The AGL (ASX:AGL) share price is down 38% so far in 2021. Here's why

AGL shares are having a year to forget.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The AGL Energy Limited (ASX: AGL) share price is having a year to forget. At close of trade of Friday, shares in the energy producer were selling for $7.46. While that's up 3.9% on the previous close, it's down 1.84% over 2 days and an almost unbelievable 38.5% in 2021.

Just for context, the S&P/ASX 200 Index (ASX: XJO) is up 14.1% this year. In other words, the AGL share price is underperforming the benchmark index by a whopping 52.6 percentage points.

Let's take a closer look to see what's going on.

Sad looking worker standing next to an oil drill.

Image source: Getty Images

AGL's FY21 results

For the full financial year, AGL Energy declared a statutory loss of over $2 billion but an underlying profit of $537 million. The underlying figure is down 33.5% on the prior corresponding period.

Not only did profits fall, but most other financial indicators too. For example:

  • Revenues decreased 10% on the pcp to $10.9 billion.
  • Underlying earnings per share (EPS) dropped 31.6% to 86.2 cents.
  • Net operating cash outflow before significant items was $870 million – a 35% drop.
  • The full year dividend of 75 cents per share (41 cents interim + 35 cents final) is down 23.5% on the pcp for a yield of 10.1% on the current AGL share price.

AGL Managing Director and CEO, Graeme Hunt, said the impacts of the pandemic and longer-term trends were hurting the company:

"Our FY21 result reflects a challenging year for AGL Energy as we realised the impact of lower wholesale electricity prices, reduced electricity generation output at peak periods, and the roll-off of legacy supply contracts in Wholesale Gas."

"Although wholesale electricity prices have rallied in recent months, our result reflected the impact over the past two years of increasing generation supply and lower demand arising from the COVID-19 pandemic and milder weather."

What else has hit the AGL share price

As Motley Fool has previously reported, there have been several significant items that have hit AGL shares.

For example, on 30 June AGL announced plans to demerge into two businesses, both listed on the ASX. Accel Energy would focus on low-carbon energy production while AGL Australia's remit will pertain to multiple energy products as well as energy trading, storage, and supply. The AGL share price slumped on this news.

Management expects the demerger to be completed by the fourth quarter of FY22.

As well, there were multiple updates relating to the company's current and proposed work sites, including Crib PointLoy Yang, the Portland smelter, and Liddell.

AGL share price snapshot

While the last 7 and half months have been challenging for the AGL share price, the last 12 have been more so. Over 52 weeks, AGL shares have collapsed 51.4%.

Not only is AGL massively underperforming the ASX 200, but it's also underperforming its industrial peers. The S&P/ASX 200 Energy Index (ASX: XEJ) is down 2.66% this year and up 6.31% over the 12 months.

AGL Energy has a market capitalisation of around $4.5 billion.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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.

More on Energy Shares

An elderly man holds his chin in concern as he looks at his laptop screen.
Energy Shares

ASX 200 energy shares lift as pessimism over Iran war deepens

Oil and gas prices have spiked 15% to 18% this week amid ongoing constrained global supply.

Read more »

Oil industry worker climbing up metal construction and smiling.
Energy Shares

Why the Woodside share price has climbed 40% in 2026

Is the rally built to last, or is the easy money already made?

Read more »

An older Asian woman fills up her car with petrol at the service station.
Energy Shares

What key update is fueling Ampol shares today?

Acquisition progress lifts investor enthusiasm.

Read more »

Oil worker giving a thumbs up in an oil field.
Energy Shares

Up more than 300% over a year, this ASX energy share is hitting new highs

A fresh capital raise has investors fired up.

Read more »

A male oil and gas mechanic wearing a white hardhat walks along a steel platform above a series of gas pipes in a gas plant.
Energy Shares

Santos is back in focus. Here's why the shares are pushing higher today

Santos shares rise as its solid quarter keeps growth plans on track.

Read more »

A male oil and gas mechanic wearing a white hardhat walks along a steel platform above a series of gas pipes in a gas plant.
Energy Shares

Santos Q1 2026: Higher revenue, project ramp-up, steady guidance

Santos lifted revenue and production in the March quarter 2026, with major project progress and guidance reaffirmed.

Read more »

Woman refuelling the gas tank at fuel pump.
Energy Shares

Ampol's final ACCC remedy brings EG Australia acquisition closer

Ampol has updated its ACCC submission, now offering 41 sites for divestment to progress the EG Australia acquisition.

Read more »

A woman wearing green flexes her bicep.
Energy Shares

Genesis Energy upgrades FY26 guidance on strong Q3 earnings

Genesis Energy lifts FY26 guidance as Q3 sees strong hydro production, improved unit economics, and ongoing renewable energy investments.

Read more »