# AGL - AGL Energy



## nikkothescorpio (15 October 2007)

Hi,

I wondered if anyone could explain to me why the market is hammering AGK so hard today?

I noted their profit downgrade, but unless I'm missing something the selloff on the market is either really over the top or I've missed some detail badly.

Its getting the absolute bejesus kicked out of it at present!  Down nearly 18%

Cheers, Nikko


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## prawn_86 (15 October 2007)

*Re: AGK - AGL Energy Limited*

I havnt read the announcement, but i do know that the market does not like profit downgrades in top 200 stocks.

check out what happened to Downer EDI earlier in the year for an example.

may represent a buying opportunity once an uptrend is established


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## greenfs (15 October 2007)

*Re: AGK - AGL Energy*

The reason for the extent of the price drop is based around the No. 1 man about 4 mos ago having given the market, including Baillieu, assurances that everything was in line with previous forecasts. He better have a blxxdy good reason or he might be without a job.

If you cannot trust management on such matters then you are better off in other stocks and in this regard I am taking my holdings (some of my hard earned Super) away from this company as there are quite obviously better investment scenarios. 

Story is not unlike Sigma (SIP) from a couple of months back.


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## greenfs (15 October 2007)

*Re: AGK - AGL Energy*

In the opinion of my broker this stock has been oversold today and now represents good buying value at anything less than $14.50. Whilst the forecast profit has been reduced by 10%, this is partly due to a one off item. Therefore, as some time goes by we could soon see this stock above $15. Interesting times.

I hope that this is not the first of a number of profit downgrades or we might soon find ourselves running towards a bear market. I for one expect most of the major lenders may have to revisit theit forecasts as, in my capacity as a mortgage broker, I am aware that lending volumes HAVE reduced substantially.


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## prawn_86 (15 October 2007)

*Re: AGK - AGL Energy*

lol one bad announcement isnt really enough to kick off a bear market is it greens? 

i will look into AGL tonight and see if they are worth buying IMO.


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## Brengun (19 October 2007)

*Re: AGK - AGL Energy*

I just got some for $12.99. What a drop! Not a closely watched stock for me but I just happened to get bored and check my wishlist and the rediculously low buy prices I have on it and AGK was way under it.


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## Quasar217 (26 October 2007)

*Re: AGK - AGL Energy*

Almost down to $12 today. I also bought in around the $13 mark, thinking it a bargain. Is this one coming back? Time to buy more or ditch?


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## all-green-plz (26 October 2007)

*Re: AGK - AGL Energy*



Quasar217 said:


> Almost down to $12 today. I also bought in around the $13 mark, thinking it a bargain. Is this one coming back? Time to buy more or ditch?




i am in the same boat as you are, entered at $13.10, thinking it was a bargain.. but i dunno where it is heading now.... or should i cut my loss and abandone ship?


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## Flyer (26 October 2007)

*Re: AGK - AGL Energy*

AGL has been through a few dips before. The same as some other great companies.

It will be back over $18, the question is when. I think there is more bad news coming though. 

In the mean time they will pay a good dividend, sometimes even a special dividend.

This one is purely for your super or long term, not a trading stock.


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## zengin (29 October 2007)

*Re: AGK - AGL Energy*

Hi Guys

Iam also in the same boat plus little bit worse of , I got in it when there were $13.32 thinking it was a bargain  How wrong was I.
I think you guys right it is not a trade stock , it may be good for long term.
I wish I had some Jubile mines stock


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## vishalt (29 October 2007)

*Re: AGK - AGL Energy*

You're right on the ball flyer, Utilities = defense. 

Shame AGL's CEO was a loser, but the brand is still good, AGL powers a hell of a lot of homes.


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## marklar (17 December 2007)

*Re: AGK - AGL Energy*

A few announcements out today, project Phoenix looks like it is the reason I've been stuck on hold  for 3 hours+  trying to sort out an electricity account problem.  Lucky I'm not a shareholder, treat your customers like crap and they'll leave...

m.


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## hardcoremike (28 December 2007)

*Re: AGK - AGL Energy*

i started doing some basic "technical analysis" on this stock.  for the past 2 months i can see a falling wedge forming and is about to lead to a bearish trend.

can anyone confirm this? don't have images atm.

cheers


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## Ashsaege (28 December 2007)

*Re: AGK - AGL Energy*

Can you please explain to me what a bearish trend is? Im pretty new to all of is... on a steep learning curve


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## hardcoremike (28 December 2007)

*Re: AGK - AGL Energy*

g'day .what i actually meant was it looks to be a rising wedge
it has resistance at aroud 13.50, and the lows of the past 2 months just keep on getting higher hence the two will converge.

but the problem is that the highs are not getting higher, dont know if that still is suffice for it


this site has a better explanation.
http://stockcharts.com/school/doku...._analysis:chart_patterns:rising_wedge_reversa


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## Tysonboss1 (3 February 2008)

*Re: AGK - AGL Energy*

I think AGL is a great longterm hold, They have a great mix of assets and I think they will perform quite well over the coming years as we see oil peaking.

AGL on a p/e of 11 has to be great buying, At this price I may buy some on margin.


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## Trader Paul (19 May 2008)

*Re: AGK - AGL Energy*



Hi folks,

AGK ... looking for some significant and positive news, early 
this week, as 4 positive time cycles come out to play ..... 

...... this could be very BIIG news ... !~!

have a great day

  paul



=====


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## Sakk (1 September 2008)

*Re: AGK - AGL Energy*

As stated in the JBH thread I was flicking through ASX stocks, AGK signaled a strong bottom reversal signal right on support.

A good low risk entry, risking 0.40 with a potential target at 14.50 currently if holding it would be a 4.5R open winner.

I'm starting to think I should pay more attention to the Aussie market


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## Sir Osisofliver (1 September 2008)

*Re: AGK - AGL Energy*

Sorry if I'm telling you something that you already know...AGK holds 30% of QGC (Queensland Gas Company). QGC negotiated this to make them bulletproof from the Santos takeover offer. During the last 18 months QGC has gone from 1.34 to 4.20 (and as high as 6.39) adding a tidy ~700M to AGK's coffers. 

Be aware of the effect that this can have on your technical analysis - I'd suggest doing an overlay chart to try and separate QGC gain from AGK's share price movement's to get a clearer picture.

Sir O.


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## Sakk (1 September 2008)

*Re: AGK - AGL Energy*



Sir Osisofliver said:


> Sorry if I'm telling you something that you already know...AGK holds 30% of QGC (Queensland Gas Company). QGC negotiated this to make them bulletproof from the Santos takeover offer. During the last 18 months QGC has gone from 1.34 to 4.20 (and as high as 6.39) adding a tidy ~700M to AGK's coffers.
> 
> Be aware of the effect that this can have on your technical analysis - I'd suggest doing an overlay chart to try and separate QGC gain from AGK's share price movement's to get a clearer picture.
> 
> Sir O.




Here's the chart 

Which would you rather hold?

.......................................................................................................


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## Sean K (17 December 2008)

*Re: AGK - AGL Energy*

I held AGL yonks ago, but sold last year when I cleared the decks of blue chips and concentrated on short term trading.

What are they up to now?

Any holders out there wanting to discuss?


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## Sean K (23 December 2008)

*Re: AGK - AGL Energy*

Looks like they're buying AJL or something they own.

Not many charts looking like this the past 6 months. As in, gone up...

Is that an ascending triangle I spy?


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## grace (23 December 2008)

*Re: AGK - AGL Energy*

Sydney Gas in a trading halt in relation to a takeover coming their way.

AJL also in a trading halt.

What is going on?


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## Flyer (23 December 2008)

*Re: AGK - AGL Energy*

AGL Energy has requested a trading halt on its shares amid speculation it is about to announce a bid for rival Sydney Gas.

“The reason for the trading halt is that AGL is in discussion concerning a possible material transaction,” it said in a statement to the Australian Securities Exchange today. 

AGL said it expected to make the announcement before the start of trading tomorrow. 

Earlier today, Sydney Gas had requested a trading halt on its shares pending an announcement about a takeover bid. 

“The trading halt is requested pending an announcement by the company in relation to a takeover bid,”  a Sydney Gas statement said. 

Sydney Gas shares last traded at 27.5c and AGL last traded at $15.45.


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## Flyer (23 December 2008)

*Re: AGK - AGL Energy*

AGL moves into position

THE SPECTATORS
Snowball effect
Bartholomeusz: AGL moves into position

Trading halts for three companies this morning is a strong signal that the latest bout of consolidation of the coal seam gas sector is about to get underway. Unlike the flurry of large-scale activity throughout this year, however, this time the action is moving into NSW. 

The securities of AGL, Sydney Gas and AJ Lucas Group were all placed in trading halts this morning: AGL’s and AJ Lucas’s because they are both involved in discussions concerning a "material transaction". Sydney Gas is in a trading halt "in relation to a takeover bid." AJ Lucas became Sydney Gas’s major shareholder, with about 20 per cent of its capital, this year. 

As the joint venture partner of Sydney Gas in its Hunter Valley and Camden and Sydney projects, AGL already has its foot on the group’s key resources.

Sydney Gas is potentially of real strategic consequence for AGL, the largest supplier of gas into Sydney and Newcastle.

There is an expectation of an increasing shortfall of gas for the Sydney market over the next decade that coal seam gas is expected to meet. With the more deeply explored and developed Queensland coal seam gas fields earmarked for the plethora of export LNG plants on the drawing boards, NSW gas will come into increasing focus. 

Sydney Gas’s reserves and prospects are located close to the NSW electricity grid and the main gas transmission pipelines into Newcastle and Sydney. It already has long-term contracts to supply AGL. The joint venture partners have talked about an ambition of supplying up to 20 per cent of the existing NSW gas market by 2015 from its resources at Camden and the Hunter Valley and up to 50 per cent beyond 2015. 

AGL, having sold its stake in Queensland Gas Company to BG Group for $1.2 billion and its oil and gas interest in Papua New Guinea for $1.1 billion this year is well placed for expansion. As part of the BG deal AGL was granted options over more than 1000 petajoules of Queensland gas reserves and exploration acreage, options that would cost $856 million to exercise. 

Sydney Gas wouldn’t be a major move for AGL. It has a market capitalisation of only about $110 million, although the spate of coal seam gas transactions – including Arrow Energy’s $551 million bid for Pure Energy this week – says that market prices aren’t much of a guide to takeover values in the sector. Arrow offered about $5.40 a share for Pure when the target’s shares had been trading at less than $1 only about six weeks ago. 

In the current environment there is likely to be significant consolidation of the smaller and more weakly-funded players in coal seam gas as the Queensland LNG players look to secure the resources needed to under-pin two-train LNG projects and the bigger players move to pre-empt the likely positive (for producers) eventual impact of the LNG projects on domestic gas prices. 

There are vast amounts of gas in the Sydney Basin so the prospect of rising gas prices and shortfalls in supply ought to see what has until now been a Queensland-focused land-grab spill into NSW. 

There are some transmission constraints in supplying Queensland gas into NSW and there would be benefits for the sector in displacing Queensland gas contracted to NSW customers – freeing it up for the LNG plants – with local production.


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## kam75 (5 January 2009)

*Re: AGK - AGL Energy*

Today we had a lesson from AGK.  Don't ever preempt the breakout, regardless of how perfect a chart pattern may appear.


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## kam75 (6 January 2009)

*Re: AGK - AGL Energy*

Here's the chart showing the Ascending Triangle failure from yesterday.  Will be interesting the see what happens now.  Sometimes a failed pattern has a habit of manifesting into a more complex chart pattern.


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## Diesellife (10 February 2009)

*Re: AGK - AGL Energy*

Does anyone else has any other speculative vision on this share?
It will be very thankful if someone can give me a little insight.


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## Jonathan111 (2 July 2009)

*Re: AGK - AGL Energy*

When SGL was taken over i decided to buy some AGK 13.80 and AJL 2.63...

Anyway do you think that AGK would raise capital to buy the NSW government's electrical assets that are coming up for sale? and if this is the case then would the share pricesuffer if they raise capital through a share offering at say 13.00 a share or something like that.  Although i have experienced other companies who had share offerings lower than the market price and the market price did not reach that level.

Any opinions?



AGK is now $13.42 and AJL is $3.41


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## jancha (13 August 2009)

*Re: AGK - AGL Energy*

Volume & sp up today more so than usual. Could the dividend at the end of the month have any bearing on it? Any thoughts on this?


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## jancha (21 August 2009)

*Re: AGK - AGL Energy*

Does anyone have any interest in AGK. 3% drop in sp today & yet company profits were up as was Santos. Yet Santos gained near on 2%. Both being in the energy sector I would have thought that both would move similiar with in the market as banks generally do. Any ideas as to why the 5% difference?


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## jancha (10 September 2009)

*Re: AGK - AGL Energy*

Whats wrong with AGK? Why does it continually fall. Dividend date today & yet it's still falling. No one seems to have any confidence in renewable energy & its profits. I would have thought that in the medium term the sp of $13.40 was cheap & a Div of 28c was an attractive buy.


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## So_Cynical (10 September 2009)

*Re: AGK - AGL Energy*



jancha said:


> Whats wrong with AGK? Why does it continually fall. Dividend date today & yet it's still falling. No one seems to have any confidence in renewable energy & its profits. I would have thought that in the medium term the sp of $13.40 was cheap & a Div of 28c was an attractive buy.




The 28 cent divi factored forward gives an annualized return of about 4% at current SP corn: nothing spectacular, especially when there's talk of interest rates going up...AGK is a defensive stock and like other defensive stocks, seems to be a little range bound.

I do like there generation assets and was surprised at how many green assets they actually do have...lots to like about AGK if u can get in at a good price, something starting with a 12 would suit me.


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## jancha (11 September 2009)

*Re: AGK - AGL Energy*



So_Cynical said:


> The 28 cent divi factored forward gives an annualized return of about 4% at current SP corn: nothing spectacular, especially when there's talk of interest rates going up...AGK is a defensive stock and like other defensive stocks, seems to be a little range bound.
> 
> I do like there generation assets and was surprised at how many green assets they actually do have...lots to like about AGK if u can get in at a good price, something starting with a 12 would suit me.




Yes a defensive stock. Thats why I thought it was a good buy a that price. There's still quite a lot of doubt as to the recovery. Most people i've spoken to seem to think that there will another dip before the end of the year or worst. The uncertainty of whats to come i thought would have made this a good buy at it's current price. Also have noted that Huntley recommendation of a buy is now a hold due to the uncertainty of profits with renewable energy. Thanks for input anyway Cyn.


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## Dutchy3 (1 September 2011)

*Re: AGK - AGL Energy*

Possible flag setting up ... might be good for a few % in the coming days


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## jennifer.c.thomp (9 March 2012)

*Re: AGK - AGL Energy*

Could anyone explain what the "Subordinated Notes offer" is that AGL is offering?


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## skc (9 March 2012)

*Re: AGK - AGL Energy*



jennifer.c.thomp said:


> Could anyone explain what the "Subordinated Notes offer" is that AGL is offering?




Notes = a type of loan instrument. i.e. AGL wants to borrow money from you and pay you some interest in return.

Subordinated = The note's position in AGL's capital structure, being subordinate to AGL's senior debt.  http://en.wikipedia.org/wiki/Capital_structure

Offer = Would you like to buy some?

Here's one view on these notes.

http://www.intelligentinvestor.com....s-AGKHA/AGL-Notes-Passing-hat-now-old-hat.cfm

P.S. Do you know Wayne Rooney?


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## Judd (24 May 2012)

*Re: AGK - AGL Energy*

Has come out with a 1 for 6 renounceable rights issue @ $11.60 per share.  Probably will take them up as it is only a couple of thousand $$'s.


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## Judd (19 July 2012)

*Re: AGK - AGL Energy*

Seems there was/is some capital gain through taking up the rights issue.  How long that will last is a moot point.


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## coolcup (29 May 2013)

*Re: AGK - AGL Energy*

Looks to me as though AGK has just breached the lower bound of the upward moving trend channel. Time for a primary downturn I think!!


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## Judd (16 September 2014)

*Re: AGK - AGL Energy*

For those who are/were interested, AGK had a 1 for 5 entitlement offer at $11 per share.  Closed yesterday so the ability for a little arbitrage trading has been missed by some.


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## skc (16 September 2014)

*Re: AGK - AGL Energy*



Judd said:


> For those who are/were interested, AGK had a 1 for 5 entitlement offer at $11 per share.  Closed yesterday so the ability for a little arbitrage trading has been missed by some.




How does one go about this kind of arbitrage trading?


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## Judd (16 September 2014)

*Re: AGK - AGL Energy*



skc said:


> How does one go about this kind of arbitrage trading?




Pretty simple.  The announcement of the 1 for 5 was for those who held shares at 25 August.  So if you held, say 2,000 shares on that date, you would be entitled to 400 shares @ $11 per share.  Sell 400 shares on market at about $14.30 and take up the entitlement offer at $11.00: excluding brokerage you pocket $1,320 ($5220-$4400.)

PS: There would be CGT involved but, in my case, I have been carrying forward a number of capital losses so that wasn't an issue for me.  Wasn't concerned about the number of AGK shares I held overall as it is not a large part of my holdings.


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## skc (16 September 2014)

*Re: AGK - AGL Energy*



Judd said:


> Pretty simple.  The announcement of the 1 for 5 was for those who held shares at 25 August.  So if you held, say 2,000 shares on that date, you would be entitled to 400 shares @ $11 per share.  Sell 400 shares on market at about $14.30 and take up the entitlement offer at $11.00: excluding brokerage you pocket $1,320 ($5220-$4400.)
> 
> PS: There would be CGT involved but, in my case, I have been carrying forward a number of capital losses so that wasn't an issue for me.  Wasn't concerned about the number of AGK shares I held overall as it is not a large part of my holdings.




The rights issue was renounceable and new shares were not entitled to the last dividend. So when the stock went XE (ex-entitlement) you get, in your example, 400 AGKR in your account. The value of the AGKR traded exactly (share price minus subscription price and adjusted for dividend)... so if a holder wanted to maintain their 2000 shares holding, they simply sell their 400 tradable rights and receive the same economic benefit as the example you offered above. There was no "arbitrage" per se in this instance.

Sometimes there are opportunity for rights arbitrage... where you can buy AGKR and short AGK and pocket the difference. But in this issue the price difference rarely strayed beyond 2c so there wasn't much to be had.


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## Judd (16 September 2014)

*Re: AGK - AGL Energy*

Well that may be but you have to bear in mind, I am a simple soul and detest complications.  It is why I followed the adage of "Learning from one's mistakes" and ceased attempting to trade many moons ago.


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## skc (16 September 2014)

*Re: AGK - AGL Energy*



Judd said:


> Well that may be but you have to bear in mind, I am a simple soul and detest complications.  It is why I followed the adage of "Learning from one's mistakes" and ceased attempting to trade many moons ago.




No worries Judd. You mentioned arbitrage and that will always stir my interest. I followed the AGKR/AGK potential trade very closely through the 2 week period so I was just asking to verify what you meant by arbitrage opportunity.

There are many variations to capital management (either raising or buy back) that offers arbitrage opportunities... and in this instance with renounceable rights the simplest way to gain some benefit was to just sell the rights.


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## skyQuake (16 September 2014)

*Re: AGK - AGL Energy*



skc said:


> But in this issue the price difference rarely strayed beyond 2c so there wasn't much to be had.




It was also a rare opp where AGK borrow rates were much lower than the cash rate.

You'd make more from cash component (S AGK, B AGKR) sitting in your account than the 1-3c arb itself!


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## Judd (16 September 2014)

*Re: AGK - AGL Energy*



skyQuake said:


> It was also a rare opp where AGK borrow rates were much lower than the cash rate.
> 
> You'd make more from cash component (S AGK, B AGKR) sitting in your account than the 1-3c arb itself!




Such convolutions when all this little black duck wanted to do was to raise cash to assist with the buy of a Gibson 335!


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## skc (16 September 2014)

*Re: AGK - AGL Energy*



skyQuake said:


> It was also a rare opp where AGK borrow rates were much lower than the cash rate.
> 
> You'd make more from cash component (S AGK, B AGKR) sitting in your account than the 1-3c arb itself!




Haha. I never thought of it that way. I guess the face value of the AGK was 6x higher than AGKR.

But the holding period was only 2-3 weeks...

P.S. I don't know that we receive cash rate on borrow


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## princeplanet (16 September 2014)

*Re: AGK - AGL Energy*

Hmm, an even _simpler _ soul am I   I hold AGK and didn't know where the AGKR even came from! Let alone, why they mysteriously disappeared a coupla days back, all without me doing anything... 

Were they (the AGKR) created, and then subtracted when I didn't take up some kind of offer? Or were they partially converted from the AGK shares, and then sold without my involvement? If the latter, why didn't the settlement appear in my Comsec CDIA account?  I know, I know, I should be able to tell by looking at any sudden drop that that happened with the AGK standard shares, but then again, there have been a few of those recently right? The candlestick experts at Comsec say it's a hot sell ATM, BTW.... what say the gurus here?


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## skc (16 September 2014)

*Re: AGK - AGL Energy*



princeplanet said:


> Hmm, an even _simpler _ soul am I   I hold AGK and didn't know where the AGKR even came from! Let alone, why they mysteriously disappeared a coupla days back, all without me doing anything...
> 
> Were they (the AGKR) created, and then subtracted when I didn't take up some kind of offer? Or were they partially converted from the AGK shares, and then sold without my involvement? If the latter, why didn't the settlement appear in my Comsec CDIA account?  I know, I know, I should be able to tell by looking at any sudden drop that that happened with the AGK standard shares, but then again, there have been a few of those recently right? The candlestick experts at Comsec say it's a hot sell ATM, BTW.... what say the gurus here?




In this instance, if you do nothing, your friendly investment bank will undertake a "retail shortfall bookbuild" and you will receive some amount of retail premium on the entitlement that you didn't pick up. 

But in other forms of capital raising, the do nothing option could be quite costly, so pay good attention to these things, read the booklet and ask questions here or your financial advisors.

AGK has been quite weak ever since they issued a profit downgrade on the back of the carbon tax being repealed... and not helped by a discounted capital raising to fund their acquisition.


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## System (24 November 2014)

On November 24th, 2014, AGL Energy Limited changed its ASX code from AGK to AGL.


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## notting (27 January 2015)

One for the Anti Fracking movement - 



> SYDNEY--AGL Energy Ltd. (AGL.AU) suspended the early stages of a controversial
> coal-seam-gas project in Australia's New South Wales state after it detected
> potentially toxic chemicals in surrounding ground water.
> State lawmakers last year allowed AGL to conduct so-called fracking activities at four
> ...


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## SmokeyGhost (7 July 2016)

This seems to have been a bit of a sleeper.  When I looked earlier this week it was around the $20 mark, now down to the mid-$19 based on a profit outlook I guess.  Initially bought this years ago and was quite annoyed with AGL management and the then dude from Alinta (Bob Browning) who I felt had both trashed a good steady income producing share - boring but stable.  I last bought during 2009 at $13.50.  It's been changing its focus over time which is rather attractive to me.  Will watch on a "just in case" basis.


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## Quant (20 April 2017)

AGL one of the better looking large cap 4 shorts in market atm , gravity is about to take hold imo  . CPU on the list as well  , will load some charts tommorow


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## skc (20 April 2017)

Quant said:


> AGL one of the better looking large cap 4 shorts in market atm , gravity is about to take hold imo  . CPU on the list as well  , will load some charts tommorow




Doesn't look too bad. I also have TWE and ALL in the same vein.


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## Quant (20 April 2017)

skc said:


> Doesn't look too bad. I also have TWE and ALL in the same vein.



Maybe the  share buyback might be an issue for a while , i reckon its the main reason for the runup tbh  , it held TLS up for a longtime as well previously . The 2 you mention look similar as well .


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## Quant (21 April 2017)

Bit of a bump and run reversal look  ( exhaustive ) , like it a lot  . Extended on all my metrics and my FA man has targets way lower  .

