Key points
- Plenty of eyes will be on AGL shares on Thursday when the company releases its report for the first half of financial year 2022
- Previously, the company has given guidance for the whole of financial year 2022. It included EBITDA between $1.2 billion and $1.4 billion and NPAT of $220 million to $340 million
- Its upcoming demerger could also prove to be a key issue next week
Next week could be a big one for the AGL Energy Limited (ASX: AGL) share price as the company is set to drop its results for the first half of financial year 2022 (FY22).
AGL's half year results will be released to the ASX on Thursday morning. It will be the first time investors get a chance to compare its FY22 performance to its previously-given guidance.
At the time of writing, the AGL share price is $7.24, 0.56% higher than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.1%.
Let's take a look at what might be the key talking points within the energy provider's report.
Could this drive the AGL share price next week?
The AGL share price could be in for a shakeup on Thursday. The market is preparing to learn if it's on track to hit its FY22 guidance.
The company's results for FY21 saw a 10% downturn in profits – they came to $10.9 billion. Meanwhile, its full year dividends dropped 23.5% to hit 75 cents.
Its earnings before tax, interest, depreciation, and amortisation (EBITDA) came to approximately $1.67 billion. Finally, its underlying profit after tax reached $537 million.
The dip was due to lower wholesale electricity prices, reduced electricity generation output, and the roll-off of legacy supply contracts in wholesale gas.
Though, it expects this financial year to be worse. Thus, plenty of eyes will be on AGL's shares next week.
The company's guidance predicted FY22 would bring underlying EBITDA of between $1.2 billion and $1.4 billion and net profit after tax of $220 million to $340 million.
AGL also expected to drop its operating costs by $150 million this financial year compared to that of FY20. The company stated:
These ranges reflect a further material step down in wholesale electricity earnings as hedging positions when wholesale prices were higher progressively roll off and a small impact to wholesale gas gross margin from the roll off of legacy gas supply contracts…
AGL Energy looks to FY22 with cautious optimism, the wholesale prices of our key commodities have improved and AGL Energy operates some of the lowest cost generation in the National Electricity Market.
Of course, next week's release will only cover the first half of FY22. Still, it will show how AGL is tracking against its full year guidance.
What else might be worth looking for when AGL reports?
It could also be worth keeping an eye out for word of AGL's planned demerger and its carbon footprint in its half year report.
AGL is aiming to split into two in the coming half. Though, the market hasn't heard any updates on its plan in more than 6 months. Thus, it's likely that market watchers are hungry for news on what to expect in the fourth quarter of FY22.
Previously, the AGL share price fell 9.9% on news that the company is to be renamed Accel Energy. Accel Energy will then split off a new entity, AGL Australia.
Accell Energy will be charged with the company's energy generation business while AGL Australia will take over its retail businesses.
Word on that front could have the potential to bolster or pummel the AGL share price next week.
Additionally, the company is seemingly under constant pressure to lower its carbon emissions.
While it has a number of environmentally-friendly initiatives under its belt, its coal-fired power generation means that it's Australia's highest emitting entity.
It's likely some will be watching AGL's results for news that might see it reducing its emissions.
