The AGL Energy Limited (ASX: AGL) share price had a roaring month in April despite a major fault at the company’s Loy Yang A power station.
Fortunately, there was plenty of good news to balance out the bad from the energy producer and retailer.
The AGL share price ended last month trading at $8.68, 12.44% higher than it was at the final close of March.
For comparison, the S&P/ASX 200 Index (ASX: XJO) slipped 0.86% over the course of April.
Let’s take a closer look at what boosted sentiment for the previously embattled ASX 200 share last month.
Why did the AGL share price outperform in April?
The AGL share price outperformed the ASX 200 by nearly 12% last month despite only releasing unfortunate news to the market.
The company’s major coal-fired power station, Loy Yang A, experienced an electrical fault resulting in one of its units being shut down. The company warned the outage could continue until August.
Some brokers predict the incident could bring a $70 million dint to AGL’s earnings and force the company to buy energy from the pool — a costly exercise in 2022.
The AGL share price tumbled 3% on the back of the news.
Luckily, there was plenty of good, non-price-sensitive news to bolster sentiment in the company in April.
It announced it was shutting down one of four units at its Liddell coal-fired power station early last month. It’s the first step towards closing the station completely next year.
Finally, AGL announced last week it will be acquiring biogas plant provider Energy360.
The energy giant believes the acquisition will help it provide high-emissions businesses with sustainable energy solutions.
Of course, May so far has been rocky for AGL and its share price. On top of that, the market’s expecting to hear more news from the company in coming weeks.
It’s set to provide additional details on its upcoming demerger – despite increasing pressure on shareholders to vote against the plan – in mid-May.
Today, AGL boss Graeme Hunt hit back at tech billionaire Mike Cannon-Brookes’ criticism of the demerger, labelling some of the claims being made against the plan as “false”.
The post Here’s why the AGL share price was cooking with gas in April appeared first on The Motley Fool Australia.
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Motley Fool contributor Brooke Cooper 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.
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