The three months ended 30 September were busy for ASX 200 energy retailer AGL Energy Limited (ASX: AGL) and the company's share price.
The energy giant released its full-year earnings – covering a year in which its planned demerger was dumped following a brutal shareholder campaign – and revealed its pathway forward, complete with $20 billion price tag. On top of that, AGL continued work to restart a damaged unit at Loy Yang A.
All in all, the events of the first quarter of financial year 2022 weighed on the AGL share price. It fell 17% to close the period at $6.84. For comparison, the S&P/ASX 200 Index (ASX: XJO) fell 1.4% in that time.
So, what might the future hold for the embattled 185-year-old power company? Let's take a look.
AGL share price struggles in Q1
The AGL share price suffered a major blow in the first quarter, seemingly instigated by the company's full-year earnings.
Its underlying post-tax profit tumbled 58% year on year to $225 million in financial year 2022. Though, its revenue jumped 21% to $13.2 billion.
The company also waved goodbye to former chair Peter Botten as Patricia McKenzie stepped up to the helm. Botten wasn't alone in hanging up his hat. Former CEO Graeme Hunt walked away from the company at the end of September.
Finally, the company revealed its $20 billion plan to ditch coal by financial year 2035. To do so, it will be investing in new renewable and firming capacity over the coming years.
Speaking of its coal-fired activities, AGL identified a defect in a critical part during testing of its Loy Yang A Unit 2 last month. The generator is now expected to be back online in the coming weeks.
What else might the future hold for AGL?
The company's annual general meeting (AGM) is set to go ahead next month. There, McKenzie might go head to head with major investor Grok Ventures – the investment company of Atlassian Corporation (NASDAQ: TEAM) billionaire Mike Cannon-Brookes.
The AGL chair revealed the company's board won't recommend three of the four candidates Grok nominated to join it last week.
McKenzie reportedly told the Australian Financial Review's Energy & Climate Summit:
This is an independent board of directors and in our opinion we need to have an independent board of directors that represents 100% of the shareholders, and 88% of those are not Grok.
Meanwhile, the company expects to post between $1.25 billion and $1.45 billion of underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) in financial year 2023. It also believes its underlying net profit after tax (NPAT) will come in at $200 million to $320 million.
Marcus Today's Layton Membrey recently tipped AGL as a hold, saying, courtesy of The Bull:
Stronger futures prices are expected to drive higher customer prices and gross margins for an extended period.
At the same time, Morgans is expecting the AGL share price to rise to $8.20, slapping the stock with an outperform rating, my Fool colleague James reports. It's currently trading for $6.90.