10 August 2017 2017 Full Year Result
23 August 20171 FY17 Full Year Result Ex-dividend date


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## Smurf1976 (21 April 2017)

Quant said:


> Maybe the  share buyback might be an issue for a while , i reckon its the main reason for the runup tbh




That the wholesale price of electricity has almost tripled would likely be a factor as well. 

You can't buy shares in Snowy Hydro, Hydro Tas or Energy Australia since they're not listed companies (SH and HT being government owned, EA being foreign owned) whilst the likes of Origin whilst listed are heavily exposed to gas prices (and Origin is short on its own generating capacity too). So of what's left AGL has been the "obvious" share to buy for those aware of the electricity price situation and seeking to profit from that.

I'm just commenting on some fundamentals there and will leave others who know more about charts to look at that aspect. Agreed that it has run up hard and looks ripe for a correction.


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## Quant (21 April 2017)

Smurf1976 said:


> That the wholesale price of electricity has almost tripled would likely be a factor as well.
> 
> You can't buy shares in Snowy Hydro, Hydro Tas or Energy Australia since they're not listed companies (SH and HT being government owned, EA being foreign owned) whilst the likes of Origin whilst listed are heavily exposed to gas prices (and Origin is short on its own generating capacity too). So of what's left AGL has been the "obvious" share to buy for those aware of the electricity price situation and seeking to profit from that.
> 
> I'm just commenting on some fundamentals there and will leave others who know more about charts to look at that aspect. Agreed that it has run up hard and looks ripe for a correction.




Yeah for sure thats going to have a large effect  , share buy back of 5% can only do so much but it likely takes a lot of the trader churn volume of the market so the effect is magnified , anyhow perfect storm for extended move  .


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## Quant (7 June 2017)

Gravity starting to take effect  . Index weakness certainly helping


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## rb250660 (7 June 2017)

Yep, closed my long 3 weeks ago. I didn't look until I saw this post today and I'm glad I got the signal back then!


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## Quant (22 August 2017)

Now there is a bit more clarity on guidance I think a nice swing low is on the horizon now , Exdiv tomorrow and we be getting closer to the zone . watching the 21- 22 level and alerts set


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## greggles (27 April 2018)

*AGL to build $400m gas-fired power plant*

http://www.news.com.au/finance/busi...t/news-story/7b3613e7e07991d2e7f72e2e61e05fa6

AGL Energy will build a 252 megawatt electricity plant near Newcastle in NSW which is expected to make up some of the shortfall following the closure of its Liddell power station.


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## mcgrath111 (12 July 2018)

Interesting to see if AGL bounces from yesterday's shalackin.

Seem's to be up on a bit of volume, a bit of a bounce - might take a dip and see if we head toward 22.5






The risk of ACCC and trade war are apparent, lets see if I can get my buy order filled.


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## peter2 (14 April 2019)

Since the last post price fell to 17.50 (Oct18). 
It has since bounced and was not effected by the market dip (Oct - Dec18).

There's an attractive chart based setup (BO-HR) for a longer term holder (good yield?).


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## Smurf1976 (17 April 2019)

https://www.agl.com.au/about-agl/me...dro-energy-storage-project-in-south-australia

AGL aren't the original "inventor" of this specific proposal but they've bought the rights to develop the 250 MW pumped storage scheme.

At the present time AGL is building the new Barker Inlet gas-fired power station in metropolitan Adelaide with a capacity of 210 MW. Barker Inlet is physically located near the existing Torrens Island power stations (AGL) noting that 'A' station, with a capacity of 480 MW, is planned to be closed progressively with 240 MW to shut in September 2019, 120 MW in 2020 and the final 120 MW in 2021.

To put the figures into perspective, electricity demand in SA ranges between about 600 MW to 3400 MW with the average being around 1500 MW. Both extremes are heavily influenced by weather. 

A number of other companies are also proposing similar scale pumped hydro projects in SA and are in practice rivals to the AGL proposal.


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## Smurf1976 (8 June 2019)

I've posted further details in "The future of energy generation and storage" thread since it has relevance to all companies operating in the National Electricity Market, listed or otherwise, but in short there has been a significant incident at Loy Yang power station in Victoria with impact on the company's finances estimated to be in the $60 - $100 million range.

The other thread is here:

https://www.aussiestockforums.com/threads/the-future-of-energy-generation-and-storage.29842/page-164

And the company's media release is here:

https://www.agl.com.au/about-agl/me...20-impact-of-extended-unit-outage-at-loy-yang

Rival companies would have been aware of the failure when it occurred, the production data from power stations is publicly available to anyone in real time and very heavily analysed in the industry, but so far as I'm aware today's the first time AGL has put a specific cost and 7 month time frame on the failure.


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## Smurf1976 (17 October 2019)

First power generation from AGL's new Barker Inlet power station occurred today. At present that's just testing but they've generated some power and that has gone into the grid so it's a step forward.

The new facility consists of 12 x 17.5 MW reciprocating engines, so 210 MW in total, located next to AGL's existing Torrens Island B power station approximately 15km from the Adelaide CBD. Primary fuel used is natural gas, secondary fuel source is diesel.

To put the new facility into perspective, its 210 MW capacity compares with SA's all time record peak electricity demand of approximately 3400 MW and average consumption of 1564 MW from all sources over the past 12 months. So the new facility is not large from a national perspective but it's locally significant in SA and represents a significant asset for AGL given its budgeted construction cost of $295 million.

As a substantial scale facility using multiple reciprocating engines it is unique within the National Electricity Market and as such will be attracting considerable attention from rival companies and others as to how it's actually operated. AGL are under no obligation to publicly release cost data but the physical output is publicly available in real time to anyone and will no doubt be heavily analysed against the market price for both gas and electricity by many.

AGL haven't committed to it at this stage but they do have in place the approvals and land to duplicate the facility at current site at a future time if they choose to.


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## Smurf1976 (4 November 2019)

State and Federal politicians have done the official opening of the Barker Inlet station today. 

AGL's media release about that is here: https://www.agl.com.au/about-agl/me...d-major-dispatchable-power-station-in-7-years

It's not actually in commercial operation as yet. It has generated some power which has gone into the grid but is still undergoing an assortment of tests as part of the commissioning process which will take a few more weeks to complete - you don't just start up a $295 million plant and hope for the best.

A time lapse video of construction for those interested:


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## sptrawler (4 November 2019)

12 X 17.5 MW units, will give them a lot of flexibility, to fit in with the renewables. Also being reciprocating engines, they will basically be instant on/off units, nice idea and should work well. IMO


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## Smurf1976 (22 January 2020)

Smurf1976 said:


> I've posted further details in "The future of energy generation and storage" thread since it has relevance to all companies operating in the National Electricity Market, listed or otherwise, but in short there has been a significant incident at Loy Yang power station in Victoria with impact on the company's finances estimated to be in the $60 - $100 million range.




Finally back to full production at Loy Yang as of tonight following the major incident which occurred on 18 May 2019.

So all up it took about 8 months versus the original target of 7 - not bad considering the scale of work required and that it's by no means a routine everyday sort of task to be doing.


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## sptrawler (13 February 2020)

AGL profit down 19.6%, losing a big generator for 8 months wouldn't have helped.


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## Dona Ferentes (6 March 2020)

LNG import terminal for East Coast ... to be at Pt Crib, Victoria

https://www.agl.com.au/about-agl/how-we-source-energy/gas-import-project


(*Victoria? that's the state with moratorium for on-shore hydrocarbon exploration?)

there's also a Twiggy Forrest backed project (further developed) at Port Kembla, NSW, to import LNG
https://ausindenergy.com/


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## Smurf1976 (6 March 2020)

Dona Ferentes said:


> LNG import terminal for East Coast ... to be at Pt Crib, Victoria



AGL proposal is in Victoria.

There's two other proposals in NSW and one in SA.

Long story short, in terms of where the pipelines run, Victoria does offer advantages. It also uses about the same volume of gas as NSW and SA combined which is another aspect.

It's not a done deal though and there's considerable opposition to the project. I won't speculate as to how that will play out.

BHP-Esso joint venture did have a rival LNG import proposal in Victoria but they've officially abandoned it indeed Esso has announced sale of their existing oil and gas assets in Victoria (BHP are contemplating what to do about their half of the JV and haven't announced anything yet to my knowledge).


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## Dark1975 (10 January 2021)

I just accumulated alot more Agl , with 8.15% yield ( 80% franked) its currently 43% down since covid, with energy stocks set to rise with the cycle, good growth stock with strong yields
I think agl is @ a good entry point now for long term growth


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## sptrawler (10 January 2021)

Dark1975 said:


> I just accumulated alot more Agl , with 8.15% yield ( 80% franked) its currently 43% down since covid, with energy stocks set to rise with the cycle, good growth stock with strong yields
> I think agl is @ a good entry point now for long term growth



I'm only thinking out loud here, so if I'm way off the mark ignore or correct as you wish, but here goes.
The Eastern States interconnected grid has many players feeding in and many more lining up to install renewables generation plant.
AGL makes a lot of its income from dispatchable generation, much of which it is going to close down in the forseable future, as per attached article:
https://www.agl.com.au/about-agl/me...e-for-the-closure-of-agl-plants-in-nsw-and-sa

If they lose the market penetration of that generating capacity, how hard will it hit their bottom line?
The Federal government has also stated, they want a private generator to commit to build a 1000MW power station by April 2021, or else the Federal Government will build it. Would that affect AGL's bottom line?
There are an awful lot of unknowns surrounding power generation ATM, as more and more want to push into renewable generation, where the money is. So will AGL be the generation power house in the future, that it was in the past? As I said I haven't looked into AGL at all, but many on here have a firm understanding of the Eastern States grid and may be able to add some meat to the subject, it certainly is an interesting one IMO.


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## Dark1975 (17 January 2021)

I purchased more Agl on Friday being at it's lows, with low  cash rates , I needed  to balance my portfolio with more high dividend yields "98 cents, roughly equates 7.90% , with the news on the 14 /1/2020 with Agl announced that energy storage tech companies wartsila and fluence to secure framework agreements to supply 1000MW of grid scale battery storage. That's great news for the company  as of late with the recent downgrades,
I personally think it's a great entry point with Agl with good solid dividends ,With Strong balance sheets ,Good net profits, In a time with low cash rates and uncertainty I think there's room for growth in price in the future,
Please DYOR


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## Smurf1976 (17 January 2021)

sptrawler said:


> There are an awful lot of unknowns surrounding power generation ATM, as more and more want to push into renewable generation, where the money is. So will AGL be the generation power house in the future, that it was in the past? As I said I haven't looked into AGL at all, but many on here have a firm understanding of the Eastern States grid and may be able to add some meat to the subject, it certainly is an interesting one IMO.



Another scenario is generation owned by company A but contracted to company B.

In that arrangement company A physically owns and operates the plant at fixed prices. Company B handles the market and business side of it all.

I'm not saying that AGL will necessarily do that but it's an option especially for an established major player and there are precedents in the industry including some involving AGL. Some smaller company builds a battery, wind farm or whatever under a fixed $ contract arrangement with someone like AGL who then own it's output but not the physical plant.

Rival company Origin have publicly disclosed that they have substantial generation volume contracted from others and similar business concepts exist in other industries too.


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## Trav. (17 January 2021)

Dark1975 said:


> I needed to balance my portfolio with more high dividend yields "98 cents, roughly equates 7.90%



@Dark1975 I think that you can't go wrong here, long term the SP should recover.

Will the dividend be scaled back ? this is what you are looking at ?

Below is the Monthly chart and the Dividend History from Market Index for reference.


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## Dark1975 (17 January 2021)

Trav. said:


> @Dark1975 I think that you can't go wrong here, long term the SP should recover.
> 
> Will the dividend be scaled back ? this is what you are looking at ?
> 
> ...



Yes , Agl intends to commit to 2023, look to attachment, Sorry for lack of information , Day trading Btc atm Interesting time it hit on the 1hr timeframe, will add more information later on the dividend


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## Dona Ferentes (4 February 2021)

unloved



> $2.69 billion in write downs show the severe headwinds faced by   Australian energy companies caused by plunging wholesale electricity   prices, unprofitable renewable power sales contracts and higher site remediation costs....




_Thirteen year lows_


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## qldfrog (4 February 2021)

I know, the narrative, why invest in money making and still here in 10 20y company when you can gamble on a concept


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## sptrawler (4 February 2021)

Power generation is not a space I would want to be in ATM, way too many dollars need spending, to appease the mob with the pitchforks. 😂


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## Smurf1976 (4 February 2021)

Electricity spot prices are down across the industry and that'll be affecting all companies in some way but is particularly an issue for those who are net long generation, that is they generate more than they sell under their own retail brand(s), and AGL is such a company.

Following prices are *average spot prices for the 2018-19 | 2019-20 | 2020-21 to date financial years*. Focusing here on the states of primary importance to AGL.

All prices are $ AUD per MWh (megawatt hour) and are simply the market spot price averages for the financial year.

NSW = $93.98 | $79.72 | $56.51

Victoria = $129.00 | $87.10 | $47.16

SA = $142.33 | $78.35 | $37.85

The figures say it all really, the market value of bulk electricity has come down from the extraordinarily high levels seen in 2018-19 to a more normal price today. That's not good for the profits of anyone generating electricity.

Looking at prices received by fuel type and location for all companies but where AGL has a major presence:

NSW coal-fired generation (companies = AGL (largest), Origin Energy, Energy Australia, Delta Electricity) = $90.87 | $75.80 | $54.57

Victorian coal-fired generation (companies = AGL (largest), Energy Australia, Alinta) = $108.40 | $73.65 | $41.66

Note that AGL is the coal supplier to Alinta in Victoria, AGL owns the mine and supplies 100% of it's own needs in that state as well as Alinta's. The terms of the contract between the two companies are not public so far as I'm aware.

SA gas-fired generation AGL plants only as follows:
Torrens Island A & B power stations = $165.89 | $96.20 | $54.60
Barker Inlet power station = N/A not operating | $87.63 | $73.29

Victorian hydro generation (companies = Snowy Hydro (largest), AGL (most of the rest), Meridian (minor)) = $222.97 | $154.33 | $67.80

NSW large scale solar generation (all companies including AGL) = $90.00 | $71.56 | $52.71

Average price for wind generation, all NEM states (Qld, NSW, Vic, Tas, SA) and all companies noting that AGL has multiple facilities either owned or contracted: $86.59 | $55.89 | $34.68

The above ultimately comes from Australian Energy Market Operator data, the raw form of which is freely available to anyone from their website www.aemo.com.au whilst various third party sites such as Aneroid and OpenNEM provide a more user friendly graphical or table form.

It should be noted that contract arrangements are such that spot prices don't directly drive revenue for generation companies in the very short term but ultimately as with anything, contract pricing will reflect spot price expectations.


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## Smurf1976 (5 February 2021)

Further to my previous post about price, the El Nino weather phenomenon and effects of COVID-19 related lockdowns etc on the economy are affecting volume.

Since it's a seasonal issue, looking specifically at the past two months (that is, Summer thus far):

Whole National Electricity Market (all states except WA and NT):

Volume (all sources) January 2021 = 17,455 GWh (or 17,455,000 MWh)
Volume (all sources) January 2020 = 18,879 GWh

Volume (all sources) December 2020 = 17,105 GWh
Volume (all sources) December 2019 = 17,648 GWh

So the relative lack of heatwave conditions, the occurrence of which drives air-conditioning load, thus far is affecting volume. Meanwhile some specific generation sources have increased output, due to construction of new facilities, thus further reducing volume from other facilities.

Following data is for all companies except where indicated otherwise:

NSW Coal January 2021 = 4136 GWh
NSW Coal January 2020 = 5003 GWh

Victoria Coal January 2021 = 3101 GWh
Victoria Coal January 2020 = 3108 GWh

AGL is the largest operator in both cases and accounts for about 44% of coal capacity in NSW and 45% in Victoria and these assets comprise a large portion of AGL's physical electricity production.

SA gas-fired generation from Torrens Island A & B power stations (AGL owned)
January 2021 = 103 GWh
January 2020 = 138 GWh

SA gas-fired generation from Barker Inlet power station (AGL owned)
January 2021 = 13 GWh
January 2020 = 35 GWh

All other companies gas-fired generation in SA (excl AGL)
January 2021 = 184 GWh
January 2020 = 257 GWh

Victoria hydro generation (AGL is the second largest operator with 30% of capacity)
January 2021 = 215 GWh
January 2020 = 194 GWh

Wind generation by all companies in all NEM states (AGL has a presence in this)
January 2021 = 1852 GWh
January 2020 = 1431 GWh

Large scale solar generation by all companies in all NEM states (AGL has a presence in this)
January 2021 = 795 GWh
January 2020 = 553 GWh

As background, generation by companies other than AGL

Estimated small scale (households etc) solar generation in all NEM states
January 2021 = 1590 GWh
January 2020 = 1216 GWh

Queensland coal generation (various companies)
January 2021 = 4112 GWh
January 2020 = 4502 GWh

Queensland gas generation (various companies)
January 2021 = 455 GWh
January 2020 = 645 GWh

NSW gas generation
January 2021 = 66 GWh (Energy Australia share 64 GWh, others 2 GWh)
January 2020 = 143 GWh (Energy Australia share 96 GWh, others 47 GWh)

Victoria gas generation (AGL has a minor presence with 6.7% of Vic gas-fired capacity)
January 2021 = 30 GWh
January 2020 = 141 GWh

Tasmania gas generation (all of which is owned by AETV Power, a subsidiary of Hydro Tasmania)
January 2021 = 2 GWh
January 2020 = 5 GWh

Queensland hydro generation (all of which is owned by CleanCo)
January 2021 = 87 GWh net of pumping
January 2020 = 23 GWh net of pumping

NSW hydro generation (Snowy Hydro owns most of it, Origin is the other significant operator)
January 2021 = 244 GWh net of pumping
January 2020 = 202 GWh net of pumping

Tasmania hydro generation (all of which is owned by Hydro Tasmania)
January 2021 = 453 GWh
January 2020 = 611 GWh

Queensland biomass generation (various companies)
January 2021 = 11 GWh
January 2020 = 11 GWh

So basically the entire industry has taken a volume hit with the only increases being wind, solar and eastern mainland states hydro.

Price down and volume down = not a particularly profitable situation for the generation side of the business.

Other major parts of AGL's business are electricity retail, natural gas retail and physical gas storage. The first two are simply a margin business, the difference between buy price and sell price less costs, whilst gas storage is a relatively minor activity and basically a "buy low, sell high" situation albeit one involving physical movement of the actual commodity.

Contrary to what most would assume - AGL has negligible involvement in actually producing gas and does not own substantial gas pipelines or electricity networks. It's a power generation, gas / electricity retail and to a much lesser extent gas storage company in practice although it does currently have a proposal for an LNG import terminal to be built in Victoria which, if it goes ahead, would make them a gas supplier as such (well, a supplier in the domestic market context). 

The present AGL owned LNG facility in Newcastle is storage only. Take gas out of the pipeline in summer, turn it into LNG and put that in the tank, reverse that in winter and put the gas back in the pipe. It's a pure storage operation apart from any LNG they happen to sell "as LNG" by loading it into a road tanker truck for use by whoever.


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## joeno (5 February 2021)

It seems to me that all electric utility companies have been in a massive bear market these last 12 months.

Can anyone explain why? The means of generating electricity is so cheap now so these stocks should be doing well right.

Also what do we see as potential price floor for AGL? It's trading cheap at 7PE


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## qldfrog (5 February 2021)

Smurf1976 said:


> Further to my previous post about price, the El Nino weather phenomenon and effects of COVID-19 related lockdowns etc on the economy are affecting volume.
> 
> Since it's a seasonal issue, looking specifically at the past two months (that is, Summer thus far):
> 
> ...



No denying lower electricity price and volume and as a system guy, the trend is not good but i also play some stocks on real fundamentals like i was with silver
Agl current pe is 7 ish, is selling a product which can not be replaced completely and critical
The narative is: it is old technology, coal burning, etc
But the write down they just took is on wind farms..yes..not fitting well with reset...
https://www.smh.com.au/business/com...-7b-in-asset-write-downs-20210204-p56zj8.html
If you have to buy a stock today at a peak bubble time, earning some dividends and to keep in the next 10y,i still believe it is not a bad bet
And it is not a majjor gas coal producer which tend not to be a bad thing across an economic cycle


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## qldfrog (5 February 2021)

qldfrog said:


> No denying lower electricity price and volume and as a system guy, the trend is not good but i also play some stocks on real fundamentals like i was with silver
> Agl current pe is 7 ish, is selling a product which can not be replaced completely and critical
> The narative is: it is old technology, coal burning, etc
> But the write down they just took is on wind farms..yes..not fitting well with reset...
> ...



Time will tell... years.. probably suited to dollar averaged investment in a basket of stocks


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## So_Cynical (5 February 2021)

joeno said:


> It seems to me that all electric utility companies have been in a massive bear market these last 12 months.
> 
> Can anyone explain why? The means of generating electricity is so cheap now so these stocks should be doing well right.
> 
> Also what do we see as potential price floor for AGL? It's trading cheap at 7PE



Read Smurfs 1st post above - pretty much explains what happening.
--------------
The wheel will turn and high prices return at some point, AGL and ORG seem to be very cyclical businesses as far as profit goes.

I'm thinking about taking a small loss on my recently acquired ORG shares and buying AGL ~ AGL is a better business - right?


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## qldfrog (5 February 2021)

So_Cynical said:


> Read Smurfs 1st post above - pretty much explains what happening.
> --------------



Indeed and my view is actually positive on medium long term.we just need a few blackouts and they will become favour of the month


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## aus_trader (5 February 2021)

So_Cynical said:


> Read Smurfs 1st post above - pretty much explains what happening.
> --------------
> The wheel will turn and high prices return at some point, AGL and ORG seem to be very cyclical businesses as far as profit goes.
> 
> I'm thinking about taking a small loss on my recently acquired ORG shares and buying AGL ~ AGL is a better business - right?



Yeah, I did a quick background check and a quick analysis. However ORG is more involved in the renewable energy space, so it might trade at a premium to good old *A*ustralian *G*as and *L*ighting company (AGL).


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## joeno (5 February 2021)

So_Cynical said:


> Read Smurfs 1st post above - pretty much explains what happening.
> --------------
> The wheel will turn and high prices return at some point, AGL and ORG seem to be very cyclical businesses as far as profit goes.
> 
> I'm thinking about taking a small loss on my recently acquired ORG shares and buying AGL ~ AGL is a better business - right?




Yes i get electricity spot prices are lower now. That's also what i'm confused about. Why is electricity low and that AGL is trading at 2005 levels? Given everyone's staying at home. Given their costs for generating electricity (through coal, hydro, solar etc) would be low and booming businesses in itself.

They have consistent strong cashflows. Unless they have management issues or losing market share i don't understand how this is not a great pick. They're not going bankrupt. So i'd imagine the margin of safety is huge.


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## sptrawler (5 February 2021)

@joeno producing electricity is a very expensive business, these companies have a lot of money tied up in assetts that nobody likes but everyone needs, so they are having to thrash them to death to keep the lights on.
Meanwhile renewable generation is being installed with no storage, so the renewables push the fossil fueled generators of line, but they have to come back on line when the sun goes down.
This causes thermal stress to machines and they arent on long enough to make money.
It is a similar situation to the car industry, everyone wants EVs but they also want to keep running their ICE car until it is worn out, so the car companies have to keep making parts, which they probably would love to get out of.
This transition period is  really hard for the established players, not so difficult for the new entrants with no fossil fueled baggage.lol
But the ranters and chanters dont give a rats about that, as long as they can keep ranting and chanting, common sense doesnt come into it.
The major players are going to have to write down their assetts and spend a whole lot of money replacing them, to maintain thier market share.
In reality the new entrants should be forced to install complimentary storage, when connecting these solar wind farms, it is the only way that it becomes a level playing field.
Only my opinion.


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## qldfrog (5 February 2021)

sptrawler said:


> @joeno producing electricity is a very expensive business, these companies have a lot of money tied up in assetts that nobody likes but everyone needs, so they are having to thrash them to death to keep the lights on.
> Meanwhile renewable generation is being installed with no storage, so the renewables push the fossil fueled generators of line, but they have to come back on line when the sun goes down.
> This causes thermal stress to machines and they arent on long enough to make money.
> It is a similar situation to the car industry, everyone wants EVs but they also want to keep running their ICE car until it is worn out, so the car companies have to keep making parts, which they probably would love to get out of.
> ...



