The AGL Energy Limited (ASX: AGL) share price has come under pressure on Monday.
In morning trade, the energy company's shares are down 3.5% to $8.39.
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Why is the AGL share price falling?
The catalyst for the weakness in the AGL share price on Monday has been the release of a profit warning.
According to the release, AGL has downgraded its earnings guidance for FY 2022 due to a generator fault at Unit 2 of the Loy Yang A Power Station in Victoria in April.
AGL now expects its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to be between $1,230 million and $1,300 million. This is down from its previous guidance range of between $1,275 million and $1,400 million.
It will be a similar story on the bottom line, with underlying profit after tax for FY 2022 now expected to be between $220 million and $270 million. This is down from AGL's previous guidance range of between $260 million to $340 million.
What about FY 2023?
The release explains that AGL currently expects the unit to return to service by 1 August. Engineering assessments are continuing and AGL will inform the market of any material changes to this timeframe.
In light of this, the financial impact from the event will be split between FY 2022 and FY 2023. This will be approximately $60 million pre-tax ($41 million after tax) in FY 2022 and approximately $13 million pre-tax ($9 million after tax) in FY 2023.
The company also revealed that it is focused on affordability and reliability for its customers and is reviewing whether any upcoming planned outages in the rest of the generation portfolio can be shifted to help mitigate AGL's shorter energy position in the market.
