AGL Energy Limited's (ASX: AGL) stock is gaining today despite the company's chair stating its share price's recent performance is "not acceptable".
AGL's chair Peter Botten made the comments at the company's annual general meeting (AGM) today. There, he acknowledged financial year 2021 was "extremely challenging" for AGL and "very disappointing" for its shareholders.
On a more positive note, the board managed to avoid a spill as more than 75% of shareholders voted in favour of AGL's remuneration resolution.
Botten put the company's poor performance down to low wholesale electricity prices and increasing demand for decarbonisation.
Despite the chair's unenthusiastic address, the company's share price is in the green.
At the time of writing, the AGL share price is $5.71, 3.53% higher than its previous close.
Let's take a closer look at AGL's AGM.
Here's what happened at AGL's AGM
The AGL share price has climbed following the boss's acknowledgment of its poor performance.
Over the course of financial year 2021, the AGL share price fell a massive 59%.
According to the company's chair, the company's struggles have resulted from operating and market headwinds.
Such challenges were supposedly identified by the company years before. However, their impact was miscalculated before being worsened by COVID-19 and mild weather.
Additionally, Botton stated the transition to decarbonisation hit the AGL share price hard as the company's position as Australia's largest carbon emitter weighed on the market.
As a result, AGL is planning to "lean harder" towards renewable energy.
Botton also reconfirmed the company's outlook for the current financial year. It expects to see earnings of between $220 million and $340 million – a "material reduction" on that of financial year 2021.
The company's CEO Graham Hunt outlined the company's plans to change the running of its coal-fired power plants.
Hunt stated AGL will be creating more of its coal-fired power when demand is at its highest. This will allow for more downtime.
It also plans to undergo its much-anticipated demerger in the new year.
Botton noted the support for a motion to force the company to provide emissions reductions in line with the Paris Agreement. However, the motion didn't manage to get to a vote.
Because of the demand, Botton reiterated AGL will provide emissions reduction targets before the demerger occurs, saying:
The success and speed of the transition [towards decarbonisation] will require an effective level of coordination between government, regulators and industry and the board does not believe it is in the best interests of AGL to make this commitment unilaterally.
The task is to create a glide path rather than a crash landing.
AGL share price snapshot
The AGL share price hasn't rebounded from its dramatic drop in financial year 2021.
It is still 52% lower than it was at the start of 2021. It has also fallen 20% over the last month.