And i believe it will happen after a few blackouts


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## So_Cynical (5 February 2021)

joeno said:


> They have consistent strong cashflows. Unless they have management issues or losing market share i don't understand how this is not a great pick. They're not going bankrupt. So i'd imagine the margin of safety is huge.




Exactly - AGL and ORG are great picks at the moment, markets turn and stocks go up and down, I would not hesitate to add AGL 
to my portfolio at current levels however I already have a sizable ORG position and dont like to double up, get over exposed.

Deep value is my thing and AGL is super appealing at the moment.


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## Clansman (5 February 2021)

So_Cynical said:


> Exactly - AGL and ORG are great picks at the moment, markets turn and stocks go up and down, I would not hesitate to add AGL
> to my portfolio at current levels however I already have a sizable ORG position and dont like to double up, get over exposed.
> 
> Deep value is my thing and AGL is super appealing at the moment.




ORG has never been a great company. It's difficult to get excited about a company that pays overs for WPL's hand me down.
Substitute APA for AGL and OSH for ORG and you will do far better in the long term, probably the medium and short term as well.


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## joeno (5 February 2021)

Clansman said:


> ORG has never been a great company. It's difficult to get excited about a company that pays overs for WPL's hand me down.
> Substitute APA for AGL and OSH for ORG and you will do far better in the long term, probably the medium and short term as well.




It's hard to get excited about stocks that may be able to deal with current problems within the industry somewhat better. But with far less attractive valuations - PE, growth, balance sheet.


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## Clansman (6 February 2021)

joeno said:


> It's hard to get excited about stocks that may be able to deal with current problems within the industry somewhat better. But with far less attractive valuations - PE, growth, balance sheet.




AGL and ORG were capital killers long before "current problems"  within the industry.
It's hard to envisage them doing anymore than reverting to type moving forward.


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## aus_trader (6 February 2021)

I thought these type of plain vanilla utility companies were just the type of thing you want in a dividend portfolio of blue chip stocks...


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## joeno (6 February 2021)

Clansman said:


> AGL and ORG were capital killers long before "current problems"  within the industry.
> It's hard to envisage them doing anymore than reverting to type moving forward.



Excuse my ignorance but how was AGL a huge capital killer - what metric are you basing that on? It's expenditures look fine. Cashflow fine. Reasonable debt levels. Around 10% margin on capital and on revenue.

I'm not seeing the metric for AGL that screams distress.

Understand the whole industry is in the gutters at the moment. But as is usual, things that go down will come up again. Especially as AGL has a moat in the Australian market, and is not being threatened by other companies using newer technology.


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## Smurf1976 (6 February 2021)

As a bit more information.....

AGL share price peaked in 2017 so I'll use that as the starting point.

For simplicity I'm using calendar years in order to get full years of data and as up to date as possible.

Following is for the entire National Electricity Market (NEM) taken as a whole. That is the main physical power system covering Queensland, NSW, ACT, Victoria, Tasmania and SA.

Note that Mt Isa and surrounds in Qld have a physically separate system not part of the NEM and various small outback towns also have their own diesel generators etc. All other major loads are part of it though - Broken Hill is on the main grid yes.

Total consumption from all sources and produced by all generation owners:

2017: 199,912 GWh at an average market price of $103.09 / MWh ($103,090.00 per GWh) = $20.6 billion

2018: 203,372 GWh at average $85.46 / MWh = $17.38 billion

2019: 204,474 GWh at an average $93.24 / MWh = $19.06 billion

2020: 202,146 GWh at an average $54.81 / MWh = $11.08 billion

So the physical consumption of electricity has dropped slightly, the causes being the La Nina weather phenomenon (a known, definite issue) and most likely some effects due to the pandemic also. Consumption fell in every NEM state except Tasmania which increased slightly.

So electricity generation as an industry has seen revenue fall in a heap, that's the crux of it.

Why?

There's a few factors:

Small solar system owners (households etc) don't respond to prices at all, they run when the sun shines. Output across the NEM by year as follows:

2017 = 6215 GWh
2018 = 8203 GWh
2019 = 10,654 GWh
2020 = 13,040 GWh

Large scale solar farms, once built, have basically zero difference in cost whether operated or not so whilst they're commercial businesses (and AGL does have some involvement here) they do tend to ignore price so long as it stays above zero. Here's their output:

2017 = 631 GWh
2018 = 1871 GWh
2019 = 4953 GWh
2020 = 6479 GWh

Wind farms do have ongoing maintenance costs, since it's a mechanical device, but no fuel cost and thus still a very low marginal cost to operate versus not operating. Their output as follows:

2017 = 11,273 GWh
2018 = 14,298 GWh
2019 = 16,833 GWh
2020 = 19,599 GWh

Now to consolidate those figures into something that gets us closer to the point:

2017 = 18,119 GWh from wind and solar (9.1% of total supply) leaving 181,793 GWh from other sources (coal, gas and hydro mostly).

2018 = 24,372 GWh from wind and solar (12.0% of total) and 179,000 GWh from other sources.

2019 = 32,440 GWh from wind and solar (15.9% of total) and 172,034 GWh from other sources.

2020 = 39,118 GWh from wind and solar (19.4% of total) and 163,028 GWh from other sources.

Meanwhile at the same time:

Energy Australia have overcome previous constraints on the supply of coal to Mt Piper power station. When coal supply was a problem they'd have been holding back supply, bidding higher prices since they simply couldn't run the plant too often. Now that's sorted, they can sensibly run at any price which exceeds the actual marginal cost of operating versus not operating. This facility is located in NSW and in practice is a partial direct competitor to AGL's operations in that state - with EA now active at lower prices than they'd have considered previously due to removal of that volume constraint on their operations.

The pandemic brought about a collapse in oil prices which remain relatively low (though rising) today. Whilst oil is a minor source of generation, well under 1%, a significant capacity does exist to use it with some in all states (including some owned by AGL). That threat, that oil-fired generation is now able to operate at a significantly lower price than previously, keeps a lid on the prices other generators (eg coal, gas, hydro) can bid into the market without losing market share.

Note there that pricing intervals are 30 minutes so when I say losing market share if they price too high that would happen pretty much immediately, we're not talking about some hypothetical scenario that takes a year to unfold here.

Gas prices also have come down very significantly from their highs a few years ago with a roughly 50% drop at the wholesale spot price level.

That's a bigger threat than oil since there's a lot of gas-fired generating capacity that, whilst normally run during demand peaks only, most certainly can operate constantly from a technical perspective indeed there's only two that can't (and one of those is due to regulation not an actual technical constraint). That someone can fire up a gas turbine, and have the plant at full load in less than half an hour from cold, at a price circa $60 per MWh, is a very definite gun pointed straight at the heads of coal and hydro operators as to what prices they can bid.

There's also an issue in that some other operators of coal-fired generation have pursued an aggressive volume strategy, running flat out even when prices have gone negative as they have at times. It's not illegal, the market rules do permit negative prices, but it's a strategy which has raised some eyebrows. Not only is this strategy taking volume from rivals, of itself it directly depresses prices.

Then there's the politics of it all and by that I mean politics as such (government) and anything else that could be described in that terms. Heavy industry in particular has been very vocal that the price levels seen during the 2017 - 2019 period are unacceptably high and will not be paid on an ongoing basis - they'll walk away and go offshore rather than pay that much.

Which brings me to another points - government has stepped into the retail (consumer) electricity market with mandated Default Market Offer for consumers in SA, NSW and south-east Queensland meanwhile the same has been done in Victoria by a different legislative means. That's effectively the entire customer base so far as AGL is concerned.

The DMO isn't a price cap but in practice it is - no consumer is likely to sign up to a market offer that's priced higher than the one they must be also offered as per the law. So not technically a price cap but it's a de facto one in practice.

Another issue is Feed-In Tariffs (FIT), that being the price paid to the owners of very small generation systems (in practice, rooftop solar) for what they feed into the network. In most states prices are set by the market but, and here's the problem, are in practice sitting above actual value of that energy versus buying from a large scale generator. Retailers do that to attract customers, it's a loss leader, but nonetheless unprofitable as such.

A bigger issue is Victoria where the law sets a minimum FIT of 10.2 cents per kWh ($102 per MWh) for this financial year. That compares with 2020-21 financial year to date spot market value of this generation of just $26.16 / MWh and of all Victorian supply of $47.16 (the difference being due to the reality that there's enough solar to be flooding the market on mild sunny days, often sending spot prices below zero around midday).

So overall it's a situation of:

Stagnant total volume, the weather and pandemic having turned small growth into small decline year on year.

Continued strong growth in output from price-insensitive generators (wind and solar) who'll mostly run regardless. That means diminishing volume for everyone else as a whole.

Whilst they normally operate only for peak demand and backup, a large drop in fuel costs for oil and gas-fired generation means they're now a far more aggressive competitor on price against other generation sources.

Some coal-fired generation operators have pursued volume aggressively, regardless of price.

Government and big business have both made it extremely clear that prices at the 2017 - 2019 level are unacceptable and shall not continue. That's a "political" aspect and puts pressure on AGL and other companies to reign in pricing or face the longer term consequences (eg regulation) if they don't.

Government has actually stepped in with retail pricing in NSW, SA, Vic and SE Qld and with FIT rates in Vic.

So all that's pretty much the perfect storm for AGL.

So will the situation persist?

In my opinion, no it won't.

*Oil price seems unsustainable at this level since a higher than current level of drilling activity (globally) is required in order to sustain even flat production rates. Higher oil prices raise the price at which oil-fired generation can compete profitably in the market.

*Gas price also seems unsustainably low at this level. Higher gas prices raise the price at which gas-fired generation can profitably operate noting that, other than in SA, AGL isn't a major operator of gas-fired generation but is instead focused on coal and renewables both of which gain from a reduction of the pricing threat posed by oil and gas-fired generation (except SA where AGL is the largest operator of gas-fired plant but suffice to say NSW and Vic are far larger markets for the company than SA).

*Closure of AGL's Liddell (NSW) power station progressively in 2022 and 2023 removes some supply from the market. AGL is also closing the remaining two (of originally four) generating units at Torrens Island A station (SA) in 2021 and 2022 whilst Origin has announced closure of Osborne (SA) at the end of calendar year 2023. That takes some supply out.

*Other operators of coal-fired generation presumably won't pursue volume regardless of price indefinitely. At some point they run out of money or a political storm erupts over it and they back off.

*La Nina weather phenomenon is a cyclic occurrence and won't persist indefinitely.

*Pandemic presumably won't persist indefinitely.

*There's growing momentum in society to transfer energy load at the point of use to electricity. That is particularly the case for cars and for every EV sold, that's a change from petrol / diesel (which companies like AGL don't sell) to electricity which either AGL or a direct competitor will be selling - even if a competitor sells it AGL may still gain generation volume or at least higher generation price (supply and demand economics there).

*The various battery storage projects proposed by several companies (including AGL) will provide a buy low / sell high trading opportunity and tend to eliminate short duration periods of very low, even negative, spot pricing currently being experienced.

*The bulk storage hydro projects being built by Snowy Hydro (Australian Government owned) and proposed by Hydro Tasmania (Tasmanian state government owned) will even out pricing over longer periods. Whilst to some extent they're a competitor, in the main they work with batteries, wind and solar owned by others (including AGL) not against them. So long as AGL and others approach it the right way, government-owned companies storing electricity generated by others (including that generated by AGL) is a change in business but not something that puts them out of business.

*AGL has a major (in both company terms and overall whole of industry terms) proposal for an LNG import terminal located in Victoria. If it goes ahead then that's a significant business change and growth opportunity for AGL. I'll caution however that the proposal is controversial so approval isn't a given.

I'll add to that an observation that AGL is physically hoarding energy resources at present. The company's gas (LNG) storage in NSW is presently 64% full and currently being filled at maximum filling rate - if that continues then it's about 50 days away from being 100% full.

For AGL's hydro storages, Rocky Valley Dam (headwater storage for the Mackay, Bogong, Clover and West Kiewa stations in Victoria) is close to full at present.

AGL has less direct control over storages other than Rocky Valley, due to a requirement to release some water for irrigation use (a requirement that stands by law whether or not it suits AGL to do so) but storage is nonetheless building up at Dartmouth (62% full) and Lake Eildon (64%).

Others are doing much the same too. It's no secret in the industry that Hydro Tasmania has been enthusiastically buying from the market, thus holding back its own hydro-electric generation for future use, over the past 6 months or so. A classic "buy low, sell high" strategy albeit one involving physical delivery.

Others are also storing physical energy commodities. Not all, some companies aren't, but certainly some are - the Iona gas storage (non-AGL owned) has been filled to 90% now and there's more gas being put into it daily.

So there's quite a few who are betting on higher prices ahead by means of storing resources while they're cheap. Either buying fuel and storing it, or holding back that which falls naturally from the sky but either way it's a case of physical hoarding of the raw materials for power generation.


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## Smurf1976 (6 February 2021)

Comparing AGL with Origin Energy:

*Similarities:*

Both own coal-fired generation in NSW using coal purchased from unrelated mining companies.

Both generate small volumes from gas in Victoria (though Origin is the larger of the two).

They are the two largest operators of gas-fired generation in SA.

Both have gas and electricity retail businesses covering SE Qld, NSW, Vic, SA and some less significant operations elsewhere.

Both have wind and solar generation under contract from others.

*Differences:*

AGL owns a coal mine and coal power station in Victoria which supplies all of AGL's coal in that state and also supplies coal to another electricity company.

AGL owns a gas storage facility in NSW.

AGL generates more electricity than it sells via its retail operations whereas Origin sells more than it generates.

Origin is heavily involved in oil and gas production and LNG liquefaction for export (from Queensland) which AGL has no significant presence in (very minor activities only).

AGL has a proposed LNG _import_ terminal in Victoria.

Origin physically distributes bulk and retail LPG nationally including in areas where the company has no other operations. Origin's association with LPG is absolute in many regional areas. LPG = Origin and Origin = LPG in the minds of many.

Origin's hydro operations are confined to a single pumped storage scheme in NSW. AGL's hydro operations are based on natural inflows, not pumping, and located in Victoria.

Historic = AGL is one of the oldest companies operating in Australia, being historically a monopoly gas supplier to much of Sydney dating back to 1837 and a quasi-governmental albeit shareholder entity for much of that time until its more recent transformation.

Origin was split off from Boral after Boral had purchased over many years an assortment of previously unrelated gas companies - networks, retail and gas production. The oldest predecessor company being the Launceston Gas Company formed in 1857 and acquired by Boral during the early 1980's although that wasn't Boral's first venture into the gas industry, just the oldest company they bought out.

Comment - Note that I've deliberately avoided direct mention of company share prices here. That's intentional on my part - I'll leave others to form that view, I'm just sticking to the fundamental stuff and the actual business.

Ultimately though - grid electricity is here to stay and as society seeks to transition away from fossil fuels, demand for electricity, regardless of how it's produced or by whom, is ultimately going to go up not down over the longer term. Renewable sources produce electricity, they don't produce petrol, and electricity's what we're going to be using.

Any move to bring back production of goods to Australia, and there seems to be at least some push in that direction, will likewise use at least some amount of electricity that otherwise wouldn't have been used.

The challenge for companies like AGL is positioning themselves correctly to benefit from all that but the business itself isn't dead, it's not like video rentals or anything like that.


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## Value Collector (6 February 2021)

Smurf1976 said:


> As a bit more information.....
> 
> AGL share price peaked in 2017 so I'll use that as the starting point.
> 
> ...



Hi smurf,

When it comes to small scale solar, do your figures include the electricity that is used within the households where they are produced, or is that figure just what is exported to the grid.

Also, when it comes to feed in tariffs, is it possible that it makes sense for retailers to pay a bit more than market price for the electricity because it is being produced nearby where it is being consumed, so there may be less transmission losses and less transmission costs than if they purchased the power from a generator much further away.

what I mean by that is when my solar I feed in enters the grid, it would often be consumed by the houses and businesses nearby, in fact some of it is actually consumed by my own hot water system which is on the off peak circuit producing a 2 cent profit for agl on my production that didn’t even leave my building.


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## Clansman (6 February 2021)

joeno said:


> Excuse my ignorance but how was AGL a huge capital killer - what metric are you basing that on? It's expenditures look fine. Cashflow fine. Reasonable debt levels. Around 10% margin on capital and on revenue.
> 
> I'm not seeing the metric for AGL that screams distress.
> 
> Understand the whole industry is in the gutters at the moment. But as is usual, things that go down will come up again. Especially as AGL has a moat in the Australian market, and is not being threatened by other companies using newer technology.




You obviously don't understand investing. A capital killer is a company that takes your capital and kills it.
Regarding a moat in  the Australian market, a company with a moat doesn't go from nearly $27 to $11 in 4 years.


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## Clansman (6 February 2021)

joeno said:


> Excuse my ignorance but how was AGL a huge capital killer - what metric are you basing that on? It's expenditures look fine. Cashflow fine. Reasonable debt levels. Around 10% margin on capital and on revenue.
> 
> I'm not seeing the metric for AGL that screams distress.
> 
> Understand the whole industry is in the gutters at the moment. But as is usual, things that go down will come up again. Especially as AGL has a moat in the Australian market, and is not being threatened by other companies using newer technology.




BTW it wasn't me that used the term huge, but you are right, it is a huge capital killer.


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## joeno (6 February 2021)

Clansman said:


> You obviously don't understand investing. A capital killer is a company that takes your capital and kills it.
> Regarding a moat in  the Australian market, a company with a moat doesn't go from nearly $27 to $11 in 4 years.




Oh so AGL's reported huge losses. I didn't know that.

Oh so declining value of share price means there's no moat. I didn't know that.

Thanks for the lesson in investing


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## Clansman (6 February 2021)

joeno said:


> Oh so AGL's reported huge losses. I didn't know that.
> 
> Oh so declining value of share price means there's no moat. I didn't know that.
> 
> Thanks for the lesson in investing




Let me know when you're ready for lesson number 2.


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## Clansman (6 February 2021)

joeno said:


> Oh so AGL's reported huge losses. I didn't know that.
> 
> Oh so declining value of share price means there's no moat. I didn't know that.
> 
> Thanks for the lesson in investing




We get that you want people to buy it so you can get your money back but the investment world doesn't work like that.
You could always change tack and try and talk people into buying it for +8% dividend yield but even that is a bit questionable and sadly its' unfranked until 2023. It still might be a hard ask considering anybody who purchased at any time in the past 12 years would be down on their investment.
The -42% 12 month return on the SP might be hard to get over the line though. Failing that you could always tell them it has a moat but say it louder.


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## Smurf1976 (6 February 2021)

Value Collector said:


> When it comes to small scale solar, do your figures include the electricity that is used within the households where they are produced, or is that figure just what is exported to the grid.



The figures are based on sample data from real systems and scaled up to the total installed base of systems. What's being measured is system output regardless of whether it's used in the house or exported to the grid.

Total installed capacity is known with a reasonable degree of accuracy since every state mandated that such data be collected right from the start and it's easy to identify non-working systems - just flag all the properties with zero exports to the grid over the past 12 months (some retailers are now sending out notices to such properties to advise the owner that their system is faulty, others ignore it).

So it's not a direct measurement but it's considered to be accurate enough in practice. It's done that way since there's no direct measurement installed in the majority of cases.

Sites such as the OpenNEM and NEM Watch do have that data publicly available in real time - "Small Solar" is the term used to refer to it with "Large Solar" meaning commercially operated solar farms.


Value Collector said:


> Also, when it comes to feed in tariffs, is it possible that it makes sense for retailers to pay a bit more than market price for the electricity because it is being produced nearby where it is being consumed, so there may be less transmission losses and less transmission costs than if they purchased the power from a generator much further away.



A bit more yes but not to the extent they're actually paying.

How much is lost between a large power station and consumers is very much an "it depends" situation. It'll differ for each customer, eg city versus middle of nowhere with the latter being higher, and will also change with system load and even temperature (that comes down to physics....).

As a generic answer though, for small (residential) users the average is in the order of 10% loss from power station to your home but that will vary. Generally lower in densely populated urban areas, can go seriously high in % terms if you really are at the end of the line in the middle of nowhere. 

That the retailers are paying far more than 10% above the "real" value of that electricity is basically just marketing (except in Victoria where government mandates it and all retailers have the same situation).

It's no different to Coles selling a few products in the shop at a loss so as to bring customers in most of whom will then buy a lot of other things at full price. In the case of the electricity retailers, they're still getting the daily supply charge and they're still in most cases selling some electricity to the consumer - and if you look closely then the price charged on any "high FIT" plan will almost always involve the price for electricity supplied from the grid also being jacked up.

It's the kind of thing that leaves engineers and others on the technical side of the industry slightly perplexed but those on the marketing side say "leave this part to us" and they seem to be right. Even though the customer would pay the exact same bill with a lower FIT and a lower price for electricity supplied by the company from the grid, the approach that tends to occur to engineers and so on as being logical, the marketing people are correct that the high FIT seems to work pretty well to get customers signed up. A nice big number there gets customers to sign up with whoever's offering it rather than signing up with someone else which from a business perspective is the aim.

It's also good public relations for the company - "look see, we're supporting solar and paying big $". In the context of the politics surrounding the industry there's a value in that aspect of it that's hard to quantify but it's definitely there. Senior management will tend to see it as a wise move for that reason - the actual $ cost isn't huge in overall terms and there's that intangible but definitely real aspect to it.


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## Smurf1976 (6 February 2021)

In an effort to explain the volatility of the wholesale electricity market into which AGL is a net supplier, here's a price and volume chart for Victoria:







Source = Australian Energy Market Operator.

Green is volume with scale on the right, purple is price with scale on the left.

Note that volume includes all large scale supply sources only. That is, it *does not include rooftop solar* but does include solar farms and wind farms, coal, gas, hydro etc. It's volume as seen by the industry, ignoring that generated by consumers.

Price is currently negative yes.

Note the vertical line which separates past from forecast.

Much the same does occur in all states but Victoria's a very good example of how low prices can go - a combination of strong wind generation, being a weekend (demand's always lower on a weekend) and that the temperature's mild (basically no heating or cooling use) is the "perfect storm" hence the negative prices. Same can and does occur elsewhere from time to time, Victoria's just a good example right now.

Short term, AGL won't be much exposed to that immediately due to contract arrangements but ultimately contracts for anything are influenced by spot prices over the longer term. Nobody's going to contract something at a price radically different to spot, there's some linkage.

That it is so volatile does of course bring benefits to the likes of AGL. Small, independent owners of wind farms, solar farms and on would much prefer to contract a fixed price with AGL, Origin etc than to be directly in the market themselves. The key for AGL etc there is negotiating a price that does indeed end up reflecting future market value - as per their recent announcement that hasn't worked out too well with some of the past deals.


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## sptrawler (6 February 2021)

Smurf1976 said:


> Much the same does occur in all states but Victoria's a very good example of how low prices can go - a combination of strong wind generation, being a weekend (demand's always lower on a weekend) and that the temperature's mild (basically no heating or cooling use) is the "perfect storm" hence the negative prices. Same can and does occur elsewhere from time to time, Victoria's just a good example right now.



Digressing slightly, but that is the perfect time for mega capacity pumped storage, which most private companies don't have the ability to install due to cost and available land. Therefore the taxpayer will have to fund it.
Which goes back to the other thread " The future of energy generation and storage thread", where we have discussed this.
The 'grid' is a hugely complex and interconnected  system, that is going through it's biggest change since its inception, the problems are huge the consequences of stuffing up are huge and it is something that can't be rushed.
Unfortunately I don't think many understand the ramifications.

AGL, Origin and all the others IMO are going to have to accept that their will be a lot of pain, before there is a lot of gain, there are a lot of fringe dwellers in the BEV sector wanting taxpayer incentives as well.
The problem is the tax payer can only afford to be taxed so much, they can't subsidies everyone, because in the end it just means more job losses due to higher wages.
Just my opinion.


