ASX Drops as AGL Shares Fall on Earnings

What made the news today?

• AGL disappoints sending share price plunging

• Megaport losses continue to widen.

• Channel Nine wins the Olympic rights

• A breakthrough in Alzheimer's drug?

• SEC probing crypto exchange

The ASX 200 followed Wall Streets weak lead overnight, finishing the day down 39.80 points, or 0.53%, at 7,490.30, bringing the weeks drop to 0.9%. AGL Energy was the big story today, falling 10 per cent after it downgraded full-year earnings guidance. More on AGL below.

No sector was spared with all 11 declining in value, with Utilities dropping the most (-2.73%) followed by Real Estate (-1.62%). The best performing sector was industrials which fell by only 0.13%. The decline that occurred today was very widespread, as evidenced by the fact that every industry finished in the red.

Across the entire ASX200, AGL Energy and Coronado Global Resources, were the worst performing stocks on the day, falling in price by 10.33% and 6.05% respectively.

Quick Singles

• Kraken, a cryptocurrency exchange, is being investigated by the US Securities and Exchange Commission for potential breaches in rules for offerings to US investors. The probe is reportedly at an advanced stage, with a settlement expected to be announced soon. The exact offerings being scrutinized are currently unknown.

• The AFR reported today that Gautam Adani, whose Indian corporate empire is under siege over fraud charges, repaid a $US1.1 billion ($1.6 billion) share-backed loan last week after facing a margin call of more than $US500 million.

• Charter Hall Long WALE (ASX: CLW) share price decreased by 0.4% to $4.60 today following the release of its FY23 half-year results where it reported operating earnings of $101.2m.

• Arena REIT (ASX: ARF) share price increased by 0.8% to $3.74 following the presentation of its half-year results for the six months ending 31 December, reporting $29.9 million up 8.6% from the pcp.

• Nine Entertainment (ASX:NEC) rose by 0.9% after winning the coverage rights for the next five Olympic Games

Not subscribed? Sign-up below to receive all the ASX news straight to your inbox

Top Story

AGL Energy Ltd Shares Plunge 10.3% After Disappointing 1H FY23 Results

The share price of AGL Energy Ltd (ASX: AGL) took a major hit on Thursday, February 9, after the company released its half-year results for the six months ending December 31 (1H FY23). AGL's underlying net profit after tax (NPAT) decreased by 55% from the previous comparable half year (1H FY22) to $87 million due to plant closures and "challenging energy market conditions," as stated by CEO Damien Nicks. This result fell short of market expectations of around $160 million.

In response to the disappointing results, the AGL board of directors declared an interim dividend of 8 cents per share, unfranked, which is half of the 16 cents per share dividend paid out in 1H FY22 and 74% less than the 31 cents per share interim dividend paid in 1H FY21. The management stated that the interim dividend is in line with its policy to target a payout ratio of 75% of underlying profit after taxes for the full year, which is nearly met with 672.75 million outstanding shares and NPAT of $87 million. The dividend payment date is set for March 24, with the option for shareholders to participate in the dividend reinvestment plan (DRP) by February 24.

Barrenjoey equity analysts described the results as a "miss" on gross earnings, net profits, and dividends, while UBS described it as "soft" with a slower-than-expected pass-through to customers of rising electricity prices last year. This loss comes after a tumultuous 2022, which included an overhaul in AGL's board and top management after the collapse of a controversial plan to split the business in two, sparked by a campaign led by tech billionaire Mike Cannon-Brookes and his company, Grok Ventures, becoming AGL's biggest shareholder.

Despite the challenges, CEO Damien Nicks remains optimistic about AGL's future, giving an upbeat outlook for the second half and beyond. The market, however, did not react positively to the halving of the interim dividend and the significant miss on underlying profit. The share price of AGL Energy Ltd fell 10.7% intraday to $7.09 per share, bringing its current unfranked dividend yield to 2.5%.

In conclusion, the release of AGL Energy Ltd's 1H FY23 results has sent shockwaves through the market, causing the company's shares to plummet and fueling concerns about its ability to navigate the crucial task of decarbonization. While CEO Damien Nicks remains optimistic, investors will be closely watching the company's progress in the coming months.

Movers and Shakers

✅Biggest Winners

De Grey Mining Limited (ASX: DEG) share price was up 3.2% to $1.46. followoing an update on its' Mallina gold project. According to the announcement, 14 significant financial institutions have submitted non-binding offers for debt financing to support the project's development. Management observes that the bids contain commercial terms commensurate with the project's Tier 1 quality and jurisdiction.

Nuix Ltd (ASX: NXL) share price increased by 5.1% to $1.55 continuing its' positive trend up after a painful 12 months for investors. This followed the announcement on Tuesday that Nuix won a court case against their former CEO seeking $187 million in damages plus interest.

❌ Biggest Losers 

Megaport (ASX: MP1) share price fell by by 4.9% to end the day at $5.89. Megaport released their half-year results today where reported losses of $9.2 million, and a cash balance drop from $56.9 million to $39.2 million.

Mirvac Group (ASX: MGR) share price fell 4.6% to $2.29. Mirvac reported an increase in operating earnings and dividends, but a significant decline in statutory profits.

Small-Cap of the Day

Argenica Therapeutics' Breakthrough Drug Shows Promise in Treating Alzheimer's

Argenica Therapeutics (ASX:AGN) shares are up 14.8% today after the company revealed that ARG-007 effectively suppressed the aggregation of human recombinant Amyloid-Beta (Abeta) in a cell-free Abeta aggregation assay paradigm.

Abeta aggregation is believed to be one of the primary causes of Alzheimer's disease, with Abeta buildup in senile plaques leading to memory loss and disorientation, according to the business. At 16 hours after delivery of ARG-007, a 25 M dosage of ARG-007 reduced Abeta aggregation by more than 50 percent compared to vehicle controls.

The company will now conduct animal studies to confirm the efficacy of ARG-007 in the treatment of Alzheimer's disease and will keep the market informed when milestones are reached.

Economic Outlook

10th February

• US Initial Job Claims (est. 194k)

That's it from the team at ASX-News today. We hope you enjoyed our EOD wrap-up. Good night and happy investing!