AGL earnings preview: why are earnings expected to be lower?
AGL has had a roller coaster of a year as a proposed de-merger was dramatically scrapped in May and was soon followed by difficult conditions in the national electricity market.
AGL Energy Limited (ASX: AGL) release date:
AGL Energy Ltd is expected to release its earnings report on Friday, August 19, 2022.
AGL Energy Limited earnings expectation:
- EPS: 0.368
- DPS: 0.216
AGL Energy Limited updated its earnings guidance for the 21/22 financial year in May as follows:
- Underlying EBITDA for FY22 to be between $1,230 and $1,300 million
- Underlying Profit profit after tax for FY22 to be between $220 and $270 million
AGL Energy Limited earnings key watch:
AGL has had an eventful year as a proposed de-merger was dramatically scrapped in May and unstable electrical prices in the national electricity market made market conditions difficult.
In the first half of the financial year, AGL’s lower earnings had already raised a red flag for the FY22 results as the underlying EBITDA was down 21% to $723 million while the underlying NPAT was down 41%. For the second half of the year, earnings are expected to be even lower due to increased capacity costs to cover periods of peak electricity demand which are higher in the summer months.
After a turbulent year, investors urgently require a clear road map for the earnings outlook. The imminent challenge for AGL is to refresh its board with a new chief executive. Hopefully the new leadership will be able to clear the mess and settle a new direction after the abortion of demerging.
AGL’s dividend will be another key focus for this reporting season as AGL paid an interim dividend of 16 cents per share in the first half of the financial year, a reduction from the 41 cents per share from the previous year. If AGL pays out a dividend of 16 cents for FY22, it would be the first decrease by almost 60%, the lowest level in five years.
Share price and technical analysis
By the end of August 12, the price of AGL seems to have found support from the intersection of the 20- and 100-days moving average around the early July high ($8.44). As it reverses course ahead of the June peak ($8.656), the successful attempts to beak level could open the door to the year-high region. On the flip side, a breakthrough in the supporting trend line may pull the price back to the $8.28 level.
AGL Energy Limited daily chart
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