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## qldfrog (7 February 2021)

A lot of good information, pressure on the market etc but just want to bring everything back to:
At current price, is it a buy.?

Just remember that Philip Morris post gfc went from $37 to $120 8 years later, while paying dividends..
cigarette making businesses, fewer and fewer smokers, lawsuits, vape competing tech etc etc
I find this very similar to dirty emitting power stations and relevant to agl,adding economic cycle in the mix

But overall it ends up to: what is the current price. Invest or not
Yes EV are future but tesla sp is lunacy.can it tripple from now and stay there in 10y.no way.a black tulip episode.
agl is the opposite in my view. similarly except for their pension fund liability, i would prefer investing in GM or Ford than Tesla, even to make EV...at the current SP

I nevertheless respect the narrative power as in zoom tesla etc i own BTC   but that is another part of my portfolio.
IN a more generic way,in boom bubble  peak, isn't it the oerfect time to invest in the black ducks.

Agl is just BTW one among many in this situation,ORG,WHC maybe,GM, meat producers,big pharma etc etc a narrative contrarian approach


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## Dark1975 (7 February 2021)

AGL - 7.22 p/e  ,Dividends - 8.15 (80 % franked)
With well over 4 million customers, Strong R.O.I !
Whats' s not to like here ?


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## Austwide (7 February 2021)

As it stands the fall from $16.50 to $11.50 over the last 6 months.

If the hammer on the 4th feb signals the start of a reversal and gets confirmed, then the SMSF would be in.


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## Clansman (7 February 2021)

Dark1975 said:


> AGL - 7.22 p/e  ,Dividends - 8.15 (80 % franked)
> With well over 4 million customers, Strong R.O.I !
> Whats' s not to like here .




AGL has  fallen through a long term support level at $13. Investors aren't convinced at all. A company with a narrow moat that is getting narrower. The increasing probability of  requiring restructuring in order to survive .
What's not to like here?  Plenty


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## joeno (7 February 2021)

sptrawler said:


> AGL, Origin and all the others IMO are going to have to accept that their will be a lot of pain, before there is a lot of gain, there are a lot of fringe dwellers in the BEV sector wanting taxpayer incentives as well.




Buy cheap when there's pain. Reap rewards when there's gain.

Usually it works better than waiting until stocks have recovered from any short term hiccups and realised a higher growth forecast.


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## Dark1975 (8 February 2021)

My response would be the same @ 2.25 sec on this clip, explained by a better man 😉


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## qldfrog (8 February 2021)

Smurf1976 said:


> The figures are based on sample data from real systems and scaled up to the total installed base of systems. What's being measured is system output regardless of whether it's used in the house or exported to the grid.
> 
> Total installed capacity is known with a reasonable degree of accuracy since every state mandated that such data be collected right from the start and it's easy to identify non-working systems - just flag all the properties with zero exports to the grid over the past 12 months (some retailers are now sending out notices to such properties to advise the owner that their system is faulty, others ignore it).
> 
> ...



Sorry mr @Smurf1976 , this was stuck and not posted You miss one point in the equation i think: a fixed sunshine or rain FIT daily fee.never talked much about,
which ensure that exporting roughly 3x what i consume from the grid, i still pay $100 or so dollars a quarter.
Pure profit for the retailers.


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## qldfrog (8 February 2021)

Dark1975 said:


> My response would be the same @ 2.25 sec on this clip, explained by a better man 😉



Mr @Dark1975 , i am afraid i just see the screen shot with no link to the interview.
what is the YouTube link if you could?


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## qldfrog (8 February 2021)

qldfrog said:


> Mr @Dark1975 , i am afraid i just see the screen shot with no link to the interview.
> what is the YouTube link if you could?



Got it


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## Dark1975 (11 February 2021)

qldfrog said:


> Got it




Thank you Mr Frog 😘


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## sptrawler (15 February 2021)

Dark1975 said:


> AGL - 7.22 p/e  ,Dividends - 8.15 (80 % franked)
> With well over 4 million customers, Strong R.O.I !
> Whats' s not to like here ?






joeno said:


> Buy cheap when there's pain. Reap rewards when there's gain.
> 
> Usually it works better than waiting until stocks have recovered from any short term hiccups and realised a higher growth forecast.



This appears to be a fairly balanced article on AGL and Origin, worth a read if you are interested in either company and seems to say what we on here are saying.








						Neither AGL nor Origin have convinced investors they have a future
					

AGL and Origin have failed to really embrace decarbonisation as opportunity. They have chosen to ignore the low cost of wind and solar for the supply of bulk energy.




					reneweconomy.com.au


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## qldfrog (15 February 2021)

sptrawler said:


> This appears to be a fairly balanced article on AGL and Origin, worth a read if you are interested in either company and seems to say what we on here are saying.
> 
> 
> 
> ...



I think this is the BS woke arguments
The reason AGL is taking a couple of billion of asset losses this year is :
Drum rounds
Wind farms.
.Shareholders can only pray agl had NOT invested in green energy as much, they eould be a couple billions better off.
this is clear for anyone even browsing the summary report..but hey when narrative is king, who cares anout facts then i noticed the newspaper origin...
and i actually subscribed to Renew...


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## sptrawler (15 February 2021)

qldfrog said:


> I think this is the BS woke arguments
> The reason AGL is taking a couple of billion of asset losses this year is :
> Drum rounds
> Wind farms.
> ...



Whether the push toward renewables, is right or wrong doesn't seem to come into it anymore, most have just given in so it will happen regardless. IMO
Unless Origin and AGL spend big into alternatives, IMO they will just lose more and more market share. 
Like I've said before, all these renewable generators should be made to install complimentary storage at the design stage, at the moment it isn't a level playing field .
Just my opinion.


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## Ferret (15 February 2021)

I think the market is looking after the installation of storage.  AGL are certainly  investing in it already, as are Origin and others.

My simple take on it is that storage is going to be the high margin end of the electricity supply business.  

Coal generation runs 24/7 so sells at high and low wholesale prices. 

Solar and wind run according to the weather.  As they grow to be the dominant sources of energy, they will see most of there production sold when supply is high and price is low.  Ignoring spikes in demand, price will only be high when solar and wind production is low.

Gas generation can reap the benefits of high prices when wind and solar production are low, but its production costs are high.

Storage is the winner as it saves the energy when it is cheap and then sells it when the price is high.  I'm ignoring the capital cost of storage, but certainly batteries are falling fast.


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## Smurf1976 (15 February 2021)

Ferret said:


> I think the market is looking after the installation of storage.  AGL are certainly  investing in it already, as are Origin and others.
> 
> My simple take on it is that storage is going to be the high margin end of the electricity supply business.
> 
> ...



Agreed with all you've said, just expanding on a couple of points...   

Coal runs constantly but it's more flexible than the general public seems to grasp. It depends on the facility in question but short answer is plant in the NEM has a lower limit that's between 30% and 70% of capacity. Detail varies between facilities. That's the point it can come down to easily and on a routine basis if required. Can go lower with difficulty.

Solar and wind already have the issue of flooding the market and depressing price, it's happening now and in Vic and SA in particular not unusual to see the price go negative. Data for the entire system (excl WA and NT) as follows.

Average spot price value of output. All figures in $ per megawatt hour:

Rooftop solar = $31.98 
Wind = $34.30
Large scale solar = $35.51
Biomass = $38.84

Coal = $44.78
Battery discharging = $51.77
Hydro = $52.79
Gas = $54.90
Oil = $198.37

Energy used for battery charging = $12.52

Note those are market spot prices and are not directly linked to actual production costs. That said, wind is pretty cheap and diesel's pretty expensive yes but still, that's market pricing not cost of production I'm quoting.

So yes, plant which operates when the weather is suitable or which must run to dispose of the biomass waste achieves a lower value in the market than more flexible forms of generation. 

AGL has a presence in all of the above except rooftop solar which by its nature is owned by households etc. That said, many of those would be AGL customers anyway.

Above figures are 12 months to Sunday 14 February 2021 and are for the entire National Electricity Market treated as a whole - adding up the totals and averaging the prices across multiple states.

Further to the above, I'll note that AGL does own and operate physical infrastructure that's critical in three states with all that entails. If the company ever did run into real trouble financially, ultimately multiple state governments of both persuasions and the federal government can't afford it to fail.


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## qldfrog (15 February 2021)

sptrawler said:


> Whether the push toward renewables, is right or wrong doesn't seem to come into it anymore, most have just given in so it will happen regardless. IMO
> Unless Origin and AGL spend big into alternatives, IMO they will just lose more and more market share.
> Like I've said before, all these renewable generators should be made to install complimentary storage at the design stage, at the moment it isn't a level playing field .
> Just my opinion.



generating green energy is a loss making business, as per agl and all these sun farms producing negative price energy.
Mr Smurf gave us plenty of knowledge there, Yes green energy is here and is hurting the AGL Origin etc of this world, no denial, and yes it is here to stay and THIS IS GOOD!
Where I am ranting on is the dumb and dummer article : "they should invest in green energy ", this part is a money pit.AGL billions of losses this year is due to the fact they invested in wind farms FFS.
Build turbines and solar panels if you can be competitive with China and India ROL but the business of installing these and trying to make a living wo subsidies is a lost war at the current stage in Australia.No surprice infigen was sold BTW...I owned IFN.


----------



## Clansman (16 February 2021)

Smurf1976 said:


> Agreed with all you've said, just expanding on a couple of points...
> 
> Coal runs constantly but it's more flexible than the general public seems to grasp. It depends on the facility in question but short answer is plant in the NEM has a lower limit that's between 30% and 70% of capacity. Detail varies between facilities. That's the point it can come down to easily and on a routine basis if required. Can go lower with difficulty.
> 
> ...




Your last sentence isn't correct. Ultimately multiple state governments of both persuasions and the federal government can afford it to fail, in its current form.  Therein lies the problem, the greater market believes that there is greater certainty in AGL not surviving in its current form and doesn't want to be exposed to the uncertainty of that outcome.


----------



## sptrawler (16 February 2021)

Clansman said:


> Your last sentence isn't correct. Ultimately multiple state governments of both persuasions and the federal government can afford it to fail, in its current form.  Therein lies the problem, the greater market believes that there is greater certainty in AGL not surviving in its current form and doesn't want to be exposed to the uncertainty of that outcome.



I personally think the situation with AGL, is a similar situation to that, which the car industry finds itself in.
The car manufacturers have to continue making and servicing ICE vehicles as a public service and to make money, while also developing a BEV product, the BEV manufacturers are at an advantage because they only have to supply the one product and are only affected by uptake and production ramp up.

In AGL's situation, they still have to supply dispatchable power and keep the fossil fueled generation going as a public service and to make money, while at the same time transitioning toward renewables.
The companies supplying the renewable generation, are only limited by the price they get for their generation which if they install storage overcomes that issue and puts further pressure on AGL's equipment and bottom line.
I can see many car manufacturers either merging or going out of business, the same applies to power generation companies IMO.
But as Smurf has already mentioned the major fossil fueled generators are a quasi public service, until an adequate reliable amount of renewables and storage is installed, to allow the fossil fueled generators to be retired.
Whether AGL can make bumper profits in that environment, is where the questions are being asked.
Just my opinion.


----------



## qldfrog (16 February 2021)

sptrawler said:


> I personally think the situation with AGL, is a similar situation to that, which the car industry finds itself in.
> The car manufacturers have to continue making and servicing ICE vehicles as a public service and to make money, while also developing a BEV product, the BEV manufacturers are at an advantage because they only have to supply the one product and are only affected by uptake and production ramp up.
> 
> In AGL's situation, they still have to supply dispatchable power and keep the fossil fueled generation going as a public service and to make money, while at the same time transitioning toward renewables.
> ...



I think also that the missing point is that even if profit is reduced, the PE is important.
People are ok to pay PE which make no sense because tomorrow someone else will pay even more .that is a bubble definition.
With agl, it is the same in reverse.
Who cares about dividends if doom and  gloom slash 10pc of the SP except that the dividend cheque will be real vs imagined for the tesla.
As i already said, cigarette makers shares did a killing in a dying, litigation prone world because the narrative went too far 20y or so ago 
I suspect that will be the same for the agl, GM and Fords of this world.like everything, it is a timing issue


----------



## qldfrog (16 February 2021)

qldfrog said:


> I think also that the missing point is that even if profit is reduced, the PE is important.
> People are ok to pay PE which make no sense because tomorrow someone else will pay even more .that is a bubble definition.
> With agl, it is the same in reverse.
> Who cares about dividends if doom and  gloom slash 10pc of the SP except that the dividend cheque will be real vs imagined for the tesla.
> ...



And maybe timing should be: wait for the next big power outage..ooohh but i then can not trade lol


----------



## Smurf1976 (16 February 2021)

Clansman said:


> Your last sentence isn't correct. Ultimately multiple state governments of both persuasions and the federal government can afford it to fail, in its current form



They can afford the company to fail as such but they can’t afford its physical operations to cease even briefly since in some cases there's simply no alternative option.

What that means for the company financially and investors I'll leave others to speculate upon but in the medium term at least the company owns assets that are critical to keeping the lights on. One way or another that's going to remain in operation and has tangible value.

Same goes for some of the others by the way. There's quite a few entities that own critical things that society and government can't afford to not have in constant operation. Of listed companies, APA and BHP both come immediately to mind but they're not the only ones.


----------



## sptrawler (16 February 2021)

qldfrog said:


> And maybe timing should be: wait for the next big power outage..ooohh but i then can not trade lol



As you say timing is of the essence, I personally can't see AGL not being there in 30 years time, they earn enough to replace obsolete plant.

I don't hold, but am watching.


----------



## Clansman (16 February 2021)

Smurf1976 said:


> They can afford the company to fail as such but they can’t afford its physical operations to cease even briefly since in some cases there's simply no alternative option.
> 
> What that means for the company financially and investors I'll leave others to speculate upon but in the medium term at least the company owns assets that are critical to keeping the lights on. One way or another that's going to remain in operation and has tangible value.
> 
> Same goes for some of the others by the way. There's quite a few entities that own critical things that society and government can't afford to not have in constant operation. Of listed companies, APA and BHP both come immediately to mind but they're not the only ones.




The company is what we are talking about, not the assets.  The company in its current form can fail long before the assets do.

APA and BHP are both far different beasts to AGL. APA has never not been well run in its format since listing more than 20 years ago.. BHP is now being run better than it ever has.


----------



## Smurf1976 (16 February 2021)

Clansman said:


> The company is what we are talking about, not the assets. The company in its current form can fail long before the assets do.



Agreed it can.

I'll tell you what though - give me some assets that a few million people literally depend on and I'll find a way to charge for their use.

If the business fails then that'll be due to management not because they ended up with no market for their product. They're more like a bank than, say, a chain of video rental shops.

Banks = the means of doing business has almost completely changed over the past 40 years and has shifted from a paper based model revolving around cash, cheques and having customers fill out paper forms to one which does most things electronically. The underlying business of taking deposits and providing loans hasn't gone away though, indeed the average consumer puts far more transactions through banks these days than they ever did using paper.

Video rentals = the entire concept has ceased to be relevant. No amount of technical evolution could retain a viable market for the idea of physical shopfronts renting out movies to consumers. The concept, itself a key symbol of technology and modernity within living memory, simply became obsolete and has now almost completely disappeared.

Electricity is more like banks - the methods of producing and using it are changing but the product itself is still as relevant as ever. For AGL to fail to adapt to that would be in the same category as if any of the major banks had failed to adapt to electronic banking. The failure would be due to management failing to adapt to new methods not because the underlying product ceased to be used.


----------



## Clansman (17 February 2021)

Smurf1976 said:


> Agreed it can.
> 
> I'll tell you what though - give me some assets that a few million people literally depend on and I'll find a way to charge for their use.
> 
> ...




Your comparison between AGL and the banking industry was about as accurate as comparing AGL to BHP or APA. Not accurate at all. Equally I could say that AGL's business model is more like that of AMP, ironically both these dinosaurs were founded around the same era.
If you have a product like electricity with a few million customers demanding less and less supply with a narrow moat and the same or greater costs of doing business, then its the same as any business in that situation, not just rental video stores.
It's a big call to say electricity is more like banks and another that is incorrect.. Which banks have lost more than + 60% of their share price in the past 4-5 years despite their own challenges?
You don't seem to understand the investment aspect. The assets don't matter at all. If the company is broken up which I believe it will be, then shareholders will be burnt. That perception and overall risk is reflected in the decline of the SP even prior to Covid. This is now a high risk play. Do you think AMP has sophisticated shareholders sitting around telling themselves " we still have assets"?


----------



## Clansman (19 February 2021)

Timberrrrrrrrrrrrr.


----------



## joeno (24 February 2021)

Clansman said:


> Your comparison between AGL and the banking industry was about as accurate as comparing AGL to BHP or APA. Not accurate at all. Equally I could say that AGL's business model is more like that of AMP, ironically both these dinosaurs were founded around the same era.
> If you have a product like electricity with a few million customers demanding less and less supply with a narrow moat and the same or greater costs of doing business, then its the same as any business in that situation, not just rental video stores.
> It's a big call to say electricity is more like banks and another that is incorrect.. Which banks have lost more than + 60% of their share price in the past 4-5 years despite their own challenges?
> You don't seem to understand the investment aspect. The assets don't matter at all. If the company is broken up which I believe it will be, then shareholders will be burnt. That perception and overall risk is reflected in the decline of the SP even prior to Covid. This is now a high risk play. Do you think AMP has sophisticated shareholders sitting around telling themselves " we still have assets"?




AMP is a worse company in almost every single way. Employees hated working there (glassdoor reviews). It's got no moat. Who even used / heard or someone buying an AMP product? Whereas everyone uses either AGL or Energy Australia. Totally different sector.


----------



## Clansman (24 February 2021)

joeno said:


> AMP is a worse company in almost every single way. Employees hated working there (glassdoor reviews). It's got no moat. Who even used / heard or someone buying an AMP product? Whereas everyone uses either AGL or Energy Australia. Totally different sector.




I never said it wasn't a totally different sector. AGL has far more in common with AMP than it does BHP or APA.
An increasingly narrowing moat, poor management and last but not least, the long term decline in share price which is the hallmark of all capital killers.


----------



## Clansman (24 February 2021)

joeno said:


> AMP is a worse company in almost every single way. Employees hated working there (glassdoor reviews). It's got no moat. Who even used / heard or someone buying an AMP product? Whereas everyone uses either AGL or Energy Australia. Totally different sector.




Whether AMP is a worse or better company in every single way than AGL is a truth or fiction that is yet to play out, however it's an unattractive and  unproductive way to be thinking about investing.  What is truth and has been for many years is that there is plenty of smart money and mum and dad investors that aren't willing to find out whether it is a worse or better company. The lowest share price for nearly 19 years is proof of that.


----------



## qldfrog (24 February 2021)

Clansman said:


> Whether AMP is a worse or better company in every single way than AGL is a truth or fiction that is yet to play out, however it's an unattractive and  unproductive way to be thinking about investing.  What is truth and has been for many years is that there is plenty of smart money and mum and dad investors that aren't willing to find out whether it is a worse or better company. The lowest share price for nearly 19 years is proof of that.



Will not contest that, but if you have a best pe around and a business which is still around in 10y, i would not discount that either


----------



## Clansman (24 February 2021)

qldfrog said:


> Will not contest that, but if you have a best pe around and a business which is still around in 10y, i would not discount that either




Try telling that story to the investors that have been around for the last 10 years?


----------



## sptrawler (24 February 2021)

Clansman said:


> I never said it wasn't a totally different sector. AGL has far more in common with AMP than it does BHP or APA.
> An increasingly narrowing moat, poor management and last but not least, the long term decline in share price which is the hallmark of all capital killers.



I haven't followed AGL and I must agree with you if your analysis of the management is correct, there have been many good companies go down due to poor management.
The situation AGL and Origin find themselves in at the moment, is very much like a lot of sectors including the financial sector, there is rapid change due to technological advancement.
Those that can adapt and manage the transition well will benefit, those that can't will go broke or be taken over.
It is happening in the power sector due to renewables, it is happening in the transport sector due to BEV's and H2, it is happening in the financial sector due to disruptive digital technology platforms like BNPL, bitcoin, blockchain etc.
The only thing that will see a company through, will be a very astute management team IMO.
Just my thoughts.


----------



## Smurf1976 (24 February 2021)

Comparing AGL with AMP:

AMP = Company that most Australians have heard of and which "does something with finance" but they're not really sure exactly what. The company's brand value has been trashed and there's no actual need for anyone to use anything they offer.

AGL = Owns medium term (~15 years is medium term in this context) critical infrastructure and reality is that no matter which electricity company you sign up with, if you're in NSW, SA or especially Victoria then AGL is involved with your physical supply chain.

If the company sinks then it'll be due to management alone is my point. The underlying industry is set for massive growth, best explained by pointing out that electricity has a 23% share of secondary energy, that is energy supplied to consumers, in NSW and it's 20% in SA and 17% in Victoria (Australian government statistics).

Everyone from progressive, and even conservative in many cases, governments through to the likes of Elon Musk and Bill Gates want that figure to be very much higher. We're heading into an increasingly electrified world, not one that involves continued dominance of oil and gas at the point of consumption.

If AGL somehow fails then it'll be a company-specific management problem that does it. There's certainly others in the industry quietly getting on with it and preparing for the future in a way that doesn't involve bashing heads with anyone.

That said, I certainly wouldn't deny that the company's former CEO wasn't at all helpful. It takes quite some doing to get everyone from the unions to the Liberal Party against you and the fallout from that sort of thing takes years to overcome. I mention politics since in this business it's inescapable, that's the reality of it, so no point trying to pretend otherwise.


----------



## qldfrog (24 February 2021)

Clansman said:


> Try telling that story to the investors that have been around for the last 10 years?



I doubt agl had among the best pe around 19y ago, luckily these investors went into hyped new renewable energy stocks ..i mean like..for the one which cost me money:
IFN wind power, GDY: hot rocks CCE (carnegy) wave power
See my point?
at least these investors still got some value in their shares and even dividends along, and that was during a maxi bull market
Dyor, you can try to be smarter in entries etc but i still value AGL as a buy and store away stock since in its $10 SP in the current stage iof the cycle.
Do not worry, my exposure is minimal and most of my investment is dynamic as per my trading system journal
But if i was in a buy and forget mood, AGL would be part of the mix, with banks a few BHP Rio gold silver wow and col,  and bonds/cash
i will stop my entries here.lets agree we disagree.i still value PE


----------



## Smurf1976 (24 February 2021)

The way I see it there are others with vastly inferior assets (higher cost to operate, in worse shape technically and with a less critical function and thus pricing power) and no real company brand value at the retail level. Despite that they're making money.

If AGL with better assets and a very well known retail brand name can't make money for shareholders over the medium term then something's wrong.


----------



## Clansman (24 February 2021)

Smurf1976 said:


> Comparing AGL with AMP:
> 
> AMP = Company that most Australians have heard of and which "does something with finance" but they're not really sure exactly what. The company's brand value has been trashed and there's no actual need for anyone to use anything they offer.
> 
> ...




15 years isn't medium term in any context.  It doesn't matter who is at fault if and when it sinks. No investor gets rich with a blame contingency as a plan.


----------



## Clansman (2 March 2021)

A scathing assessment of this woofer on Ausbiz's The Call yesterday. Not for the first time either. Ironically Mathan Somasundarum compared it to AMP ( worse ) and said he wouldn't be interested until he saw the first upgrade. Gaurav Sodhi was even more scathing.  There is not going to be an upgrade.  Gaurav valued their entire generation suite at zero and detailed that as a stand alone customer service retailing business, it is only worth even a fraction of its current market cap. A huge sell and the very definition of a value trap.


----------



## Clansman (2 March 2021)

Gaurav wrote this article nearly 7 years ago. He was absolutely on the money. 









