

Underlying net profit after tax (NPAT) also sank to $317 million, representing a decline of 27% on the pcp. The bottom-line end result came from the additional impact of a higher depreciation expense.

Driving the AGL share price in positive territory, the Board declared an unfranked interim dividend of 31 cents along with a special dividend of 10 cents. While this is a reduction on the previous 47 cents per share issued in H1 FY20, investors took this as a positive step. Eligible shareholders will receive payment from AGL on 26 March, 2021.

Outlook

Looking ahead, the company provided guidance for the remaining period of the 2021 financial year.

AGL expects to achieve underlying EBITDA of around $1,585 million to $1,845 million. This takes into account the $80 to $100 million after-tax benefit from its insurance claims over last year’s extended outage at Loy Yang power station.

Furthermore, underlying NPAT is forecasted to be between $500 million and $580 million as per the update given on 21 December 2020.

Operating costs, excluding depreciation and amortisation, are projected to be broadly flat when compared to FY20.

AGL share price snapshot

Over the last 12 months, the AGL share price has continued on a downward trend. The share price has slumped close to 50%. AGL’s shares hit an all-time low of $10.93 this month before slightly rebounding above $11.37 today.

Based on the current AGL share price, the company has a market capitalisation of close to $7 billion.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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