Origin profit up, signals dividend return
Energy giant Origin has more than doubled underlying profit thanks to improved results from its retail and gas export operations.
Australian Associated PressAugust 16, 201810:03am
Origin Energy has more than doubled underlying profit on the back of improved performance in its retail and gas production operations, and signalled a return to dividend payouts in the current financial year.
Australia's top electricity and gas retailer reported a statutory net profit of $218 million for the year to June 30, compared to a $2.2 billion net loss a year earlier, when results had been hit by impairment charges.
Full-year revenue was up seven per cent to $14.8 billion.
Underlying profit for the year rose to $838 million, from A$400 million in the previous year, boosted by climbing oil and power prices and increased production at its stake in the Australia-Pacific LNG project.
The energy markets business recorded underlying earnings of $1.45 billion for the year, falling short of the company's forecast of between $1.78 billion and $1.85 billion.
The result comes as rising power prices bring political heat on the sector to slash household electricity bills, after years of steep price growth.
Underlying earnings in the integrated gas business increased 67 per cent to $1.25 billion, underpinned by record production at APLNG.
The company reported a net debt position of $6.5 million, meeting its target to cut debt to below $7 billion by 2018, following the sale of its Lattice Energy business.
Origin did not declare a final dividend but said the outlook supported reviving dividends in the current financial year.
"Having materially reduced debt and lifted business performance, Origin is now in a much stronger financial position and more resilient to commodity cycles," Chairman Gordon Cairns said.
"Subject to board approval and no material adverse change in business conditions, our medium-term outlook supports recommencement of dividends in FY2019," he added.
For 2018/19, the electricity retailer expected underlying profit to be higher and debt lower.
It expects the energy market segment to report underlying earnings of $1.50 billion to $1.60 billion.
Australia Pacific LNG's production for the financial year is expected to be between 660-690 petajoules and is targeting operating break-even of $US22-26 per barrels of oil.
ORIGIN ENERGY TURNS FY PROFIT:
* Net profit $218m vs $2.2b loss
* Revenue up 7pct to $14.8b
* No final dividend, unchanged