						Electricity disrupted - Part 1
					

Since the GFC, European power utilities have fared worse than the continent's shaky banks. Gaurav Sodhi explains how solar power has disrupted the power sector. Find out more at Intelligent Investor.




					www.intelligentinvestor.com.au
				












						Electricity disrupted - Part 2
					

The venerable electricity business has become vulnerable. We examine the impact on AGL, Origin, Spark, SP Ausnet and their smaller competitors. Find out more at Intelligent Investor.




					www.intelligentinvestor.com.au


----------



## sptrawler (2 March 2021)

Clansman said:


> Gaurav wrote this article nearly 7 years ago. He was absolutely on the money.
> 
> 
> 
> ...



IMO and it is only my opinion, the main problem the major generators have is their competition are in reality passive generator, once it is built the upkeep is minimal.
This gives the renewables a massive ongoing advantage as well as minimal regulatory costs, apart from upgrading the front end technology occasionally as the regulator requires it.
Another problem the thermal generators have is, they have to keep the lights on and are getting less and less for doing so.
Like I stated earlier, as with motor vehicle manufacturing, they have to accept the reality and transition while they have a customer base and are making money.
The opportunity wont last forever and the last thing I would be doing, is hoping the problem is going to go away.

I don't hold any elect utility shares.


----------



## qldfrog (2 March 2021)

sptrawler said:


> IMO and it is only my opinion, the main problem the major generators have is their competition are in reality passive generator, once it is built the upkeep is minimal.
> This gives the renewables a massive ongoing advantage as well as minimal regulatory costs, apart from upgrading the front end technology occasionally as the regulator requires it.
> Another problem the thermal generators have is, they have to keep the lights on and are getting less and less for doing so.
> Like I stated earlier, as with motor vehicle manufacturing, they have to accept the reality and transition while they have a customer base and are making money.
> ...



On a cynical commercial side, agl and other should and will let all maintenance and upkeep go down, then when people are actually all upset after oldies dying like flies in the bext heat wave and matching blackout just say: go and put more windmills, look we are 0 carbon business in 2030, don t blame us, and then they will get proper pricing for their base load.


----------



## qldfrog (2 March 2021)

for the irony of it, AGL on of my only green today LOL


----------



## qldfrog (2 March 2021)

qldfrog said:


> for the irony of it, AGL on of my only green today LOL



One of


----------



## Clansman (2 March 2021)

qldfrog said:


> On a cynical commercial side, agl and other should and will let all maintenance and upkeep go down, then when people are actually all upset after oldies dying like flies in the bext heat wave and matching blackout just say: go and put more windmills, look we are 0 carbon business in 2030, don t blame us, and then they will get proper pricing for their base load.




That diatribe is symptomatic of a person who had the opportunity to avoid this Kodak moment but didn't. Now you want the stars to align to fix the problem. Investing doesn't work like that.


----------



## Smurf1976 (2 March 2021)

qldfrog said:


> On a cynical commercial side, agl and other should and will let all maintenance and upkeep go down, then when people are actually all upset after oldies dying like flies in the bext heat wave and matching blackout just say: go and put more windmills, look we are 0 carbon business in 2030, don t blame us, and then they will get proper pricing for their base load.



There's really two categories of operators in the industry:

Gentailers who own firm generating capacity and a retail business.

"Pure" generators or retailers who do one or the other but not both.

The latter are ultimately either exposed to the spot market, are reliant upon some form of hedging contract directly with someone else or are hedging by means of futures. Versus the former who have effectively indefinite or at least very long term hedging via their own retail business and long term contracts with independent generators (often but not always of 25 year duration) and major industrial consumers (typically 4 - 30 years duration although terms outside that aren't totally unknown).

Once the next crisis comes around, and every now and then the industry has one in terms of pricing, well then you get to find out which of the "pure" retailers and generators didn't do their hedging so well and which ones got it right. That's the point where those who didn't do it well abruptly exit the market with a fire sale of their account base to someone else.

In the context of the states where AGL has a major presence the reality is that AGL, Alinta, Delta Electricity, Energy Australia, Engie, Hydro Tasmania, Infigen, Origin and Snowy Hydro have far less business risk than the others. They can certainly lose money, but the others are ultimately far more exposed - usually with a much smaller capital base as well.

For reference:

AGL retails as AGL, Click Energy and PowerDirect.

Alinta, Delta Electricity, Energy Australia, Infigen and Origin trade under their own name noting that Delta and Infigen retail to large customers only.

Engie retails under the brand name Simply Energy.

Hydro Tasmania retails under the brand name Momentum Energy.

Snowy Hydro retails as Lumo and Red Energy.


----------



## Clansman (2 March 2021)

Smurf1976 said:


> There's really two categories of operators in the industry:
> 
> Gentailers who own firm generating capacity and a retail business.
> 
> ...




You obviously didn't read the article 7 years ago, or listen to the Call yesterday. 
If 1 person is fat, then finds a 2nd person who is fatter, it doesn't make the 1st person thin.
In case you hadn't heard, Infigen is gone. Please make an effort to keep up.


----------



## Smurf1976 (2 March 2021)

Clansman said:


> Infigen is gone




A change of ownership, now being wholly owned by another group, doesn't mean they're not still in business and competing against some (but not all) of AGL's business.


----------



## Clansman (2 March 2021)

Smurf1976 said:


> A change of ownership, now being wholly owned by another group, doesn't mean they're not still in business and competing against some (but not all) of AGL's business.
> 
> Same as Energy Australia being owned by CLP Group doesn't mean they aren't a direct large scale competitor to AGL.



Infigen are gone, They were taken over after years of underperformance and being riddled with debt. They are out of business. Accept you didn't know about it and deal with it. Nice attempt at the post mistake edit though... but you got caught out.
If you think you know better, go  and try buying some Infigen shares on the local bourse. LOL


----------



## Smurf1976 (2 March 2021)

Clansman said:


> Infigen are gone, They were taken over after years of underperformance and being riddled with debt. They are out of business. Accept you didn't know about it and deal with it.



That the company was absorbed by another company doesn't change the fact that it's still physically in operation and still doing business.

Same with anything. Competitors only benefit from the demise of a competitor if they actually cease operating. Simply getting a new owner but carrying on business means effectively nothing so far as competitors are concerned no matter what the industry.


----------



## Clansman (2 March 2021)

Smurf1976 said:


> That the company was absorbed by another company doesn't change the fact that it's still physically in operation and still doing business.
> 
> Same with anything. Competitors only benefit from the demise of a competitor if they actually cease operating. Simply getting a new owner but carrying on business means effectively nothing no matter what the industry.




It's not an ASX listed company anymore nor is it listed elsewhere.  This is ASX forums. ASX stocks are discussed. It isn't one. Not anymore.
The other topic seems to be you having a battle with your own conscience about something irrelevant. I on the other hand am not.
I don't need to assess whether AGL is benefitting from another operators demise. It wouldn't in any case. Poor management will do that to a company. In any case you clearly are putting your foot in it. Iberdrola, which took out Infigen is a larger company than AGL. That isn't a positive in case you don't know that either.


----------



## qldfrog (3 March 2021)

Clansman said:


> Infigen are gone, They were taken over after years of underperformance and being riddled with debt. They are out of business. Accept you didn't know about it and deal with it. Nice attempt at the post mistake edit though... but you got caught out.
> If you think you know better, go  and try buying some Infigen shares on the local bourse. LOL



so how much have you in short so that it is critical for you to shot AGL at every opportunity?If you believe AGL is so bad why do you even care?
Look I can do the same:
Today AGL +0.1; ASX200: -0.4%
amazing outperformance on the last session: a picture of the time to come...


----------



## qldfrog (3 March 2021)

apologies I used +0.9% initially which was for the week, not day but same same


----------



## Clansman (16 March 2021)

I see these muppets have placed themselves as a vanity runner in the field for a tilt at Tilt Renewables.
The ladies will put their best dress on and have a nice day out, but ultimately like all vanity runners, it will run down the track.


----------



## sptrawler (30 March 2021)

AGL to separate into two companies.








						‘New path’: AGL splits power plants, retail as green shift accelerates
					

AGL will split off its emissions-intensive coal- and gas-fired power plants from its wider business as the shift to renewable energy accelerates.




					www.smh.com.au
				



From the article:
_The split of AGL, to be detailed at an investor briefing on Tuesday, will create two new businesses: the carbon-neutral “New AGL”, which will include the company’s retailing division, and “PrimeCo”, which will be the nation’s largest electricity generator_.


----------



## Clansman (30 March 2021)

sptrawler said:


> AGL to separate into two companies.
> 
> 
> 
> ...




The smurf will be devastated. But he was told in very simple terms that it was more than likely to happen.
Some people just have to have their suffering long and drawn out.


----------



## sptrawler (30 March 2021)

Clansman said:


> The smurf will be devastated. But he was told in very simple terms that it was more than likely to happen.
> Some people just have to have their suffering long and drawn out.



I don't hold, but I think it is a good idea, the cross business subsidising would become difficult to manage going forward IMO.
Generation will have the ability to focus on extracting whatever money they can from the coal assets, while retail can focus on the integration of customer storage related value i.e BEV's and house batteries, which are the key to the renewable grid.
Once the major companies have their house in order, I would expect to see the Federal government start and roll out uptake initiatives, which makes sense rather than putting the cart before the horse as normally happens in Australia.


----------



## Clansman (30 March 2021)

sptrawler said:


> I don't hold, but I think it is a good idea, the cross business subsidising would become difficult to manage going forward IMO.
> Generation will have the ability to focus on extracting whatever money they can from the coal assets, while retail can focus on the integration of customer storage related value i.e BEV's and house batteries, which are the key to the renewable grid.
> Once the major companies have their house in order, I would expect to see the Federal government start and roll out uptake initiatives, which makes sense rather than putting the cart before the horse as normally happens in Australia.




I wouldn't call it an idea. That would be stretching it because the management haven't had one for years. When option number 1 on the list is the only option on the list, It's not an idea...


----------



## sptrawler (30 March 2021)

Clansman said:


> I wouldn't call it an idea. That would be stretching it because the management haven't had one for years. When option number 1 on the list is the only option on the list, It's not an idea...



That could be very true, I haven't followed them, worked my whole life in power generation, no way would I invest in it. 
Way too driven by politics.


----------



## Clansman (30 March 2021)

sptrawler said:


> That could be very true, I haven't followed them, worked my whole life in power generation, no way would I invest in it.
> Way too driven by politics.




It would seem that the SP had dropped to such low levels, that  (mis)management felt the pressure to be seen to be doing something ( as opposed to actually doing something ).  The only option with the highest probability of allowing them to stay gainfully employed was to allow shareholders to have 2 dogs in their kennel, instead of the current 1.


----------



## Ferret (30 March 2021)

AGL's plan for an LNG import terminal at Crib Point have been knocked back on environmental grounds.

Another set back for AGL.


----------



## Smurf1976 (30 March 2021)

Clansman said:


> The smurf will be devastated. But he was told in very simple terms that it was more than likely to happen.
> Some people just have to have their suffering long and drawn out.



Not at all.

Unlike some however I choose to focus on the company and its business rather than on making childish comments which, if you were to act that way whilst working for just about any large business, would have seen you escorted off the premises by now.

It remains true that the company owns physical assets of value.

It also remains true that the company has a major presence in energy retail to consumers.

_Someone _will extract value from those. Whether it's AGL or a competitor remains to be seen but ultimately being at the bottom of the cost curve among fossil fuel based generators, and being the the largest ASX listed owner of hydro generation with its associated stored energy, isn't a situation that brings no value.

Note that it's Energy Australia who've announced a plant closure and it's Delta Electricity who've cancelled plans for major maintenance thus effectively constraining their future. Both of those being publicly announced and both being of benefit to AGL in due course since, as with any business, it's not a bad thing when your competitors simply walk away.

What is a very definite problem for AGL and indeed rather a lot of companies in the sector is the LNG terminal in Victoria not going ahead. That could get interesting to say the least - in the absence of an alternative it'll end up as a political issue of significance indeed it'll be one that receives political attention to some extent that's a given.

Where it gets more interesting is if one considers what alternative projects are now more likely to proceed? Viva Energy and APA Group both have a lot of relevance there as does anyone with known or potential gas resources in south-eastern Australia.


----------



## Clansman (30 March 2021)

Smurf1976 said:


> Not at all.
> 
> Unlike some however I choose to focus on the company and its business rather than on making childish comments which, if you were to act that way whilst working for just about any large business, would have seen you escorted off the premises by now.
> 
> ...




It remains true that the company's share price  is at historical lows....and dropping

It also remains true that unless your investment window is 20-30 years (break even), then this is a highly speculative non investment grade business with a declining moat and a questionable suite of capital intensive assets.

It also remains true that today's announcement was met with derision by the overall market, again.


----------



## Clansman (30 March 2021)

The wise men of AGL followed the Star of Bethlehem to bring their gifts to the foot of the baby Jesus. The first wise man brought the gift of gold because he'd heard on the grape vine that it was a finite resource that would always be worth something. Joseph gratefully accepted.

The 2nd wise man had lost the coin flip and was asked to offer a substantial amount of New AGL shares at a discount to the eternal moving average.   A tray of scones was face value at the time but the 2nd wise man was happy to hand them over for nothing, given how long he'd had to carry them.

The 3rd wise man, had lost a marathon best of 17 game of rock, paper, scissors, and then an arm wrestle,  He wheeled in a donkey in a wheelchair,  it's back still fully laden with a large cabinet full of what appeared to be documents with PrimeCo written in bold type.

He removed the large cabinet from the donkeys back. Suddenly the donkey sprang out of the wheelchair, and galloped out of the Inn faster than Winx on her 33 run winning streak.
The 3rd wise man then sheepishly passed the large box over to a stern faced Joseph who put on his reading glasses to look at the name on the documents.   Suddenly a huge grin beamed across the face of Joseph.  

He called out to Mary who was daytrading in the kitchen " Darling come here quickly, I've got another beauty for you to short"


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## InsvestoBoy (3 June 2021)

@Smurf1976 I plan to go back and re-read your posts in this thread as I have been taking a look at AGL and you are a gold mine of knowledge about energy here in AUS, so valuable and rarer than hens teeth.

Do you have any current thoughts?

I saw some notes from Goldman saying that the main driver of the price of AGL was wholesale energy market and they had some different valuations, with the lowest being $8.80 for $50 wholesale energy price...which I think is about where we are for both values today. I know coal prices have been rising rapidly, do you think wholesale energy is going to bounce?

Some back of the napkin calculations seem to show even if the dividend gets cut to 50c over the long term, that's not a bad yield at todays prices.


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## Smurf1976 (4 June 2021)

On the generation side AGL's costs are largely locked in. That is, their main sources are:

Coal purchased under contract from external parties (that is, other coal mining companies) in NSW. In 2019-20 this accounted for 54.9% of AGL's generation.

Coal from the company's own mine in Victoria. AGL owns and operates the mine and uses about two thirds of the production itself, selling the other third to rival electricity generation company Alinta. In 2019-20 this accounted for 29.6% of AGL's generation.

Renewable energy for which the cost is incurred with having built it (or contracted someone else to build it) in the first place but the wind, sun or water itself costs nothing. In 2019-20 this accounted for 10.0% of AGL's generation.

Only a relatively minor portion of the company's generation is from fuels the price of which is highly variable in the short term, that being gas or oil. In 2019-20 this accounted for 5.4% of AGL's generation.

Figures rounded to the nearest 0.1% and taken from www.2020datacentre.agl.com.au

So 39.6% of generation is immune to fuel cost variation completely and a further 54.9% is using thermal coal which is at least more price stable than oil or gas.

Note however that AGL's generation from coal in NSW will decline somewhat with closure of the Liddell plant although the nearby Bayswater station, which is to continue operating, is will pick up a bit of that volume.

AGL's operations do include other states but are primarily NSW, Vic, SA so that's where I'll focus on.

*Note these are spot market prices.*

Average monthly pricing for NSW:
January 2020 = $204.84
February = $62.19
March = $47.30
April = $41.31
May = $43.42
June = $50.62
July = $50.18
August = $52.18
September = $41.96
October = $59.56
November = $69.19
December = $84.19
January 2021 = $40.34
February = $35.48
March = $39.42
April = $58.13
May = $130.53

Average monthly pricing Victoria:
January 2020 = $226.99
February = $57.14
March = $48.78
April = $38.40
May = $43.08
June = $56.11
July = $66.70
August = $58.92
September = $39.13
October = $49.85
November = $50.03
December = $30.67
January 2021 = $31.06
February = $30.38
March = $39.87
April = $55.55
May = $85.78

Average monthly pricing for SA:
January 2020 = $118.92
February = $67.07
March = $51.93
April = $36.72
May = $42.29
June = $56.84
July = $69.84
August = $54.60
September = $13.92
October = $33.76
November = $42.20
December = $13.97
January 2021 = $30.37
February = $22.87
March = $69.75
April = $55.34
May = $85.62

Electricity is an inherently volatile market due to weather influencing both demand and supply but looking at Autumn, there does seem to be an upward trend year on year.

Looking ahead, a key point is that while gas only accounts for a relatively small portion of electricity generated (by all companies in total) for the grid, and oil-based fuels are of even less consequence, they are often the marginal source of supply. 

Due to that, electricity prices are significantly exposed to movements in the gas price even though most electricity isn't supplied from gas. That isn't always the case, at times of very low demand gas is usually not being used at all, but overall it does set the price much of the time.

Another factor in the short to medium term is the recent incident at Callide power station in Queensland. AGL does not own or operate this facility but, since it's a substantial supplier into the National Electricity Market, the incident does have implications.

I've posted details about what happened so far as is known at this stage in the thread linked below but in brief there are 4 generating units at Callide all presently out of service due to a major incident on 25 May. Three units are expected to return to operation progressively during June but the other is, for practical purposes, effectively destroyed and will not operate unless rebuilt. The destroyed unit's steam turbine is smashed to bits, the shaft has snapped, there's been a fire and parts ended up outside the building with holes blown through the walls and roof. It's a very major incident.





__





						The future of energy generation and storage
					

CS Energy has now officially released to the public, media and anyone else who wants it a photo from Callide C showing the damage.  Note the holes in the roof where bits went flying through and the end of the snapped shaft sitting where it landed complete with a dent in the floor.  Photo...




					www.aussiestockforums.com
				




I emphasise that* AGL does not own or operate Callide*, my point being the market impact. 4 generating units out has spiked prices across the National Electricity Market and whilst that should settle down in due course, the long term outage of one unit at Callide is still ultimately a reduction in supply capacity. AGL may gain a bit of volume, mostly at the company's Bayswater power station in NSW, but also the pricing impact which is just standard supply and demand economics. Less supply, same demand = higher prices.

So on the power generation side of the business, I'd be reasonably optimistic about AGL's situation so long as, of course, AGL itself doesn't have any kind of major equipment failure etc.

On the other hand there's the gas business, since AGL also retails gas to consumers (as distinct from using gas to generate electricity) and to do that it needs a gas supply. 

Relevant point there is the Victorian state government denied approval of AGL's proposed LNG import terminal in that state which raises an obvious question as to AGL's gas sourcing going forward. I don't know what gas supply contracts AGL has but that is a definite red flag of concern that they would likely have assumed the import facility would be up and running in due course but, with that dead, will now need to arrange supply contracts from others and are doing so from a position of relative weakness given their own project is dead.

On the other hand, the lack of AGL importing LNG to Victoria should put upward pressure on the gas price at least until someone else actually builds an equivalent facility. Higher gas price > higher electricity price > AGL gains from electricity despite possibly losing on the gas side.

Adding to all that I'll note recent comments early in 2021 from rival Origin Energy's CEO regarding unsustainably low electricity prices and the announcement by another rival company Energy Australia that closure of their Yallourn power station (Victoria, coal) will be brought forward to a single shutdown in 2028 versus the previous plan of a staged closure 2029 - 2032.

Putting all that together, my opinion is that we've seen the lows for electricity prices at the wholesale level so long as the gas price doesn't crash and we don't go back to economy wide lockdowns due to COVID. With a note of caution as to AGL's sourcing of gas for its gas retail business (and its gas-fired power stations) now that the LNG import project has been scrapped.


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## Smurf1976 (4 June 2021)

Further to my previous post, a clarification about location and gas prices.

Gas is a commodity where the price varies locally such that the price of gas in overseas markets which you may see quoted in the context of financial markets is irrelevant to AGL. What matters to AGL is the price of gas in Australia, in particular the eastern states (including SA), not the price in the US which is typically quoted in a financial market context.

Australian gas prices do have an international linkage but that's more to the JKM price (Japan / Korea) than to the US.

Other point is about wholesale versus retail.

AGL generates electricity and also retails it to consumers, and arrangement referred to in the industry as a gentailer. 

That being so, whilst the company does have exposure to wholesale prices, retail prices are also important so far as revenue is concerned. 

In the longer term as with anything, if the wholesale price goes up then retail will tend to follow in due course but in the context of electricity that's not an immediate thing. Wholesale electricity prices vary constantly whereas retail consumers are typically on contracts of fixed duration such that changes in price will take time to filter through.

So there's some definite lags there in terms of prices flowing through to consumers and thus company revenue. It's not a quick thing as it is with oil where a rise in the oil price pretty quickly results in a rise in petrol prices, with electricity it takes somewhat longer in practice to flow through.


----------



## InsvestoBoy (14 June 2021)

@Smurf1976 just wanted to thank you and apologise for not thanking you for your prompt/valuable input earlier. I completely forgot about this (due to starting a new job) and seems missed my entry point on AGL and a few other energy names I was looking at.


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## qldfrog (30 June 2021)

well the split plan was hammered bythe market, deserves it:
a woke full plan, and details released today so too late for shareholders holding to offload in the FY20-21 financial year.
That's bastardy to say the least
*Painful to admit it,after the previous exchanges but the naysayers were right, so my apologies,* I should indeed have bought the Zoom and Tesla style craps. and get advice from reddit*...*
From a company with strong vertical integration and a leverage position in the coming years,
 To a pure generator with no leverage, and a new company which will try to compete with startups to offering phone, nbn and power plan..the new dodo with same fate  :-(
What a piece of sxxt, definitively the new AMP


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## Smurf1976 (30 June 2021)

InsvestoBoy said:


> @Smurf1976 just wanted to thank you and apologise for not thanking you for your prompt/valuable input earlier. I completely forgot about this (due to starting a new job) and seems missed my entry point on AGL and a few other energy names I was looking at.



Don't thank me and my apologies if you invested......

I maintain my view that the generation assets have real value, noting that wholesale electricity prices continue to trend upward, but it would seem that the company's management doesn't grasp how to turn that value into one that benefits shareholders.

Average wholesale price across the National Electricity Market (all states except WA and NT):

February 2020 = $55.63
March 2020 = $43.88
April 2020 = $36.61
May 2020 = $37.90
June 2020 = $35.48

...

February 2021 = $35.32
March = $40.48
April = $52.48
May = $107.33
June to date = $157.45

So year on year a pretty decent price rise there and as a low cost generation company with generation physical volumes exceeding retail sales, AGL ought to be doing nicely from that.

It seems however that management isn't managing to turn that into value for shareholders. Whilst I got it right about prices moving up, I very clearly didn't foresee what management would do....   

The only other companies in the sector I'm aware of having done anything remotely similar was an unlisted one that contemplated exiting its relatively small retail operation, selling that as a going concern, in order to free up capital to further invest into the ongoing generation business. That was only a thought however, something they looked at as part of considering how to raise capital for the new investment, and they haven't gone through with it and are instead looking at other options to fund their planned investments.

Looking at the physical assets being split, it's pretty much straight down the divide from a technical perspective.

Hydro generation, open cycle (peaking) gas turbines, internal combustion generating plant and wholesale gas contracts stay with AGL.

Coal mining, coal-fired generation, base load gas-fired generation, physical gas production and storage infrastructure and contracts regarding purchase of energy from the SA and Victorian wind farms plus operation of the Dalrymple battery (SA) go into the new company Accel Energy.


