AGL share price sinks following 55% profit dive

AGL's accelerated decarbonisation plans are coming with a hefty price tag.

| More on:
A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.

Image source: Getty Images

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

Key points

  • The AGL share price tumbles on the company’s half-year results
  • Underlying NPAT fell 55% year on year
  • The 8 cents per share interim dividend for 1H23 is half what the energy provider paid out in 1H22

The AGL Energy Ltd (ASX: AGL) share price is down 7.3% in early trade on Thursday.

Shares in the S&P/ASX 200 Index (ASX: XJO) energy provider closed yesterday at $7.94 a share and are currently trading for $7.36 apiece.

This comes after the company reported a steep fall in earnings and profits for the first half of 2023 covering the six months to 31 December (1H23).

AGL share price sinks as profits plummet

The AGL share price is tumbling after the company reported underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $604 million, down 16% from 1H22.

Underlying net profit after tax (NPAT) tumbled a precipitous 55% from the prior corresponding half-year, to $87 million.

The energy provider reported a statutory loss after tax of $1.1 billion. That figure includes $706 million of impairment charges (post-tax) from the company's accelerated decarbonisation plans.

The board declared an interim unfranked dividend of 8 cents per share. That's down 50% from the interim dividend of 16 cents per share paid out for 1H22.

On a more positive note, AGL saw its total customer services notch up by 61,000 from the prior corresponding half year, to 4.3 million.

What did management say?

Commenting on the results sending the AGL share price lower today, CEO Damien Nicks said:

Our first half result reflects the impact of plant outages during challenging energy market conditions in July, the prolonged Loy Yang Unit 2 major outage caused by a generator rotor defect, and the closure of Liddell Unit 3 in April 2022, as we indicated in our FY23 financial guidance update in late-September 2022.

On the sustainability front, Nicks said, "The planned closure of the Liddell Power Station in April 2023 will be the next key milestone of [AGL's] accelerated decarbonisation pathway, reducing AGL's annual greenhouse gas emissions by approximately eight million tonnes per annum."

What's next?

The AGL share price also isn't receiving any tailwinds today after the company reduced the top end of its guidance.

The company's new guidance for underlying EBITDA is between $1.25 and $1.38 billion, while the previous guidance was between $1.15 and $1.45 billion.

Guidance for underlying NPAT is now between $200 and $280 million, while the previous guidance was between $200 and $320 million.

"We expect to have higher earnings in the second half of FY23, in line with guidance, and continued positive momentum into FY24," Nicks said.

AGL share price snapshot

As you can see in the chart below, today's selling action has seen the AGL share price dip into the red for the past 12-month period, down 2%.

Motley Fool contributor Bernd Struben 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 Scott Phillips.

More on Earnings Results

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Earnings Results

ASX 200 stock jumps 10% on strong FY24 results

How did this KFC restaurant operator perform in FY 2024?

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Consumer Staples & Discretionary Shares

Guess which ASX 200 stock just slashed its final dividend by 23%

This retailer had a tough time during the 12 months. Here's how it performed.

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »