Here’s why AGL shares are trading at less than half the last year levels

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Here’s why AGL shares are trading at less than half the last year levels

 Here’s why AGL shares are trading at less than half the last year levels
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Highlights 

  • Shares of AGL Energy (ASX:AGL) dropped more than half in the last one year.
  • The company has recorded a statutory loss of AU$2,058 million in FY21.
  • AGL is one of the biggest polluters of Australia, and intends to split into a carbon-neutral energy retailer and a bulk power generator by June 2022.

Source: © Transversospinales | Megapixl.com

Shares of one of the leading energy companies of Australia, AGL Energy (ASX:AGL), slumped more than 55% in the last one year. The performance of the wholesale energy contractor has not been up to the mark since 2017 when the shares of the company touched an all-time high.

The shares declined in August too, with prices plummeting significantly by 9.27%. in the last 30 days. Even the retail energy provider was unable to impress the investors with its FY21 earnings, released on 12 August 2021.   

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Let's have a look at few of the key highlights of FY21:

  • AGL recorded a statutory loss of AU$2,058 million during the period.
  • Underlying profit after tax attributed to shareholders was ~33.5% down in the financial year and landed at AU$537 million.
  • The energy player declared a full-year dividend of 75 cents per share, a significant drop of 23.5% from the previous corresponding period.

Related Article: Why AGL Energy (ASX:AGL) witnessed a 34% dip in FY21 underlying profits

Why AGL shares are tumbling?

Shares of the company tumbled more than half in the last one year. After starting the year’s trading at around AU$14.65, the shares are currently trading at AU$6.53 per share as of Monday.

Source: © Ncn18 | Megapixl.com

AGL is amongst the biggest polluters in the country. It uses coal-fed power plants to generate electricity, releasing a substantial amount of greenhouse gases into the atmosphere. 

Towards the end of June 2021, AGL decided to split into a carbon-neutral energy retailer and a bulk power generator by June 2022. However, investors didn’t support the company’s plan, sending shares of the company to fall by 10% on the same day. The company also announced the dividend cut, which further dropped the company’s shares by 4%.

Good Read: AGL shares drop on CEO’s resignation

AGL decided to rebrand itself as Accel Energy Limited, holding the company's coal-fired power plants, and AGL Australia Limited to emerge as the country’s biggest retailer of gas and electricity.

The country's biggest power producer first announced its plan to split in March, after the share price of the company more than halved due to sliding wholesale power prices and the government's pressure to reduce retail prices.

Moreover, with the rising interest of investors towards the companies and a robust and convincing ESG strategy and performance ratings, a move for sustainable development has also impacted the share prices of AGL.

Must Watch: Is AGL (ASX:AGL) A Good Dividend Stock?

Bottom Line

The share of AGL Energy plummeted significantly in the last one year as the investors gave a thumbs down to the company’s plan to split its business and rising concerns for sustainable development.

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