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## qldfrog (30 June 2021)

Smurf1976 said:


> Don't thank me and my apologies if you invested......
> 
> I maintain my view that the generation assets have real value, noting that wholesale electricity prices continue to trend upward, but it would seem that the company's management doesn't grasp how to turn that value into one that benefits shareholders.
> 
> ...



fully agree, a management issue, not a business issue, but as with AMP, Boral and so many others , starting with a pot of gold, bad management can manage to turn it into a pot of sxxt;
worse, AGL is big enough so that the average aussie will probably pay this mismanagement with blackouts in the future


----------



## sptrawler (30 June 2021)

qldfrog said:


> fully agree, a management issue, not a business issue, but as with AMP, Boral and so many others , starting with a pot of gold, bad management can manage to turn it into a pot of sxxt;
> worse, AGL is big enough so that the average aussie will probably pay this mismanagement with blackouts in the future



The interesting part will be how they divi up the debts, how much debt is each section taking with them?
Just my opinion.


----------



## qldfrog (1 July 2021)

sptrawler said:


> The interesting part will be how they divi up the debts, how much debt is each section taking with them?
> Just my opinion.



They will move the debt to the bad coal powered generation, and be ready to burn new cash on their funky the new dodo.i genuinely can not see how this could work even medium term.
Will have to find another dirty name to leverage the carbon facts vs narrative gap.hopefully not one to commit suicide again.


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## InsvestoBoy (1 July 2021)

Smurf1976 said:


> Don't thank me and my apologies if you invested......




No really thankyou for always sharing your knowledge and thoughts.

I didn't get into any energy plays in the end, missed my entry and then didn't get a chance to re-evaluate my strategic thinking.




> It seems however that management isn't managing to turn that into value for shareholders. Whilst I got it right about prices moving up, I very clearly didn't foresee what management would do....




To be honest, sentiment is horrible right now, probably a great time to get in (who's left to sell?!), but I ended up putting my available funds into something in a completely different sector and overseas.


----------



## orr (11 July 2021)

Well worth a read for those with any interest in this company...particulary holders of the last few years.









						Exclusive: Frydenberg pushed AGL to sack boss
					

As AGL attempted to clean up its energy, Josh Frydenberg intervened to have its chief executive sacked. Now the company is de-merging to salvage its failing coal assets.




					www.thesaturdaypaper.com.au
				




Of note is the price plummet since Vesey's departure. tar Josh....


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## xen88 (6 September 2021)

“AGL Energy *shareholders would hold one share in each of Accel Energy and AGL Australia for*. *every share they own in AGL Energy on the applicable record date*.”

Does this mean if you have 300 shares in AGL they will give you 300 shares in Accel?


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## frugal.rock (6 September 2021)

xen88 said:


> Does this mean if you have 300 shares in AGL they will give you 300 shares in Accel?



Give implies a gift.
I imagine you've paid (dearly?) for them.
One would aquire them, yes.

It doesn't get better;

S&P/ASX 50 Index Rebalance – Effective Prior to the Open on September 20, 2021

Removal, AGL,  AGL Energy Limited



			https://c.tenor.com/gv9ALTvjKYIAAAAC/scooby-doo-ruh-roh.gif


----------



## divs4ever (6 September 2021)

that would imply a further small slide for AGL  , caused  by ASX 50 ETFs divesting ( there is at least one using that index )

 would  an ETF/LIC focusing  on ex-top 50 step into the gap ??


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## xen88 (9 September 2021)

Will AGL shares ever recover ?


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## xen88 (9 September 2021)

Also how would the value the share price for the new company Accel energy ?


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## StockyGuy (28 October 2021)

Bought a chunk of AGL yesterday at 5.82 - never auspicious sign when it drops down straight after - closing today at 5.68.  It's a long termer for me (in whatever form, given impending split into 2 companies).  IMO uncertainty on the split up is punishing the share price irrationally.

This one has broken many hearts, though   There's a lot of negative sentiment around from those who got in at much higher prices, and may've sold already at a big loss.  It's not what you expect from an ancient Aussie household name utility company.

(There is no recommendation here; it's a long term gamble.  I'm prepared for the falling knife to bloody my hands.)


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## Belli (29 October 2021)

I suspect that, despite AGL being outside of the Top 50, an LIC such as MIR will not be holding it.  It has common directors with AFI and that LIC disposed of the majority of its holdings in AGL in 2019 (at about $22/share) and the remainder the following year at an average of around  $16/share.

Even WHF has reduced its holding in it to approximately 200,000 shares (basically to a rump holding of no consequence) and I understand ARG stated one of the regrets was taking too long to off load AGL.

Out of curiosity I had a look at the annual reports of AUI & DUI.  Neither hold AGL.  Whether they ever did I don't know and I'm not inclined to find out.


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## mtbwanabe (10 December 2021)

Did anyone notice the buy up of AGL on 29 Nov?


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## sptrawler (10 December 2021)

mtbwanabe said:


> Did anyone notice the buy up of AGL on 29 Nov?



I think I will be having a nibble, now they have some focus on where their future lies and I've never bought an electrical utility before.
So be warned if I'm thinking it might be a goer, I'm usually dead wrong.


----------



## Ann (10 December 2021)

sptrawler said:


> I think I will be having a nibble, now they have some focus on where their future lies and I've never bought an electrical utility before.
> So be warned if I'm thinking it might be a goer, I'm usually dead wrong.




This is most certainly on my watch list sp. However, I would not be buying into it just yet. It is still in its free fall stage but seems to be slowing a bit perhaps but I can still see quite a bit more downside. It needs to break well away from its downtrend line and move sideways to consolidate for a while. ORG might also be worth a look if you are looking at utilities.



mtbwanabe said:


> Did anyone notice the buy up of AGL on 29 Nov?




It was actually a sell-out by the BlackRock group, not a buy-up.


----------



## sptrawler (10 December 2021)

Ann said:


> This is most certainly on my watch list sp. However, I would not be buying into it just yet. It is still in its free fall stage but seems to be slowing a bit perhaps but I can still see quite a bit more downside. It needs to break well away from its downtrend line and move sideways to consolidate for a while. ORG might also be worth a look if you are looking at utilities.
> 
> 
> 
> It was actually a sell-out by the BlackRock group, not a buy-up.



Hi Ann, I hear where you are coming from, but I'm terrible at picking the bottom, as I will be a long term holder and this will be a massive project to turn this ship, I will just pick up as funds become available.
They from memory are a dividend payer, so I will just add them to my income group, I really should take a more active interest but there are a lot smarter people than me on the forum who are willing to share their Knowledge as you do and I must say is greatly appreciated.
I just try and focus on what are they trying to achieve, how are they going to get there and how are they going to fund it.


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## mtbwanabe (10 December 2021)

Ann said:


> It was actually a sell-out by the BlackRock group, not a buy-up.



I've clearly got a lot to learn. Sell-out by the BlackRock group? So who was the buyer, buy back by AGL? Was this information publically available? Thanks for the perspective on the longer view as I was considering this spike in volume as a potential trigger for a trend reversal.



sptrawler said:


> They from memory are a dividend payer, so I will just add them to my income group, I really should take a more active interest but there are a lot smarter people than me on the forum who are willing to share their Knowledge as you do and I must say is greatly appreciated.
> I just try and focus on what are they trying to achieve, how are they going to get there and how are they going to fund it.




I was in AGL for this reason awhile ago but their div has been slowly eroding so the appeal is limited for me. The spike in volume is what got my attention and got me following a bit closer.


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## finicky (10 December 2021)

How strange  I have no interest in AGL but took notice of it being a James Gerrish pick from reading just tonight. It's happened a few times now that just as I become interested in something someone posts about it on ASF . He seems to be saying that it is now trading at below asset value? James Gerrish is worth a follow, one example he was onto WHC before it took off. He likes gold stocks lately. WTH happened to earnings in 2021?
*James' pick: AGL Energy (ASX: AGL)*​*James Gerrish: *I missed the component about quality, but I've certainly got one that's been depressed over the last 12 months. It's AGL Energy. It's down 53%. I think it's the fourth worst-performing stock on the ASX 200 this year. A large portion of that drop is correct, but it now becomes an asset at play. So it is trading at around $5.50 a share. It's cheaper than its retail business. So that for me is a buy, and will do better in '22 than it did in '21.

Chart: not interested myself but it's a chart that I would be tempted to buy as a good chance of having bottomed: weekly positive candles have formed outside the resistance rail of the relentless downtrend, very high positive volume bar, some positive momentum divergence, this low is not much lower than previous low.

Weekly


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## Smurf1976 (10 December 2021)

Ann said:


> ORG might also be worth a look if you are looking at utilities.




A key difference between the two is that Origin has a major gas business, as in production of gas as such, whereas AGL is a very trivial player in that space.

Origin's exposure to commodity prices is thus different from AGL's. 

Just something to be aware of....


----------



## Ann (11 December 2021)

mtbwanabe said:


> I've clearly got a lot to learn. Sell-out by the BlackRock group? So who was the buyer, buy back by AGL? Was this information publically available? Thanks for the perspective on the longer view as I was considering this spike in volume as a potential trigger for a trend reversal.




This information is publicly available on the ASX announcements. There may be a day or two delay but around the time of the spike, you will often see who it is. I find it very interesting that instead of just a blanket "ceasing to be a substantial holder notification with "this many held and this many sold" they are now having to show their trading history. You can see what type of trade it is such as on market or in specie or borrow return.  It is very interesting and worth a look, they behave like day traders. There appears to have been a concerted effort to sell this company down since 2017.  You can see JP Morgan were shorting this for a while as well in 2021. The ASX notices are full of fun stuff, a great read. If there is anyone with a fondness for adding and subtraction you may well be able to see how well or badly BlackRock have performed over the four years.

Now as far as a spike being a trigger for a trend reversal, it is often the case. Years ago in the 'noughties' era I used to watch spikes, they were a good indicator but often the reversal could take ages to happen, so I didn't bother in the end. There are easier ways of seeing a reliable trend reversal. However, it is a really interesting exercise to check into the story of a spike. As often as not it is a sell for attention .... as in "look at moy, look at moy." ( Although, not in BlackRock's case, my opinion is they were CC activists trying to black mail AGL  regarding using coal for power generation. Now the current fight has been lost regarding coal by the CC activists so taking their bat and ball home. EFF off is what I say to them!)

This is the ASX notice of interest....knock yourself out, those with an adding machine! 

		02/12/2021 10:50 am Ceasing to be a substantial holder


----------



## Ann (11 December 2021)

...and a 6 monthly chart.


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## Belli (11 December 2021)

For about a nanosecond I thought you may be on to something until I glanced at the number of buy/sells per day compared with the overall volume for AGL that day.  Take 25 November.  Vanguard Buy 310, 7429, 6543. Sell 109.  Not even a blip when the volume on that day for AGL was 4m+.

Nothing more than index rebalancing as index funds do.


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## Ann (11 December 2021)

Belli said:


> For about a nanosecond I thought you may be on to something until I glanced at the number of buy/sells per day compared with the overall volume for AGL that day.  Take 25 November.  Vanguard Buy 310, 7429, 6543. Sell 109.  Not even a blip when the volume on that day for AGL was 4m+.
> 
> Nothing more than index rebalancing as index funds do.




No, let's take the 30th November, forget Vanguard and the 25th we are talking BlackRock, and who knows who else on the day, they may not have had reportable holdings. The ASX report from BlackRock has two and a half pages of trading for the 30th November. 

EDIT: They had about 126 trades for the 30th November


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## Ann (11 December 2021)

I have been watching large funds appearing to blackmail companies into submitting to CC activist pressure for many years. To me, this collapse of AGL is simply a company telling these blackmailers or should we call them greenmailers to "do your worst, mate". Well they certainly seemed to have done some damage since 2017. 
Disclaimer: I have a very fine imagination and it all may be just a figment of course! 

Here is an article back in May 2021 about Exxon Mobil Corp being greenmailed by CC activists.

"BlackRock and Vanguard declined to comment on their stance. Both have signed the Net Zero Asset Managers  Initiative, vowing to press portfolio companies to achieve net zero emissions by 2050 or sooner."









						Climate activists urge BlackRock, Vanguard to vote against Exxon directors
					

Climate activists are prodding Exxon Mobil Corp's (XOM.N) top shareholders to vote against the reelection of two directors, a move that could boost a hedge fund's proxy fight to seat four candidates on the oil giant's board.




					www.reuters.com


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## sptrawler (11 December 2021)

For AGL to remain a viable power generation, it has to somehow replace the assets  it is closing down, with assets that pick up that customer base, the only advantages it has over new entrants to the space is they already have the income and infrastructure.
So the balancing act between closing down plant and at the  same time installing clean replacement plant is tricky.
They don't have the gas for LNG plant, but that is a stop gap anyway, as it will be next cab off the rank, to be banned anyway.
Interesting times, a lot will depend on free cashflow, over the transition period. 

IDNH


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## Belli (11 December 2021)

Ann said:


> The ASX report from BlackRock has two and a half pages of trading for the 30th November.





Got the link?

IOZ has a turnover of 4.34% (across all the 203 companies) and AGL is ranked 100. IOZ has 1,470,394 shares (0.17% of the indexes assets.) And you reckon they is going to move mountains trading that number of shares where the volume may be half a mill on the day?



			https://www.blackrock.com/au/individual/products/251852/fund/1478358644060.ajax?fileType=csv&fileName=IOZ_holdings&dataType=fund


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## Ann (11 December 2021)

Belli said:


> Got the link?



Seriously?! 

It is an ASX announcement! 









						AGL share price and company information for ASX:AGL
					

View today’s AGL share price, options, bonds, hybrids and warrants. View announcements, advanced pricing charts, trading status, fundamentals, dividend information, peer analysis and key company information.




					www2.asx.com.au
				




Scroll down to announcements and link into 	"02/12/2021 10:50 am Ceasing to be a substantial holder"


----------



## SyBoo (12 December 2021)

Chart from* ShortMan - Short position graph for AGL 



*


----------



## Belli (12 December 2021)

Ann said:


> It is an ASX announcement!




Ah, I see. Ta.  Algorithmic momentum-based trading.  No conscious human decision making involved in the actual trades.


----------



## Ann (14 December 2021)

Belli said:


> Ah, I see. Ta.  Algorithmic momentum-based trading.  No conscious human decision making involved in the actual trades.




I should imagine so, I would doubt very much they would have a wee trainee fundie sitting there poking bid-offer all day! I also doubt all the other folk colluding....ahem, joining them to create a volume honey pot to suck in buyers, while they got out, would have their wee folk sitting going bid-offer all day long either. Dang lot of button pressing for near 60mil turnover!


----------



## Ann (17 December 2021)

Given that I have been laying into the fundies on this thread, I may as well keep it consistent even off track for AGL for just a minute. 

I think this article in Bloomberg may explain why the fundies are effingoff. Finally, our government have told them to stop with their bllsht and push off. 

"Trump-Era Curbs on Shareholder Activism Find Favor in Australia"
By Matthew Burgess


   " Government to impose tougher rules on proxy advisory firms
    The companies can have a big influence on investors’ votes"





__





						Bloomberg - Are you a robot?
					





					www.bloomberg.com
				




Now maybe we will see some action in our stockmarket!


----------



## sptrawler (17 December 2021)

sptrawler said:


> For AGL to remain a viable power generation, it has to somehow replace the assets  it is closing down, with assets that pick up that customer base, the only advantages it has over new entrants to the space is they already have the income and infrastructure.
> So the balancing act between closing down plant and at the  same time installing clean replacement plant is tricky.
> They don't have the gas for LNG plant, but that is a stop gap anyway, as it will be next cab off the rank, to be banned anyway.
> Interesting times, a lot will depend on free cashflow, over the transition period.
> ...



This is what I was alluding to in the above, with regard AGL transitioning from coal to gas to H2 and may well be what Twiggy and AGL are thinking of, time will tell.
I do hold now.



			https://www.ge.com/content/dam/gepower/global/en_US/documents/fuel-flexibility/GEA33861%20Power%20to%20Gas%20-%20Hydrogen%20for%20Power%20Generation.pdf


----------



## Belli (17 December 2021)

sptrawler said:


> This is what I was alluding to in the above





It would appear the author works for GE.  Here is a link on a similar subject by those who don't.









						Hydrogen in Australian natural gas: occurrences, sources and resources
					

Natural or native molecular hydrogen (H2) can be a major component in natural gas, and yet its role in the global energy sector’s usage as a clean energy carrier is not normally considered. Here, we update the scarce reporting of hydrogen in Australian natural gas with new compositional and...




					www.publish.csiro.au


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## rederob (17 December 2021)

Now on a bender, and my tip for 2022:





Then again, context and perspective tell a different story:


----------



## sptrawler (17 December 2021)

Belli said:


> It would appear the author works for GE.  Here is a link on a similar subject by those who don't.
> 
> 
> 
> ...



Yes I was more referring to the technical aspect of dual firing gas turbines, therefore referenced a gas turbine manufacturer, rather than a generic presentation.
This is because I would assume AGL will look at replacing the coal fired generation with gas/H2 gas turbines, as has happened at KPS in W.A.


----------



## Belli (17 December 2021)

rederob said:


> Then again,


----------



## Smurf1976 (31 December 2021)

AGL is one of my picks for the 2022 tipping competition.

My reasoning being that the share price is seriously beaten up despite the underlying industry remaining viable. So long as the company's management can regain focus then there are opportunities.

AGL's present generation portfolio is not fully but is largely protected from short term fluctuations in commodity prices thus giving financial upside from anything which affects competitors' costs and market pricing.

Not exposed to commodity prices: Coal in Victoria, wind, solar, hydro.

Exposed to commodity prices: Coal in NSW, gas everywhere although contracts provide short term protection in both cases.

On the downside, power stations by their very nature do come with physical risks of expensive incidents. Should a competitor have such an incident that potentially benefits AGL but obviously not if it's AGL which has the incident.

In short, it's a bet on improved management, commodity price risks raising market prices and indirectly benefiting AGL, and that if anyone has an incident then it happens to another company.


----------



## Wedgy (2 January 2022)

Smurf1976 said:


> AGL is one of my picks for the 2022 tipping competition.
> 
> My reasoning being that the share price is seriously beaten up despite the underlying industry remaining viable. So long as the company's management can regain focus then there are opportunities.
> 
> ...



One of my top 4 for 2022 to as well, agree that improved management is the key. Also that AGL has been well oversold and way below actual value, AGL still generates over 10 billion dollars in revenue each year, with sales of over $17 per share and a dividend yield of 7.8%. If and I believe they will, use free cash flow to invest in renewables, like green hydrogen, should do well in 2022 (or at least not drop any lower).


----------



## Sean K (11 January 2022)

@Smurf1976 and @Wedgy I think this could be a cunning pick for 2022. I'm yet to get my head fully around the fundamentals but my contrarian eyebrows raise when I see this chart. Looks like a turnaround from the Nov lows.

Trying to get my head around the separation into New AGL and PrimeCo. Not yet sure how that effects current owners or even if it's a good thing...


----------



## DrBourse (11 January 2022)

Be careful, AGL's IV is between $5.62 & $6.05 atm, so it is currently just a bit overpriced.


----------



## sptrawler (11 January 2022)

DrBourse said:


> Be careful, AGL's IV is between $5.62 & $6.05 atm, so it is currently just a bit overpriced.



I guess it depends if you are a trader, or a buy and hold, but it would be good if they slip back into the $5 range.


----------



## finicky (11 January 2022)

Nice gap up, full white candle that has taken price above the final high of the prior downtrend.
I.e behaving well for holders or potential boarders.
(Not held, not buying)

Daily


----------



## Sean K (11 January 2022)

OK, I think I get the demerger now.


----------



## Sean K (11 January 2022)

Sean K said:


> @Smurf1976 and @Wedgy I think this could be a cunning pick for 2022.




But, I'm not sure how the demerger is going to effect your pick of AGL for the full year. You will own two companies by the EOY??


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## finicky (11 January 2022)

Credit Suisse upgrade.
James Gerrish yesterday:

*AGL Energy (AGL) *+8.6% rallied after Credit Suisse upgraded to a buy equivalent and $8.50 PT – we own AGL in the Income Portfolio with the position now up nearly 30%.


----------



## StockyGuy (11 January 2022)

StockyGuy said:


> Bought a chunk of AGL yesterday at 5.82 - never auspicious sign when it drops down straight after - closing today at 5.68.  It's a long termer for me (in whatever form, given impending split into 2 companies).  IMO uncertainty on the split up is punishing the share price irrationally.
> 
> This one has broken many hearts, though   There's a lot of negative sentiment around from those who got in at much higher prices, and may've sold already at a big loss.  It's not what you expect from an ancient Aussie household name utility company.
> 
> (There is no recommendation here; it's a long term gamble.  I'm prepared for the falling knife to bloody my hands.)




Closing price today at 6.96.  Seems there was decent  value hunting  volume under 6 bucks.  (Still holding, no extra bought.)


----------



## mullokintyre (20 February 2022)

According to Todays Australian Mike Cannon-Brooks has teamed up with Canadian Asset Manager Brookfield  to put in a takeover offer for AGL.


> AGL Energy has received a takeover bid from billionaire Mike Cannon-Brookes and Canadian asset management giant Brookfield.
> The offer was lobbed at AGL and sent to the company’s board on Saturday.
> 
> The duo have pitched a deal saying they can accelerate the decarbonisation efforts of the power giant.
> ...



This may well be good for existing shareholders of AGL (particularly those who most recently bought in at mid 550's).
Unfortunately,  it may not be good for the reliability of of electricity supply as he wants to accelerate the decarbonisation of the energy giant.
Time will tell.
Mick


----------



## Miner (20 February 2022)

I might have missed the news. However, acquired AGL  15 Dec 2021 at $5.85.
My prime driver at that time was renewable energy and AGL was deemed to be a great player.
I suspect unless it was advised on ASX, any such takeover offer would be treated as a rumour.
But if the market got the sniff then has reacted not positively and Monday news would give a clear direction.
Personally, with the 2050 target and most of the companies working on the target 2030 to have at least 50% renewable, I believe such acquisition would be a great opportunity just not for AGL holders but for others to get renewable energy credit from AGL.
*Edited text below and re-entered *

I was intrigued to find out the news and found a more detailed on AFR, published only a couple of hours back.









.


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## Sean K (20 February 2022)

mullokintyre said:


> According to Todays Australian Mike Cannon-Brooks has teamed up with Canadian Asset Manager Brookfield  to put in a takeover offer for AGL.
> 
> This may well be good for existing shareholders of AGL (particularly those who most recently bought in at mid 550's).
> Unfortunately,  it may not be good for the reliability of of electricity supply as he wants to accelerate the decarbonisation of the energy giant.
> ...




This spells trouble. If we accelerate any further without low/no emission dispatchable 24/7 realised, the air-cons and lights will go out in summer and there'll be riots in the streets. Fed Gov will need to step in here.


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## InsvestoBoy (20 February 2022)

Sean K said:


> This spells trouble. If we accelerate any further without low/no emission dispatchable 24/7 realised, the air-cons and lights will go out in summer and there'll be riots in the streets. Fed Gov will need to step in here.




Calm down mate.









						Brookfield, Cannon-Brookes in joint bid for AGL Energy
					

Canadian asset manager Brookfield and Australian billionaire Mike Cannon-Brookes are offering $7.50 a share for AGL Energy, or close to $8 billion.




					www.afr.com
				









I think you'll be alright.

Always funny watching ostensible capitalists squeal for Government intervention when the capital markets go against the ideology.


----------



## InsvestoBoy (20 February 2022)

I think it's especially funny, after everyone complaining "why sell energy shares if you want to go green you should be supporting the businesses not cutting them off from capital" ...well here we are.


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## Dona Ferentes (20 February 2022)

it is a lowball offer.... 5% premium, if reporting is correct.

Meantime, there is a demerger of AGL assets that may deliver a better outcome for shareholders


----------



## Tyre Kicker (20 February 2022)

Sean K said:


> This spells trouble. If we accelerate any further without low/no emission dispatchable 24/7 realised, the air-cons and lights will go out in summer and there'll be riots in the streets. Fed Gov will need to step in here.




100%.

Base power load.

I would hope the Fed G has someone smart enough to understand that you just can shut down the coal fire stations and keep the lights on.


----------



## Miner (20 February 2022)

Tyre Kicker said:


> 100%.
> 
> Base power load.
> 
> I would hope the Fed G has someone smart enough to understand that you just can shut down the coal fire stations and keep the lights on.



