Speaking at the company’s annual meeting, chairman Peter Botten confirmed that following a “first strike” last year, the company got its 2021 remuneration report across the line having taken the feedback it received on AGL’s remuneration practices “seriously”.
Mr Botten said that despite “a challenging year for AGL”, he is optimistic about the future chiefly due to the company’s new “comprehensive program” to improve performance.
In particular, he noted, the 2022 financial year will be a significant one for AGL’s history as the proposed demerger is progressed.
“The proposed demerger will position us best to meet the existing and future challenges of the company including through refreshed board and management teams that are [focussed] and have the appropriate skills and experience to respond to evolving ESG expectations, the energy transition and new technologies,” Mr Botten said.
AGL’s shares have been in freefall for much of this financial year, before rebounding slightly on Wednesday to hit $5.7 towards close.
Noting AGL’s difficult results, including a statutory loss after tax of $2.1 billion, Mr Botten said the main drivers of the decrease were a reduction in wholesale electricity prices, lower electricity demand due to COVID-19 lockdowns, mild weather and increasing penetration from rooftop solar.
“We are not alone in experiencing the impact of the decline in wholesale electricity prices, which has also significantly affected others in the industry,” Mr Botten said.
“That is why we have committed to reducing our operational costs by $150 million by the end of FY22 and reducing our sustainable capital expenditure by $100 million by FY23. We have also announced the sale of $400 million of non-core assets by the end of FY22. These measures will conserve capital and strengthen the balance sheet of the business.”
He acknowledged that the earning outlook for 2022 will, however, be materially reduced on FY21 and sit in the range of $220 million and $340 million.
But, despite the uncertainties, Mr Botten acknowledged the company’s intent to meet net-zero emission ahead of 2050.
“We believe this is possible, but it must also be done in a way that doesn’t ignore the essential role that our thermal assets have to play in supporting the transition by keeping the lights on and continuing to provide reliable and affordable energy, as we and others invest in the change that is needed to bring new, renewable energy sources into the market,” he said.
Accusations of ‘greenwashing’
But in a statement issued following AGL’s meeting, Greenpeace accused the company of “greenwashing”, noting that a large number of shareholders voted against its remuneration plan in opposition to its “polluting and unprofitable path”.
“Despite AGL’s blatant attempts to greenwash its image by splitting and rebranding, the fact remains that AGL is a coal burning company and will continue to be Australia’s biggest climate polluter under its current plan,” Greenpeace Australia Pacific chief executive David Ritter said, calling for the company to disclose interim emissions targets towards the Paris climate goals.
“The results of today’s votes show that shareholders are opposed to AGL’s plan to continue down the polluting and unprofitable path of burning more coal. Instead of slapping green lipstick on a pig, AGL should do the right thing for the young people of Australia and for its investors by closing its coal burning power stations and replacing them with renewables by 2030 at the latest.”
Maja Garaca Djurdjevic
Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.
