Australia’s top electricity generator AGL Energy said it was listening to the demands of activist shareholder Mike Cannon-Brookes who wants it to fast-track its exit from coal, as it overhauls its strategy following a lower-than-expected annual profit.
According to Reuters, AGL said its aims were ultimately aligned with those of Cannon-Brookes, co-founder of software giant Atlassian, whose environmental campaign forced the company to scrap a demerger that would have kept its coal-fired power stations open longer.
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The involvement of Cannon-Brookes in the firm’s deliberations underscores the challenge for Australia’s biggest greenhouse gas emitter as it seeks to convince investors it can remain a reliable, affordable utility while quitting higher-polluting energy sources. The company has said it will set out a new strategic direction next month.
“They’ve got an important voice but they’re just one of many shareholders and their thoughts will be factored into the future direction of the company,” said AGL CEO Graeme Hunt in a phone interview on Friday, adding that Cannon-Brookes’s company would be “one of the first meetings that we’ll have” on a results roadshow.
“What we’re doing with the strategic direction, that’s not inconsistent with what Grok and many other shareholders are looking for,” Hunt added, referring to Cannon-Brookes’s private company, which made a failed takeover attempt for AGL this year.
“They want the company to succeed … and take decisions to achieve accelerated decarbonisation but do it in a way that’s good for customers, shareholders and the company overall. There’s no disconnect there at all.”
A spokesperson for Cannon-Brookes declined to comment.
Blaming price volatility and an uninsured power station outage, AGL said underlying profit more than halved to $225 million for the year to June, within its guidance but missing analysts’ estimates of $234.4 million, according to Refinitiv data.
The company also gave no profit forecast, as it had flagged previously, other than to say its earnings in the year ahead would be “resilient” in challenging market conditions. Shares of AGL fell 6 per cent by midafternoon, against a flat overall market.
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UBS analysts called the fiscal 2022 result “soft”, while Ord Minnett analysts said the result was “mixed” with “substantial earnings growth … likely not occur until FY24 as hedge contracts roll off”.
AGL declared a final dividend of $0.10 a share, down from $0.34 a year ago.