If you believe our Fed is intelligent, it is like investing on Queensland Nickel . 
the coal stock prices are actually on uptrend with some exception.
so until the panic button is pushed and there is a comfort zone on renewable energy success is really a business case, which is not before 2025-26  (how many governments will change who knows in next 4 years) , coal will be under discussion but will be continued.
Check India and China and their coal energy plants.
I am no expert and this is another wishful thought.


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## sptrawler (20 February 2022)

mullokintyre said:


> According to Todays Australian Mike Cannon-Brooks has teamed up with Canadian Asset Manager Brookfield  to put in a takeover offer for AGL.
> 
> This may well be good for existing shareholders of AGL (particularly those who most recently bought in at mid 550's).
> Unfortunately,  it may not be good for the reliability of of electricity supply as he wants to accelerate the decarbonisation of the energy giant.
> ...



They are just after a cheap pickup up of billions of dollars worth of HV electrical infrastructure, isn't FFI in discussions with AGL on one of their sites.
But I must say, this wasn't unexpected, it has been discussed on one of the other threads, but I can't complain did buy in mid Dec $6.04.
So any win is a good win.

Found it, we were discussing it in "the future of power generation and storage thread", boring to most I know.
This article from 8 December 2021








						Fortescue Future Industries and AGL Energy aim to repurpose coal-fired power plant sites to generate green hydrogen | Fortescue Future Industries
					






					ffi.com.au
				



IMHO nothing will happen but a lovely spike in AGL share price. The other thing that may happen is, the AEMO might be given more teeth that we keep talking about on the "other" thread.
Jeez who knows where the media will go with this, it should be entertaining, to say the least.


----------



## sptrawler (20 February 2022)

Tyre Kicker said:


> 100%.
> 
> Base power load.
> 
> I would hope the Fed G has someone smart enough to understand that you just can shut down the coal fire stations and keep the lights on.



I think they would be onto it, nothing worse than handing out head lamps with how to vote cards, when they send you into the booth to vote. 😂


----------



## Smurf1976 (20 February 2022)

Sean K said:


> Fed Gov will need to step in here.



Pure speculation on my part but my guess is the feds will indeed block the takeover.

The idea of someone who owns a network also owning generation and retail falls foul of the rules basically unless it's government, but even in that case government puts them into different entities as such.

It's the business equivalent of the ASX also becoming a stockbroker whilst prohibiting any broker using any competing exchange.

Or of two airports running their own airline flying between the two cities whilst having the ability to determine landing charges for competitors without charging their own airline anything at all.

It'll raise some serious eyebrows regarding the ability to cost shift, overcharge competitors to use the infrastructure and so on. It falls foul of the rules in a way that even governments aren't exempt from - hence why the states which own energy infrastructure put the physical networks and the generation / retail businesses into separate companies, it avoids any accusation of networks giving a price advantage to their own retailer.

My guess is the real motivation is largely political with respect to the upcoming federal election.

I say that since anyone in the energy business knows that the real problems are around building long duration storage and the supply of oil and gas. Coal's closing regardless - someone "promising" to close it is akin to promising that the seasons will change or that renting DVD's will become obsolete. Yep, no need for anyone to make any promises or do something to make it happen, it's happening regardless.

On the physical side, well AGL Loy Yang is for practical purposes a monopoly, there's no identified (by the Australian Energy Market Operator) physical means to operate the grid in Victoria at present without plant running that uses coal from that mine (which AGL owns) and there's very limited circumstances under which it's possible without AGL-owned generating plant (as distinct from plant owned by others but using AGL-supplied coal) running. That's a purely engineering comment not a financial one although it has obvious implications for this proposed takeover. 

The details of that circumstance, if anyone really wants to know, can be found in the AEMO Transfer Limit Advice documents - that's a strictly engineering document not economics, business, environment or politics. It does mean that Loy Yang won't be closing anytime soon though, government would almost certainly take a heavy handed approach if the need arose.


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## sptrawler (20 February 2022)

Thanks @Smurf1976 , that just burst the bubble that would probably taken AGL to $10 in two weeks. 
Have you ever heard the term, too much information. 😂


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## Smurf1976 (20 February 2022)

sptrawler said:


> Thanks @Smurf1976 , that just burst the bubble that would probably taken AGL to $10 in two weeks.
> Have you ever heard the term, too much information. 😂



The background I failed to mention is that Brookfield has already taken over the owners of Victoria's electricity transmission network.

Therein lies the issue and comparisons with an airport owning an airline etc. There's obvious potential to do things with pricing to disadvantage competitors.

Hence even states where government owns the network and also owns a generation business and/or retailer, they're separate companies, with separate management and accounting for that exact reason.

That doesn't necessarily stop a takeover of AGL but there'd be a lot of issues with compliance etc if they didn't sell the (recently acquired) Victorian transmission network at the same time.

Well, unless government turns a blind eye.


----------



## Miner (20 February 2022)

Smurf1976 said:


> The background I failed to mention is that Brookfield has already taken over the owners of Victoria's electricity transmission network.
> 
> Therein lies the issue and comparisons with an airport owning an airline etc. There's obvious potential to do things with pricing to disadvantage competitors.
> 
> ...



Did I hear elections  in Victoria and Federal Government are coming ?


----------



## Smurf1976 (21 February 2022)

sptrawler said:


> that just burst the bubble that would probably taken AGL to $10 in two weeks.



Price could still go up, I wouldn't rule that out.

Now that this has occurred, if anyone else was thinking of making a takeover offer then it may well prompt them to do so.


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## divs4ever (21 February 2022)

ASX & Media Release

 Board rejects unsolicited non-binding indicative proposal

21 February 2022 AGL Energy Limited (AGL Energy) advises that it has rejected an unsolicited, preliminary, non-binding indication of interest from a consortium led by Brookfield Asset Management Inc and including Grok Ventures (collectively, the Brookfield Consortium) to acquire 100% of the shares in AGL Energy for $7.50 per share by way of a scheme of arrangement (Unsolicited Proposal).
The AGL Energy Board considers that the Unsolicited Proposal, which was received on the morning of Saturday, 19 February 2022, materially undervalues the company on a change of control basis and is not in the best interests of AGL Energy shareholders. AGL Energy shareholders do not need to take any action in response to the Unsolicited Proposal. The Unsolicited Proposal represents a:
  4.7% premium to the closing price of AGL Energy of $7.16 on 18 February 2022;
 4.2% premium to the volume weighted average price (VWAP) since AGL Energy’s 1H22 Results announced on 10 February 2022 of $7.201 ;
 4.3% premium to the one-month VWAP of $7.192 .
 The Unsolicited Proposal is a cash proposal, with an option for AGL Energy shareholders to elect a scrip alternative in the Brookfield Consortium’s acquiring vehicle (subject to a maximum participation cap of 20% AGL Energy shareholder ownership in the acquiring vehicle). The Unsolicited Proposal provided limited other information regarding the structure of the acquiring vehicle and the scrip alternative.
The Unsolicited Proposal is also subject to a number of other conditions and assumptions, including due diligence, and approvals from the Australian Competition and Consumer Commission (ACCC) and Foreign Investment Review Board (FIRB).
 On the basis of the information presented, the AGL Energy Board has determined that the Unsolicited Proposal materially undervalues the company on a change of control basis and is not in the best interests of AGL Energy shareholders.
 The AGL Energy Board remains committed to progressing the proposed demerger of AGL Energy to establish two separately listed businesses, AGL Australia and Accel Energy, and considers the proposed demerger will deliver better value for AGL Energy shareholders. AGL Energy Chairman Peter Botten said, “The proposal does not offer an adequate premium for a change of control and is not in the best interests of AGL Energy shareholders. “Under the Unsolicited Proposal the Board believes AGL Energy shareholders would be forgoing the opportunity to realise potential future value via AGL Energy’s proposed demerger as both proposed organisations pursue decisive action on decarbonisation.” 1 VWAP since AGL Energy’s 1H22 Results calculated for the inclusive period of 10 February 2022 – 18 February 2022 2 One-month VWAP calculated for the inclusive period of 19 January 2022 – 18 February 2022 2 AGL Energy Demerger

Since announcing the structural separation proposal on 31 March 2021, the Board has rigorously tested various alternative options available to it and the AGL Energy Board continues to believe the proposed demerger is in the best interests of AGL Energy shareholders. As announced on 10 February 2022, the proposed demerger is progressing well and is on track for completion by 30 June 2022. The Board is confident that the demerger will create a strong future for both parts of the business, resulting in two industry leading companies both with the ability to unlock value as each business pursues their individual tailored purposes and strategies. “AGL Energy has the proven ability to continue to reinvent our business to meet the changing needs of our customers. Our locally developed, industry leading capability means that we are best placed to continue to serve the households and businesses of Australia, while delivering a responsible pathway to a decarbonised future,” Mr Botten said. “On a daily basis we deliver services to around 4.5 million customers3 . Under our demerger those customers who depend on us now can be sure that AGL Australia will leverage its deep energy expertise, systems and scale to further enhance these services in a low carbon world, while at the same time Accel Energy advances a new energy future together with its workforce, community and government. “At the recent results announcement AGL Energy also outlined climate commitments for both proposed organisations that demonstrated decisive action on decarbonisation.
 These commitments strike a balance between enabling Australia’s current and future energy needs and the need to responsibly decarbonise, without impacting energy reliability and affordability. “The commitments set a new baseline for both organisations against which they will measure their success and strive to improve as the energy market evolves. Under these commitments, AGL Australia would achieve 50% reduction in emissions by 20304 and Accel Energy would achieve a 55-60% reduction5 in emissions by no later than 2034, with the potential to bring this forward should the system be ready.” Both AGL Australia and Accel Energy have completed financing arrangements announced at the recent FY22 results announcement. “AGL Australia and Accel Energy will continue to have access to the deep public and private capital markets to support their renewable energy development plans.
 This will continue the AGL Energy legacy of investment in renewables that has seen us invest $4.8bn over the last two decades in transition including our part ownership of the $3 billion renewable developer TILT Renewables. “We have also received strong interest for the proposed Energy Transition Investment Partnership (ETIP) fund in recent months.
The ETIP is being established to support Accel Energy’s commitment to transition our existing thermal generation sites to low-carbon Industrial Energy Hubs.” AGL Energy is currently in-market to establish the ETIP as an investment vehicle to back the development of Accel Energy’s key renewable and low carbon firming assets.
Accel Energy will act as vehicle manager in addition to managing development, output marketing, construction, assets and dispatch. AGL Energy is working towards establishing the ETIP by the point of demerger. 3 Includes approximately 300,000 services to customers of ActewAGL, in which AGL Australia will own a 50 percent shareholding in the retail operations 4 On FY19 levels for Scope 1, 2 and 3 emissions for AGL Australia 5 FY19 baseline comprises Scope 1 and Scope 2 emissions for all electricity generation assets that will be owned and operated by Accel Energy following demerger, as reported under the National Greenhouse and Energy Act 2007 3 Under the proposed demerger both AGL Australia and Accel Energy will be focused on supporting the development of renewable and flexible generation capacity with AGL Australia’s commitment to underwrite 3 GW of new capacity by 2030 and Accel Energy starting with 2.7 GW of projects in the pipeline at various stages of feasibility, planning or development and the potential for more.
 In the absence of a proposal that provides appropriate value to AGL Energy shareholders on a control basis, the Board continues to believe the demerger maximises value for shareholders and is in the best interests of shareholders.

Macquarie Capital, Goldman Sachs and Herbert Smith Freehills are advising AGL Energy. Authorised for release by AGL Energy’s Board of Directors.

 DYOR

 i do not hold this share


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## Logique2 (22 February 2022)

"_Brookfield -Atlassian_" will make NSW electricity cheaper, apparently, as reported in the press today.

Beware of Greeks bearing gifts -is what I say to AGL shareholders..


----------



## Miner (22 February 2022)

within 2.5 months with an unexpected rise, right or wrong, I have reduced my 60% of AGL  holding to book profit.


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## mullokintyre (22 February 2022)

Miner said:


> within 2.5 months with an unexpected rise, right or wrong, I have reduced my 60% of AGL  holding to book profit.



No body goes broke taking a profit.
Mick


----------



## frugal.rock (23 February 2022)

Logique2 said:


> "_Brookfield -Atlassian_" will make NSW electricity cheaper, apparently, as reported in the press today.
> 
> Beware of Greeks bearing gifts -is what I say to AGL shareholders..


----------



## Dona Ferentes (6 March 2022)

AGL has rejected a second takeover offer from tech billionaire Mike Cannon-Brookes and his Canadian partners, Brookfield.

Mr Cannon-Brookes, through his investment firm Grok Ventures and Canadian investment firm Brookfield, made an increased offer of $8.25 a share, a 75 cent per share increase from the original $7.50 bid made a fortnight ago. The revised offer is around a 10 per cent increase on the original $8 billion bid and was made on Friday afternoon.

AGL's board met over the weekend and decided to reject the offer. The company is expected to make an official update to the ASX on Monday.

Brookfield and Grok Ventures are expected to walk away from the takeover push after the consortium's second failed attempt to take over the company. The Canadian firm was funding about 80 per cent of the bid.

..................... _and here's the zinger!  *Gosh*_


> “_The Consortium is withdrawing from the process to take AGL private and believes that the company’s demerger proposal is not in the interest of shareholders, consumers _*or the planet*," a source close to both parties said.



 and in a tweet on Sunday night. Mr Cannon-Brookes described the demerger path as a "_terrible outcome for shareholders, taxpayers, customers, Australia and the planet we all share_".

So, I can come and live at your place?

(what a phoney ... 20% and probably borrowed, anyway. PR stunt)


----------



## Smurf1976 (6 March 2022)

Dona Ferentes said:


> and in a tweet on Sunday night. Mr Cannon-Brookes described the demerger path as a "_terrible outcome for shareholders, taxpayers, customers, Australia and the planet we all share_".



A terrible outcome for his own personal wealth more likely.

Bottom line is the world has a major energy crisis unfolding. LNG and black coal prices have gone through the roof and oil price is rising rapidly now too.

In that context AGL's Loy Yang operation, mining its own coal at minimal cost, has massive value in the medium term and the hydro operations are likewise valuable albeit on a smaller scale. 

Australia NEM (all states except NT and WA) average wholesale electricity pricing on a calendar year basis:

2015 = $43.58
2016 = $63.05
2017 = $103.13
2018 = $85.86
2019 = $93.23
2020 = $57.62
2021 = $79.98
2022 to date = $145.88

This industry isn't going away anytime soon and if AGL can't turn that into profit then something's very wrong.


----------



## sptrawler (6 March 2022)

Smurf1976 said:


> A terrible outcome for his own personal wealth more likely.
> 
> Bottom line is the world has a major energy crisis unfolding. LNG and black coal prices have gone through the roof and oil price is rising rapidly now too.
> 
> In that context AGL's Loy Yang operation, mining its own coal at minimal cost, has massive value in the medium term and the hydro operations are likewise valuable albeit on a smaller scale.



Nailed it.
In a way, the take over offer IMO, is somewhat like the situation in Germany.
You get people with very strong ideological beliefs, in charge of critical infrastructure, the first thing to go out the window is critical thinking IMO.


----------



## orr (7 March 2022)

sptrawler said:


> You get people with very strong ideological beliefs, in charge of critical infrastructure, the first thing to go out the window is critical thinking IMO.



That's a reference to Frydenberg's actions on Andrew Vesey ...right?


----------



## StockyGuy (1 April 2022)

Divvies!   Nice to see when you haven't been paying any attention to it.


----------



## frugal.rock (1 April 2022)

StockyGuy said:


> Divvies!   Nice to see when you haven't been paying any attention to it.



Current SP plus the divvy still plenty less than last take over offer... if I was a holder, I'd be a little peeved, especially when looking at the last 7 years or so of the chart... 
At least the mutt looks like it's found a bottom. 
In this environment it should be sreaming back to and beyond $10, won't hold my breath on that front though.


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## sptrawler (2 April 2022)

The thing to remember @frugal.rock , they are still producing something people need and making a profit.
They still own key infrastructure, that the takeover parties wanted.
How they spend their profit is the key IMO.


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## frugal.rock (2 April 2022)

sptrawler said:


> How they spend their profit is the key IMO.



All true.
However, as a trader / investor, they make it easy for us to not have the decision about where to spend our profits. Just have a look at the chart !
But again, I will say it does look like a bottom is in, and quite solidly too.
Can I ask @sptrawler , are you a holder of these gaslighters 🤣 ?

I guess if MCB and co had 2 takeover bites, they might come back for a third go... 3 times lucky?


----------



## sptrawler (2 April 2022)

frugal.rock said:


> All true.
> However, as a trader / investor, they make it easy for us to not have the decision about where to spend our profits. Just have a look at the chart !
> But again, I will say it does look like a bottom is in, and quite solidly too.
> Can I ask @sptrawler , are you a holder of these gaslighters 🤣 ?



Yes, just checked, I bought in on the 21/12/2021 @$6.04. it is the first time I've owned a elect utility company, was never a big fan of the sector even though I worked in it, but with this current change over to renewables I think there is an opportunity for a clever operator.
Whether that proves to be AGL or not is another thing, but IMO they are cheap, they earn a lot of steady income and they own a lot of HV transmission infrastructure.
I'm not a trader, but I will sell a share like this, if I see a better opportunity to deploy the cash.


----------



## frugal.rock (2 April 2022)

You've sold me. 
Orders in for next week.


----------



## sptrawler (2 April 2022)

frugal.rock said:


> You've sold me.
> Orders in for next week.



Jeez I don't know about that, ask @Miner , when I buy in, it's normally a signal far everyone else to bail out. 🤣


----------



## frugal.rock (2 April 2022)

I've put the house on it... 😋
If it doesn't work out, off to the West Coast I go... looking for Simpson lookin guy...🐴


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## Miner (3 April 2022)

sptrawler said:


> Jeez I don't know about that, ask @Miner , when I buy in, it's normally a signal far everyone else to bail out. 🤣



Mate
You put me on the spot. I know to nut. Did nutting. Just a speculative digger.
All I can say AGL has a bright future in renewable energy.  It is the early hanging fruit compared to those who are playing on hydrogen.
In the next 4 years, people already established renewable energy would be laughing and experts will start drawing charts and I told you so.
I have unloaded half of my AGL holding as it was too hot to hold. For a change, the price shot up and I booked some profit. 
DYOR, however, I have been often wrong than right.


----------



## Sean K (3 May 2022)

MCBs only plan is to shut the lights off from what I can see. There's no structural replacement for coal and gas at the gigawatts required in the time frame he's suggesting. The only possibility is nuclear in the next 5-10 years.


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## Smurf1976 (3 May 2022)

Sean K said:


> MCBs only plan is to shut the lights off from what I can see. There's no structural replacement for coal and gas at the gigawatts required in the time frame he's suggesting. The only possibility is nuclear in the next 5-10 years.



Agree with the first half but so far as nuclear is concerned, there's zero chance one could be built in 5 years and even 10 years would be seriously pushing it in practice.


----------



## Sean K (3 May 2022)

Smurf1976 said:


> Agree with the first half but so far as nuclear is concerned, there's zero chance one could be built in 5 years and even 10 years would be seriously pushing it in practice.




Agree in the current environment as it would take years of politics to even agree to agree that we should form a committee to discuss it. The tipping point might be when the power goes out just often enough and we can't charge our devices, or the car. My overall opinion is we're running too fast to shut down without structural alternatives. Prove that the batteries and hydrogen work first, before shutting down. There's too much scare mongering going on too, from my perspective, without consideration of mitigation. Wolves and all. Might be the wrong thread, but it's obviously related.


----------



## Smurf1976 (3 May 2022)

Sean K said:


> My overall opinion is we're running too fast to shut down without structural alternatives. Prove that the batteries and hydrogen work first, before shutting down.




Has been discussed in another thread since it's not specific to AGL but in short, there wouldn't be too many engineers and others with technical knowledge who don't have serious concerns about the overall situation. Some might be publicly gagged by virtue of employment, or simply not interested in publicly commenting anyway, but there's a lot of concern.

In short the problem is not how to close coal. That's remarkably easy and is ultimately going to happen regardless.

The problem is how to replace it within the relatively limited available time and to do so in a manner that doesn't simply switch one problem for another problem.


----------



## divs4ever (3 May 2022)

StockyGuy said:


> Divvies!   Nice to see when you haven't been paying any attention to it.



 have had bad interactions with then for at least 15 years  , they are second on my 'black-list 'only  to David Jones 

 if you can make a profit there good for you 

 ( and yes i carry grudges  on family and companies alike , for decades )


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## divs4ever (3 May 2022)

Smurf1976 said:


> Agree with the first half but so far as nuclear is concerned, there's zero chance one could be built in 5 years and even 10 years would be seriously pushing it in practice.



there is ( and has been ) an agenda push away from nuclear power in the West  , i suspect your grandchildren  will live to regret that agenda

MAYBE  the BRICS  group will convince the world nuclear has it's place , but some nations are slow-learners ( and some are just broke )


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## StockyGuy (3 May 2022)

divs4ever said:


> have had bad interactions with then for at least 15 years  , they are second on my 'black-list 'only  to David Jones
> 
> if you can make a profit there good for you
> 
> ( and yes i carry grudges  on family and companies alike , for decades )



grudges4decades or grudges4ever


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## divs4ever (3 May 2022)

StockyGuy said:


> grudges4decades or grudges4ever



the longest one has been 1974 ( David Jones ) , i still MIGHT change my mind on some ( but make sure  you take big odds betting on that )

 ( half my living relatives since 1984 )


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## divs4ever (3 May 2022)

AGL finally made the 'blacklist in 2010  so is a relatively newcomer  to it ( but it took several events before the decision was made )


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## Miner (12 May 2022)

Between 1 and 10, 10 means surely and 1 means No, what score do you offer on the probability of demerger ?
Please see the AFR report


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## JohnDe (29 May 2022)

There was a time when I thought about buying.



> *AGL Energy eyeing demerger U-turn, strategic review in sight*
> 
> AGL Energy is considering a strategic review of its operations, casting doubt on a long-running move to split the company into a power retailer and generator business.
> 
> ...


----------



## omac (30 May 2022)

How realistic are these general claims of meeting targets, turning off coal, running off full renewables etc in Oz? I've read a couple of books by Vaclav Smil and Bjorn Lomborg who make seemingly well reasoned arguments that its possible but way under costed and run into other problems, highly dependent on country circumstance (eg Norway small pop, massive water resources) etc. Given the flippancy with which the pro renewable camp states how easy/quick it will all be but seeing the lack of progress in EU and most in the pro camp seem to be professional politicians of from unrelated fields. Additionally, with a very anti-nuclear attitude in Oz I'm concerned we'll be all running gennies in a few years. Hard to get objective information on it all given the emotive nature of the issue, keen for any suggestions for good info resources etc.


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## basilio (30 May 2022)

omac said:


> Vaclav Smil



Hadn't heard of this writer before so I had to check him out.

Certainly has an extensive CV.  I can see his reservations about how quickly we can move to a renewable energy society. Quite understandable and generally speaking realistic.  

In an ideal world we would be undertaking this transition over a 30-50 year period.  But in this world for a range of reasons the movement to clean renewable energy will need to much quicker - for a range of reasons.









						Vaclav Smil - Wikipedia
					






					en.wikipedia.org


----------



## UMike (30 May 2022)

omac said:


> How realistic are these general claims of meeting targets, turning off coal, running off full renewables etc in Oz? I've read a couple of books by Vaclav Smil and Bjorn Lomborg who make seemingly well reasoned arguments that its possible but way under costed and run into other problems, highly dependent on country circumstance (eg Norway small pop, massive water resources) etc. Given the flippancy with which the pro renewable camp states how easy/quick it will all be but seeing the lack of progress in EU and most in the pro camp seem to be professional politicians of from unrelated fields. Additionally, with a very anti-nuclear attitude in Oz I'm concerned we'll be all running gennies in a few years. Hard to get objective information on it all given the emotive nature of the issue, keen for any suggestions for good info resources etc.



None. It is the greatest scam of all time. Activists should not have this type of influence over company's commercial decisions.


