September is generally a rough month for markets, and it was no different in 2022. The S&P/ASX 200 Index (ASX: XJO) slumped 7% last month and the AGL Energy Limited (ASX: AGL) share price put on an even worse performance.
There was plenty of news from the energy producer and retailer in that time. And it all came to a head on Thursday when the company announced its $20 billion plan to ditch coal by 2035.
The AGL share price closed the final session of September at $6.84, 10.9% lower than it finished August.
The ASX 200 dumped 7% in that time while the S&P/ASX 200 Utilities Index (ASX: XUJ) slumped 15%.
So, what went wrong for the AGL share price last month? Let’s take a look.
What weighed on AGL’s stock in September?
This year has been a rough one so far for ASX 200 energy provider AGL.
The company’s planned demerger was binned in May after a brutal campaign led by major shareholder Mike Cannon-Brookes. That saw a number of the company’s upper management vow to step down.
Additionally, its Loy Yang A coal-fired power station was dealt a blow in April when one of its generators was taken out of action after an electrical fault.
But why are we delving back into the company’s prior suffering? It’s because the market heard updates on both happenings last month.
First, AGL revealed the generator would not return to service in September as planned. Its restart date was pushed back to mid-October after a fault was found during testing.
Then, AGL updated the market on its new leadership team.
Former chair Peter Botten stepped down on 19 September as Patricia McKenzie stepped up to the plate. Director Diane Smith-Gander also took her leave.
The company also announced CEO Graeme Hunt planned to exit his role at the end of September. It will be temporarily filled by former chief financial officer Damien Nicks.
But the big news was still to come.
The company released the outcome of its major strategic review on Thursday, vowing to close its Loy Yang power station by financial year 2035. To do so, it will fork out $20 billion to decarbonise its portfolio.
The company also provided earnings guidance.
It predicts it will bring in between $1.25 billion and $1.45 billon of underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) and between $200 million and $320 million of underlying profit after tax in financial year 2023.
AGL share price snapshot
Each of the three announcements released by AGL in September saw its share price trade either flat or lower. However, most of the stock’s major falls came on days in which the company was silent.
Instead, the stock seemingly tracked the utilities sector’s performance, with only one day in which it went against its peers. On Friday, the AGL share price gained 3.6%, while the utilities sector slumped 1.6%.
But one poor month doesn’t make a long-term loss. The AGL share price has gained 8% since the start of 2022. It’s also trading 18% higher than it was this time last year.
For comparison, the ASX 200 has fallen 15% year to date and 10% over the last 12 months.
The post Why did the AGL share price trail the ASX 200 in September? appeared first on The Motley Fool Australia.
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More reading
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- Broker gives its verdict on the AGL share price post-coal exit plans
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- Here are the top 10 ASX 200 shares today
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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