The AGL Energy Limited (ASX: AGL) share price has had a tough year on the ASX.
Having started 2021 with its shares trading for $12.12, the AGL share price is now $7.45. That's a year to date fall of 38.49%.
But that could be able to turn around – or worsen – as the market prepares to receive AGL's full year results on 12 August.
Here are some of the main points investors might want to look for in the embattled energy provider's annual results.
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What news might affect the AGL share price?
Recently, the AGL share price has been reacting to two main happenings.
The first is wholesale energy prices and the second is the company's plan to split.
Energy prices
The AGL share price will likely react to news of how energy prices have harmed or boosted the company's bottom line over the financial year just been.
In the company's half year results, it noted decreasing wholesale energy prices reduced its profits.
AGL said energy prices were falling as a response to policies designed to see more electricity generation technology built in Australia, as well as lower technology costs.
Additionally, the company said COVID-19 had seen consumers' electricity use decrease substantially.
If wholesale energy prices have continued to drop or trended sideways, the AGL share price could be in for another bout of pain.
Demerger plan
The AGL share price has been turbulent since the company announced its plans to split, and more news on the matter is just what many investors are waiting for.
The company has only released two announcements on the demerger, and both have failed to satisfy the market's curiosity. You can find The Motley Fool Australia's report on AGL's latest update here.
So far, we know that AGL plans to morph into Accel Energy. Accel energy will take over AGL's electricity generation business, including its coal fired power stations. Then, Accel Energy will split to create AGL Australia, an electricity retailing business.
Both companies will be listed on the ASX. AGL Australia will retain between 15% and 20% of Accel Energy.
AGL Australia will be carbon neutral for scope 1 and 2 emissions, while AGL is seemingly focused on decarbonising Accel Energy's business.
The company plans to have completed the demerger by the end of financial year 2022. However, it hasn't managed to soothe the market's worries.
Some are questioning if AGL has thought about the long-term impacts of demerging its electricity generation business given it will be at the complete mercy of electricity prices as a result.
Others, like the Australasian Centre for Corporate Responsibility (ACCR), have stated the demerger won't do enough to reduce AGL's carbon emissions. In fact, ACCR said AGL has admitted the demerger is an attempt to "delay or avoid rehabilitation".
If AGL was able to boost the market's confidence in its plan, its share price may be rewarded. However, the opposite is also possible.
Earnings
This is a no brainer, but AGL's earnings are definitely one metric that shareholders should keep an eye on. Indeed, the AGL share price will likely be affected by them.
When we last heard news from AGL, the company stated it expects its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) for the 2021 financial year to be at the lower end of its previous guidance (between $1,585 million and $1,845 million).
Additionally, it said it expects to report underlying net profits after tax of between $500 million and $580 million.
All eyes will be on AGL to see if its expectations come true.
AGL share price snapshot
It's been a rough year, but being in the red is nothing new for the AGL share price.
It is currently 55% less than it was this time last year and 63% lower than it was 5 years ago.
Let's see if that can be turned around on 12 August.