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## basilio (30 May 2022)

UMike said:


> None. It is the greatest scam of all time. Activists should not have this type of influence over company's commercial decisions.



Total and absolute rubbish...

There are a number of critical reasons for quickly moving to clean renewable energy.

1) *Fossil fuels will and are finite. *Moving to a renewable energy source that won't disappear just makes sustainability sense

2) *Fossils fuel create dangerous pollution.  *The air, land and water pollution of coal, oil and gas damages our environment and kills millions of people.  Moving to clean renewable will  substantially reduce this health impact

3*) Renewable energy is now cheaper than fossil fuels.  *Even if one ignores the health and sustainability issues around basing a society on a diminishing resource these economic facts alone should make the change to renewable wind/solar other energy a no brainer. 

3*) Fossil fuel CO2 emissions are creating runaway global heating which left unchecked will make the earth  largely uninhabitable for humans *

This stark scientific reality is shared by 10's of thousands of scientists across many disciplines  who are only too aware of the impact of global warming and its cause. Pretending it's just activists is a lie.

Yep. I'm fed up to the back teeth with rubbish arguments against renewable energy that can't even see it's basic economic advantage over the current fossil fuel processes let alone the host of other important factors.


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## basilio (30 May 2022)

In the end this thread is about AGL as an investment. In that context consider this. Coal fired power at AGL are  getting too old, too unreliable and too expensive . They don't make sense (or dollars ) any more

AGL needs a new plan in sync with the Paris agreement​Mr Cannon-Brookes said that was a view that AGL shareholders agreed with since 53 per cent of them voted for a Paris-aligned decarbonisation plan at the company's AGM last year.



> "The shareholders want a Paris-aligned plan — and they don't want it because they're bleeding-heart greenies. They want it because a Paris-aligned plan is [the] most economic thing for the company.



"Having that will unlock financing and also have a lower cost of capital for the company, as ESG [environmental, social and governance] investors will come back to the company as well as banks and other companies who lend money."









						AGL's largest shareholder wants to help lower the cost of your power bills
					

AGL's biggest shareholder, billionaire businessman Mike Cannon-Brookes, is not ruling out another takeover bid for the energy giant but says he is focused on rebuilding the company for renewable generation.




					www.abc.net.au


----------



## Tyre Kicker (30 May 2022)

Smurf1976 said:


> Has been discussed in another thread since it's not specific to AGL but in short, there wouldn't be too many engineers and others with technical knowledge who don't have serious concerns about the overall situation. Some might be publicly gagged by virtue of employment, or simply not interested in publicly commenting anyway, but there's a lot of concern.
> 
> In short the problem is not how to close coal. That's remarkably easy and is ultimately going to happen regardless.
> 
> The problem is how to replace it within the relatively limited available time and to do so in a manner that doesn't simply switch one problem for another problem.




Exactly.

Great post.


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## frugal.rock (30 May 2022)

Miner said:


> Between 1 and 10, 10 means surely and 1 means No, what score do you offer on the probability of demerger ?



At the mo, No. 1

"Australia's AGL Energy ditches demerger, CEO and chairman to quit"

"Unfortunately for shareholders now, they have no chairman, no CEO and no strategy," Barrenjoey analyst Dale Koenders said."

Reuters article linked by others








						Australia's AGL Energy ditches demerger, CEO and chairman to quit By Reuters
					

Australia's AGL Energy ditches demerger, CEO and chairman to quit




					au.investing.com


----------



## Smurf1976 (30 May 2022)

basilio said:


> Coal fired power at AGL are getting too old, too unreliable and too expensive . They don't make sense (or dollars ) any more



Long term agreed.

Short term though, Loy Yang A is cash flow positive somewhere in the order of $400k per hour at present despite being only three quarters operational. That's based on the past 30 days' market pricing with three of the four generating units in operation.

It hasn't been anywhere near so profitable over the longer term that's true but right now the cash is, or at least should be, rolling in giving management some good news. 

Even if they not directly gaining due to internal hedging, it's still a competitive advantage over most others so they ought to be able to turn that into a pretty decent profit at least in the short term.


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## Smurf1976 (31 May 2022)

Smurf1976 said:


> Short term though, Loy Yang A is cash flow positive



Putting some figures around this one.

From the AGL demerger document on page 100:

Loy Yang A short run marginal cost (SRMC) = $12.35 / MWh

Bayswater SRMC = $21 / MWh

Figures read from chart so are approximate.

FY21 sent out generation, which in layman's terms is total generation less that used internally within the power station and in the case of Loy Yang also the mine:

Loy Yang A = 15,011 GWh (15,011,000 MWh)

Bayswater = 13,455 GWh (13,455,000 MWh)

From external sources compiling Australian Energy Market Operator (AEMO) data:

Average spot price as received by Victorian coal-fired generation (relevant to the Loy Yang operation) over the past year to date = $90.22 / MWh with that being $267.63 over the past 30 days.

Average spot price as received by NSW coal-fired generation (relevant to the Bayswater operation) over the past year to date = $138.37 with that being $437.21 over the past 30 days.

Gap between past year's spot price and stated SRMC for Loy Yang based on FY21 output = $1,168,906,570

Gap between past year's spot price and stated SRMC for Bayswater based on FY21 output = $1,579,213,350

So between them that's $2.748 billion in cash operating surplus.

The hydro stations at recent market pricing should be good for over $100 million a year operating surplus too. Roughly 1000 GWh output from AGL owned facilities x market prices in Victoria where the majority are located = $160 million. Less costs should still be a decent surplus.

Now suffice to say there are others in the industry in a very much worse position than that. Anyone paying the export price for black coal, and there are certainly some who are indeed paying that, is facing costs of just over $200 / MWh for fuel alone. For those using gas, with spot market exposure even the best (in a technical efficiency sense) plant will be incurring fuel costs close to $300 / MWh at present and for many it'll be even higher if the plant's less than optimal as most are in practice.

Long term future aside, if AGL can't make money out of all that in the short term then something's seriously wrong. There'd have to be a rather massive financial black hole somewhere to not be making a profit out of it right now. 

That said..... It raises the question. Is there in fact a black hole somewhere draining money?


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## mullokintyre (31 May 2022)

Smurf1976 said:


> Putting some figures around this one.
> 
> From the AGL demerger document on page 100:
> 
> ...



That average which was 90 bucks last year, based on what is happening now, will most likely be more than double for  this year, hence the free cash flow will also be significantly higher.
It might explain why the hyphenated ego wanted the demerger killed, as that cash generating would be needed to fund his plans to make AGL carbon nuetral.
Mick


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## sptrawler (31 May 2022)

mullokintyre said:


> That average which was 90 bucks last year, based on what is happening now, will most likely be more than double for  this year, hence the free cash flow will also be significantly higher.
> It might explain why the hyphenated ego wanted the demerger killed, as that cash generating would be needed to fund his plans to make AGL carbon nuetral.
> Mick



Absolutely nailed it, also why the $8b offer for the business was a joke, add to the operating profit, the underlying H.V infrastructure and it is worth a hell of a lot more IMO. 
Swap out the generating medium and you have a grid connected renewable site, that would no doubt receive Govt subsidies.


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## UMike (31 May 2022)

basilio said:


> Total and absolute rubbish...
> 
> There are a number of critical reasons for quickly moving to clean renewable energy.
> 
> ...



Yep the above is.

All of the above is part of the scam and if Renewable energy is cheaper then that is where Companies that aim for profits will go. Even with out the exorbitant subsidies on offer. They are not and thats why people with vested interests have gone in and sabotaged this once profitable business.


----------



## Belli (31 May 2022)

Like when in 2014, AGL asked for renewable energy targets to be scrapped.  Meant they would have had to invest in renewables.  Oh, that's right they did.  Constructed wind farms then promptly sold them off for a quick buck.  And takes too much effort it invest in the infrastructure to accommodate renewable energy.  Would mean a reduction in profit and shareholders would suffer. Hmm, a five year thinking plan or a 100 year thinking plan?


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## sptrawler (31 May 2022)

Belli said:


> Like when in 2014, AGL asked for renewable energy targets to be scrapped.  Meant they would have had to invest in renewables.  Oh, that's right they did.  Constructed wind farms then promptly sold them off for a quick buck.  And takes too much effort it invest in the infrastructure to accommodate renewable energy.  Would mean a reduction in profit and shareholders would suffer. Hmm, a five year thinking plan or a 100 year thinking plan?



Yes, hopefully they have seen the light, so to speak. Fortunately bought in under $6, I still think  there is upside, but I've been wrong before


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## sptrawler (18 June 2022)

AGL looking at another H2 hub, with more partners, they are already looking at a H2 hub in NSW with FFI.









						AGL, Brickworks plan hydrogen hub in Adelaide
					

The eight-strong consortium examining a hydrogen plant in Adelaide also includes partners from major Asian corporates in Japan and South Korea.




					www.afr.com
				




The country’s biggest cement manufacturer Adbri and Japan’s Osaka Gas are also part of the consortium that will study the project, which fits with AGL’s plans to repurpose its Torrens Island power station site in Adelaide for low-carbon energy. AGL gave no potential cost of timing for the project.
​


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## divs4ever (18 June 2022)

sptrawler said:


> AGL looking at another H2 hub, with more partners, they are already looking at a H2 hub in NSW with FFI.
> 
> 
> 
> ...



 cheers 

 will consider lowering  my ABC  top-up order ( which is in the market , and narrowly missed on Friday  )

 feels like a 'greenwash ' feel-good  R&D money-pit  to me 

 haven't  a current top up order in for FMG  but might move that 'attractive price ' closer to $15 ( i can see such projects bleeding cash in the short term )


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## sptrawler (18 June 2022)

divs4ever said:


> cheers
> 
> will consider lowering  my ABC  top-up order ( which is in the market , and narrowly missed on Friday  )
> 
> ...



What matters is if the company rhetoric fits the media narrative, which is what moves the herd IMO.
If you are going to apply logics to it, I think you will miss out on a lot of opportunities, the narrative now is, go green young man, go green.
If AGL said we are going to replace our goal fired generation, with green hydrogen fired gas turbines by 2035, they would triple in price and receive endless Govt handouts, as long as you sold out by 2030 you would make a handsome profit.
I don't think it will apply to all energy companies, only those with leverage, as soon as the Government says we want this to happen and they don't own it, the companies go into overdrive to milk it.🤣

Look at afterpay, some on here including myself said it is a really bad business model that was at $8, they went to $180 and now everyone is saying that is a really bad business model.
Did we call it right? Yes, did we miss an opportunity by not following the media ramping, Yes.
just my thoughts. But applying logics that goes against a media driven narrative, just rings alarm bells to me, politics is driven by it, people are driven by it, trying to apply logics to it doesn't cut it.
If logics drove the market, people wouldn't be paying millions of dollars, for a pile of bricks on a tiny block of land in Sydney IMO.
I only bought 1,000 at just under $6, if in the current rout they get back there I will get another 1,000 may be crazy but people need power, renewables need HV access.
The Government has upped the carbon target to 43%, the only ones who will be bleeding cash are the taxpayer, but it is for a good cause IMO.


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## divs4ever (18 June 2022)

sptrawler said:


> What matters is if the company rhetoric fits the media narrative, which is what moves the herd IMO.
> If you are going to apply logics to it, I think you will miss out on a lot of opportunities, the narrative now is, go green young man, go green.
> If AGL said we are going to replace our goal fired generation, with green hydrogen fired gas turbines by 2035, they would triple in price and receive endless Govt handouts, as long as you sold out by 2030 you would make a handsome profit.
> I don't think it will apply to all energy companies, only those with leverage, as soon as the Government says we want this to happen and they don't own it, the companies go into overdrive to milk it.🤣
> ...



 yes i miss out on some opportunities  , but is that a good or bad thing ( for example i am still single , but you should look at 'the ones that got away ' .. they were going places i didn't want to )

 as mentioned elsewhere AGL is on my  'AVOID' list   and i am not entirely comfortable  that two holdings  i currently have ( BKW and ABC ) are considering  business relationships with such a company ,  i have seen what AGL calls  corporate governance  (  and bought into CWN instead for a useful profit ) and ABC has already had the odd lapse in oversight 


 and Afterpay/SQ2  yes i still don't like the model  not  at $2 nor at $200   ,  that money can always find a comfortable home elsewhere  , all that means is somebody else has an easier time getting their share of SQ2 ( and AGL )

 BTW i am more of a Blue Movement fan  , Green is for uni. students ( as we will all find out )


----------



## sptrawler (18 June 2022)

divs4ever said:


> yes i miss out on some opportunities  , but is that a good or bad thing ( for example i am still single , but you should look at 'the ones that got away ' .. they were going places i didn't want to )
> 
> as mentioned elsewhere AGL is on my  'AVOID' list   and i am not entirely comfortable  that two holdings  i currently have ( BKW and ABC ) are considering  business relationships with such a company ,  i have seen what AGL calls  corporate governance  (  and bought into CWN instead for a useful profit ) and ABC has already had the odd lapse in oversight
> 
> ...



Yep I fully appreciate your point, on my hate list is Santos, AMP and Telstra, even if I think they are a great buy, like TLS at $2.80 I still can't get myself to buy them.
Maybe we have the same character flaw for investing.🤣


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## divs4ever (18 June 2022)

have held  AMP and TLS in the past   and taken the opportunity  to exit BEFORE i regretted buying in 

 but yes i like to know the 'governance ' risk  before buying into a company   ( high risk  MUST be  known in advance , for me   , which is why i generally laugh at ESG rebranding  practices , like the big 4 banks for example  )

 a similar  incident ( for me  ) was when IPL entered a JV with CTP  ,  i took a quick look to estimate how much profit  i was taking  and rammed in a IPL sell order ( and haven't regretted it for a second )


----------



## sptrawler (18 June 2022)

divs4ever said:


> have held  AMP and TLS in the past   and taken the opportunity  to exit BEFORE i regretted buying in
> 
> but yes i like to know the 'governance ' risk  before buying into a company   ( high risk  MUST be  known in advance , for me   , which is why i generally laugh at ESG rebranding  practices , like the big 4 banks for example  )
> 
> a similar  incident ( for me  ) was when IPL entered a JV with CTP  ,  i took a quick look to estimate how much profit  i was taking  and rammed in a IPL sell order ( and haven't regretted it for a second )



At the end of the day, investing is personal, you have to be able to sleep at night and you have to be happy with your decisions, if you can't you shouldn't be investing IMO.
It sounds like we are on the same page.
My portfolio is currently down a lot, yet I care very little, so stress is zip.


----------



## divs4ever (19 June 2022)

i was  saying to someone last Thursday that on Tuesday  i tore up an  easy $xx,xxx  ( more than the new car he was buying )  alone , but the GOOD news  was the portfolio  was big enough to take that hit  and still exist  ,

 i expect more red days like that in the foreseeable future  , i will be looking to see if 6,000  holds ( for the XJO )  in the next 6 months


----------



## qldfrog (28 June 2022)

Good news for AGL:
Change of tarifs received, less than 3months after moving with them, increases well above 10%
Including in items like solar daily charge..should i blame Putin?

Then an interesting article on TEAM aka Atlassian https://www.smartcompany.com.au/startupsmart/analysis/atlassian-unprofitable-valuation-adam-schwab/
A company which has never made money may not be a great model for AGL shareholders..just saying


----------



## mullokintyre (29 June 2022)

qldfrog said:


> Good news for AGL:
> Change of tarifs received, less than 3months after moving with them, increases well above 10%
> Including in items like solar daily charge..should i blame Putin?
> 
> ...



An excellent analysis of another overvalued, over hyped company.
The  problems outlined are only going to get bigger as more and moire  tech smarties build a better interface product.
Mick


----------



## sptrawler (29 June 2022)

mullokintyre said:


> An excellent analysis of another overvalued, over hyped company.
> The  problems outlined are only going to get bigger as more and moire  tech smarties build a better interface product.
> Mick



And possibly the reason he was trying to get hold of AGL, at least it generates income from an essential service, the tech sector is dependent on staying ahead of the pack which with technology isn't easy.


----------



## sptrawler (9 August 2022)

Well it looks as though the green dream is moving on, time will tell.








						AGL and Fortescue Future Industries' green hydrogen feasibility study underway in the Hunter
					

AGL Energy  today announced an expanded feasibility study with additional partners is underway to explore the development of a green hydrogen and ammonia production facility at AGL’s Hunter Energy Hub.




					www.agl.com.au
				



AGL Energy (AGL) today announced an expanded feasibility study with additional partners is underway to explore the development of a green hydrogen and ammonia production facility at AGL’s Hunter Energy Hub.

Independent technical consultancy GHD Advisory is carrying out the feasibility study for AGL as the hub provider and Fortescue Future Industries (FFI) as the exclusive producer of green hydrogen at the site. 

The feasibility study, which is mapping key operational and commercial plans for the project as well as developing a production timeline, is also leveraging the input of additional key industry and consortium partners across multiple sectors which have signed Memorandums of Understanding related to the project:


----------



## sptrawler (3 October 2022)

In my humble opinion AGL is doing exactly the right thing, go hard and go early, exit coal by 2035.
The deployment of commercially viable renewable generation and battery storage could be saturated by 2035 IMO, from then on the retirement of at call generation may well be more difficult, so AGL getting in early and picking off the low hanging load could prove to be a master stroke IMO.
Just my musings.








						AGL joins Australia’s big coal exodus, experts and locals respond | Climate Council
					

Australia's biggest polluter, AGL, has today announced the early closure of the nation's most emissions intensive power station in Victoria’s Latrobe Valley, with the company planning to exit out of coal completely by 2035.




					www.climatecouncil.org.au
				



AUSTRALIA’S BIGGEST POLLUTER, AGL, has today announced the early closure of the nation’s most emissions intensive power station in Victoria’s Latrobe Valley, with the company planning to exit out of coal completely by 2035.


----------



## mullokintyre (15 November 2022)

It would appear that Atlassian Boss Mike Cannon Brookes has got his way and installed  "independant' directors more to his liking.
This has been lauded by many, including  Tim Buckley from Climate Energy Finance . 
From The Australian


> Climate Energy Finance said AGL had been a global laggard acting on climate science.
> "This board renewal is critical for AGL investors given the opportunity to start to reverse the $10bn of shareholder wealth destruction in the last six years, but also for the wider context given AGL is a key Australian energy sector incumbent, with financial resources and staffing that can be leveraged constructively, with the right leadership," Climate Energy Finance director *Tim Buckley* said.



AGL has at least in the most recent history made a profit profit and  paid dividends.
Atlassian  has never even made a profit, much less paid a dividend.
It also had 13 billion wiped off its MC in one day on Nov 5th, and from its high of USD468 back in October 2021,  has fallen to 135 overnight.
The percentage fall from all time high is pretty much the same for both companies.
So, what exactly does MCB and his group to the table?
Mick


----------



## qldfrog (15 November 2022)

mullokintyre said:


> It would appear that Atlassian Boss Mike Cannon Brookes has got his way and installed  "independant' directors more to his liking.
> This has been lauded by many, including  Tim Buckley from Climate Energy Finance .
> From The Australian
> 
> ...



It brings a beautiful wokeness, a great shiny green hue of both economical and scientific incompetence .
Agl is a buy


----------



## sptrawler (15 November 2022)

qldfrog said:


> It brings a beautiful wokeness, a great shiny green hue of both economical and scientific incompetence .
> Agl is a buy



It will give MCB and his group a dose of reality.


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## Craton (15 November 2022)

Locally and adding to AGL's solar and wind farms, the first sod of soil was turned for AGL's BESS project.


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## orr (21 November 2022)

Now's the only time since the ousting of Andrew Vesye I've contemplated putting a dollar toward this company.... but it's a long road back. So much so many oppertunaties squandered.     If only I had the foresight, the billion$, the contacts/network, the Will......


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## Smurf1976 (22 November 2022)

Craton said:


> Locally and adding to AGL's solar and wind farms, the first sod of soil was turned for AGL's BESS project.



Separate to that one at Broken Hill, at Torrens Island (Adelaide) AGL's battery project is well under construction and due to be operating next year.


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## sptrawler (24 November 2022)

AGL to accelerate the closure of Torrens B station nearly a decade earlier than planned.









						Australia's AGL Energy announces closure of Torrens Island 'B' power station
					

Australia's AGL Energy Ltd on Thursday disclosed plans to shut down its gas-fired Torrens Island 'B' power station in South Australia in June 2026, having closed the final unit at the 'A' power station just a few months ago.




					www.reuters.com
				



Nov 24 (Reuters) - Australia's AGL Energy Ltd (AGL.AX) on Thursday disclosed plans to shut down its gas-fired Torrens Island 'B' power station in South Australia in June 2026, having closed the final unit at the 'A' power station just a few months ago.

The country's top power producer said the decision to shut down power station 'B', which commenced operations in 1976, was made after consulting stakeholders such as the South Australian government and was done in part due to the company's transformation of Torrens site into a low-carbon energy hub.
AGL in September flagged the closure of the final 'A' station unit at the Torrens Island site and said it will begin the decommissioning process, which involves the removal of all liquids and gases from the plant.
Separately, AGL unveiled plans in September to spend up to A$20 billion ($13.46 billion) on renewable energy by 2036 and bring forward its exit from coal-fired generation by a decade.

The first of the four power-generating units at the station had been deactivated in October 2021, and AGL expects all units to be retired by June 30, 2026.


These closure plans are not expected to have a material impact on underlying profit in fiscal 2023 or over the longer term owing to the economic viability of the station, the company added.









						AGL to close South Australia power plant
					

AGL has announced plans to close a gas-fired power station in Adelaide in 2026, following extensive consultation with stakeholders.




					www.perthnow.com.au
				




I do hold.


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## Maelinar (24 November 2022)

Some quick maths, MCB initial position at $8.62 (5.67m + 19.1m shares) were worth $653m and at current share value $7.86 is now worth $595m.

On the flipside, as AGL is a nice dividend company
@ $0.10 - $7.58m
@$0.20 - $15.16m
@$0.40 - $30.3m
@$0.50 - $37.9m
@$0.60 - $45.4m

Masterstroke ?


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## sptrawler (2 January 2023)

Still in the box seat as the Government ties itself up in knots more and more, now that the major competitor has gone green, it opens more avenues for AGL to leverage its market position and close plants when it suits as opposed to when they are told.
I expect some serious announcements by the end of 2023 regarding the East Coast electricity supply and I'm hoping they are a positive for AGL. But I've been disappointed before, however still hold on a purchase price of $6.05, so still in the black.


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## CanOz (2 January 2023)

sptrawler said:


> Still in the box seat as the Government ties itself up in knots more and more, now that the major competitor has gone green, it opens more avenues for AGL to leverage its market position and close plants when it suits as opposed to when they are told.
> I expect some serious announcements by the end of 2023 regarding the East Coast electricity supply and I'm hoping they are a positive for AGL. But I've been disappointed before, however still hold on a purchase price of $6.05, so still in the black.



There are several factors that could potentially impact the advance of AGL Energy's share price. Some potential positives for the company's share price include:

Strong financial performance: AGL Energy has a strong track record of financial performance, with consistently high revenues and profits. This could increase investor confidence in the company and lead to an increase in its share price.
Diversified operations: AGL Energy has a diverse range of operations, including electricity generation, gas exploration and production, and retail energy sales. This diversification could provide the company with a degree of stability and help to protect it from fluctuations in any one particular area of the energy market.
Government support: The Australian government has implemented a number of policies and initiatives to support the renewable energy sector, which could benefit AGL Energy as a major player in the industry.
On the other hand, there are also several potential negatives that could impact AGL Energy's share price:

Competition: AGL Energy faces competition from other energy companies in the Australian market, which could impact its revenues and profitability.
Regulatory risks: The energy sector is heavily regulated, and changes to regulations or government policies could have an impact on AGL Energy's operations and financial performance.
Environmental risks: The energy sector is also subject to increasing scrutiny and pressure to reduce its environmental impact. If AGL Energy is perceived as not taking sufficient action to address environmental concerns, it could negatively impact its share price.
It's important to keep in mind that these are just a few of the potential factors that could impact AGL Energy's share price, and the company's actual performance may be influenced by a wide range of other factors as well.


Cheers,


CanOz


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