One of the ASX's largest energy generators and retailers, AGL Energy Limited (ASX: AGL), is set to give investors a look at its books when it reports its full-year earnings for FY2021 this Thursday. But for any investors anxious to see how AGL's going, a look at the recent (and not so recent) performance of this company might have to do until then.
This Monday AGL shares are, at the time of writing, starting the earnings week off on the wrong foot. The AGL share price is currently down 0.47% to $7.42 a share. That's decidedly in the lower end of the company's 52-week price range of $7.15-$17.16 a share.
As you might have gathered, the past year has not been kind to this energy company. Yes, almost exactly a year ago today, AGL was sitting at over $17 a share. This means that it has since lost a nasty 56.5% of its value since. That's going off of today's share price. Year to date, AGL is also down around 38.8%. And is just a few percentage points off of its 52-week low of $7.15 that we saw at the end of last month.
Zooming out a little, and the true impact of these levels becomes apparent. At $7.41 a share, AGL is currently trading at levels that ASX investors haven't seen since way back in 2004. Early 2004.
AGL last peaked at more than $27 a share, but that was back in May 2017. The company has now lost more than 72% of its value against those levels on today's pricing.
Image source: Getty Images
What's gone wrong here?
What has caused such a devastating reevaluation of this company's value? Well, we can put it down to a few factors. First are ethical and environmental (environmental, social and corporate governance, or ESG) concerns. Since AGL is one of the largest employers of coal-fired electricity generation in Australia, the company has been faced with ESG concerns voiced by ethically-conscious investors over the past few years.
Indeed, many commentators have cited these concerns as a potential reason behind AGL's plans to split its company in two by the end of this financial year (FY2022). The company is planning on separating its generation assets and its retail assets into two separate entities. It plans to do this by 'demerging' its generation assets into a new company to be called 'Accel Energy'.
However, investors have also given these plans a lukewarm reception (putting it kindly). Since the announcement in late June, AGL shares have slumped even lower, losing close to 20% since the news was announced. This may have been exacerbated by the company's announcement that it intends to ditch its previously-flagged new new dividend policy. This involved AGL paying out 100% of its earnings as dividends until FY2023 due to the demerger.
Finally, AGL has also been battered by the deteriorating business conditions of the national wholesale electricity market in which it operates. Back in June, AGL told the markets that it now expects its FY2021 numbers to come in at the lower end of its previous guidance range ($1.58 billion–1.84 billion). It told investors to expect a "material step-down in earnings" over FY2022 as well. That was due to "the lower wholesale electricity prices of the last 2 years now being realised".
About the AGL share price
No doubt AGL's shareholders will be hoping for some better news this Thursday. At the current AGL share price, the company has a market capitalisation of $4.64 billion and a trailing dividend yield of 11.07%.
