Australia's largest energy retailer and generator AGL has warned of further pain after slumping to a $2.06 billion full-year net loss as lower power prices continue to weigh on its financial performance.

The FY loss had been anticipated after the company in February outlined writedowns related to onerous wind farm offtake agreements.

It was also hurt by higher gas costs and a slide in wholesale power prices amid falling demand and an increase in rooftop solar powered generators for the home generation.

Underlying profit for the year to June 30 dropped 34 per cent to $537 million, in the middle of the company's $500 million-$580 million guidance range.

AGL on Thursday warned of a further financial hit, with underlying profit for the current financial year expected to drop to between $220 million and $340 million.

The lower guidance reflects a "further material step down" in wholesale electricity earnings and the impact to wholesale gas margins, the company says.

Shares in the company slumped on the news.

By 1215 AEST, the stock was down 3.8 per cent to $7.31 in a firm Australian market.

The country's biggest operator of coal-fired power plants has been buffeted by the impact of coronavirus lockdowns on electricity demand and growing renewable energy generation.

Earlier this year, the company announced it would split into two.

Under the plan, the main retail business will be demerged into a new company, AGL Australia, under Christine Corbett, while interim CEO Graeme Hunt will lead a new coal-focused generator Accel Energy.

Accel will retain a 15-20 per cent stake in AGL Australia.

AGL Energy on Thursday said it was on track to implement the proposed demerger in the fourth quarter of FY22, subject to regulatary and shareholder approvals.

The company declared a final unfranked dividend of 34 cents per share, down from 51 cents last year.