AGL (ASX:AGL) share price crashes 7% to new 20 YEAR LOW!

The energy provider is sinking lower and lower.

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The AGL Energy Limited (ASX: AGL) share price keeps going from bad to worse.

At close of trade on Wednesday, shares in the electricity and gas provider finished at a 20 year low of $5.85, down 7.44% for the day. It sets an astonishing landmark for the company.

While the company hasn’t had any market sensitive announcements recently, something is clearly scaring off investors.

Let’s take a closer look.

AGL is all out of gas

The AGL share price had a brief respite yesterday after news of a new sale agreement with ASX energy company Cooper Energy Ltd (ASX: COE). Besides that, it’s been nothing but bad news for AGL shareholders.

Take, for example, the news on 3 September when AGL was bumped out of the ASX 50. That came on the same day The Motley Fool reported AGL’s dividend yield had increased to 11.7% as its share price further decreased.

This poor run all comes off the back of the company’s FY21 full-year results where:

  • Revenue decreased 10.0% on the prior corresponding period (pcp) to $10.9 billion.
  • Underlying profits fell 33.5% to $537 million on the pcp.
  • 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.

Management called FY21 “a challenging year” for AGL. The CEO blamed lower wholesale electricity prices, reduced electricity generation output at peak periods, and the roll-off of legacy supply contracts in wholesale gas.

What else has been affecting the AGL share price?

On the last day of the financial year, 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 the news.

In June, AGL announced the suspension of its special dividend program in which it planned to pay 25% of underlying profits over the next 2 years.

Finally, 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

Over the past 12 months, the AGL share price has plummeted 59.2%. Year-to-date, its share are down 51.2%. In fact, AGL shares are so low at the moment, the price is 26.1% lower than when it first listed on the market.

AGL Energy has a market capitalisation of around $3.7 billion.

Should you invest $1,000 in AGL right now?

Before you consider AGL, you'll want to hear this.

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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.

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