Why is the AGL share price heading south on Friday?

AGL provided an update in relation to its Loy Yang A Unit 2.

| More on:
sad looking petroleum worker standing next to oil drill

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • AGL shares are backtracking 1.48% to $8.63 
  • The company stated that its Loy Yang A Unit 2 won't be online until the second half of September 
  • Management is likely to provide its FY23 earnings guidance around the same time once AGL's strategic review is completed 

The AGL Energy Limited (ASX: AGL) share price is falling today along with the broader ASX market.

At the time of writing, the Australian energy giant's shares are down 1.48% to $8.63.

For context, the S&P/ASX 200 Index (ASX: XJO) is shedding 0.95% to 6,953.3 points following heavy losses on Wall Street overnight.

What did AGL announce?

Investors are reacting to the company's latest update, with the AGL share price slipping into the red.

According to its release, AGL advised that it has completed a technical review of its Loy Yang A Unit 2.

During mid-April, the Loy Yang A Unit 2 went offline following an electrical fault with the generator.

The team ran a number of tests and found that the generator rotor had failed.

Since then, a number of engineers and suppliers have worked with AGL to initiate a plan for conducting repairs.

Previously, management had expected that the unit would return to service at the beginning of August.

However, the date has now been pushed back until the second half of September. The delayed repairs are due to "global supply chain issues and the availability of specialised materials."

AGL stated it will provide an update in the new financial year regarding the financial impact following the extended outage.

Furthermore, it does not anticipate that FY23 earnings guidance will be issued before the review of the company's strategic direction. This is assumed to be completed sometime in September.

In other news reported by the Australian, AGL's Bayswater coal plant also suffering outage problems. The mega power station is reportedly operating at 25% capacity due to a combination of mechanical faults and scheduled maintenance, adding to Australia's widening energy crisis.

AGL share price snapshot

Despite falling today, the AGL share price has zipped around 40% higher in 2022.

A boom in energy prices is being driven by the Russian war in Ukraine as well as inflationary movements.

Although, when looking at the past 12 months, the company's shares are down 7%.

Based on today's price, AGL presides a market capitalisation of approximately $5.96 billion.

Motley Fool contributor Aaron Teboneras 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.

More on Energy Shares

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Energy Shares

This ASX 200 mining stock just reported a 40% earnings jump

Investors appear pleased with this miner's performance during the first quarter.

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Energy Shares

Are beaten down Paladin Energy shares a bargain buy?

Bell Potter thinks this beaten down uranium stock could be worth picking up.

Read more »

Worker inspecting oil and gas pipeline.
Energy Shares

3 headwinds facing ASX 200 energy stocks in 2025

After a tough 12 months, what’s ahead for ASX 200 energy stocks in 2025?

Read more »

Man holding Australian dollar notes, symbolising dividends.
Energy Shares

Dividend investors: Top ASX energy shares for November

These are the energy stocks I would buy for dividend income.

Read more »

Smiling attractive caucasian supervisor in grey suit and with white helmet on head holding tablet while standing in power plant.
Energy Shares

Why is the Woodside share price outperforming today?

Woodside shares are marching higher today. Let’s find out why.

Read more »

A corporate executive in a suit and wearing boxing gloves slumps in the corner of the ring representing the battered Zip share price and consideration reportedly being given to dumping the company's UK operations
Energy Shares

Down 55% in 6 months, why I think Paladin Energy shares are now a bargain buy

I think ASX 200 investors have overreacted in selling down this ASX 200 uranium stock.

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Energy Shares

Is Woodside stock a buy for its 8% dividend yield?

Woodside's dividends look fat, but proceed with caution...

Read more »

A man sits wide-eyed at a desk with a laptop open and holds one hand to his forehead with an extremely worried look on his face as he reads news of the Bitcoin price falling today on his mobile phone
Share Fallers

ASX 200 uranium stock alert: Paladin Energy shares just crashed 29%!

Paladin Energy shares are under intense selling pressure on Tuesday.

Read more »