Returns are rising for Australia’s largest electricity and gas retail business, with Origin Energy reporting an underlying profit up by more than 25 per cent and guidance that gas earnings will continue to rise.
But the company’s results for the 2024/25 financial year, released on Thursday, also showed earnings from its electricity business fell by $224 million due to higher coal prices and lower retail tariffs.
The results come amid heightened attention on Australia’s energy market, following a federal election fought over nuclear power and continuing debate over net-zero targets and investments in renewable energy projects.
Origin Energy reported an underlying profit of $1.49 billion, up by $370 million on last year, and delivering shareholders a dividend of 30 cents per share, up from 27.5 cents.
The company’s profit was helped significantly by its stake in Australia Pacific LNG, chief executive Frank Calabria said, as the natural gas producer delivered $797 million in fully franked dividends.
“Origin’s financial and operational performance in FY25 underscores the strength of our portfolio, as forecast lower earnings from energy markets and Octopus Energy were balanced by higher earnings from integrated gas relating to (liquid natural gas) trading,” he said.
Despite its higher profit, Origin Energy’s earnings before interest, taxes, depreciation and amortisation fell by $117 million, and its gross profit from electricity dropped by $224 million.
The falls were blamed on higher coal prices and lower retail tariffs and came even though the company added 104,000 customers during the year.
Its investment in UK provider Octopus Energy also delivered an $88 million loss due to large investments.
Origin Energy would continue to invest heavily in renewable energy projects, Mr Calabria told investors, including batteries at its Eraring and Mortlake sites, and the Yanco Delta Wind Farm in NSW’s Riverina region.
However, its plans for capital expenditure would depend on the future of its coal-fired Eraring Power Station, he said, which the company had agreed with the NSW government to operate until 2027.
“Our job really here is to navigate this transition effectively for customers and shareholders and what we’re really looking at is how do you continue to allocate capital wisely in a market that has uncertainty,” he said.
“We are preparing for a variety of scenarios to be ready to execute on those but the final decisions of both timing and choice will be determined by a range of factors.”
Origin predicted its future underlying earnings should reach between $1.4 billion and $1.7 billion in the coming financial year, with electricity gross profit stabilising while profits from gas improved “moderately”.
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