Origin Energy (ORG) H2 2024 earnings summary

Executive summary

• Significant uplift in earnings year-over-year, driven by higher wholesale electricity prices, improved LNG production, and recovery in Energy Markets, partially offset by lower Octopus Energy earnings due to non-repeat of prior year wholesale price recovery.

• Strong progress on energy transition strategy, with increased investments in renewables, storage, and hydrogen projects, as well as customer support initiatives.

• Extension of Eraring power station operations to August 2027, supporting electricity supply security, reliability, and emissions targets.

• Enhanced customer support, including AUD 50 million spent on hardship programs and no customers paying above the default market offer.

Financial highlights

• Underlying profit rose to AUD 1.183 billion (from AUD 747 million); underlying EBITDA reached AUD 3.528 billion, up from AUD 3.107 billion.

• Statutory profit increased to AUD 1.397 billion (from AUD 1.055 billion); final fully franked dividend of AUD 0.275 per share, totaling AUD 0.55 for the year.

• Return on capital employed at 15.2% overall; Energy Markets ROCE 10.4%, Integrated Gas ROCE 20.6%.

• Free cash flow up AUD 506 million to AUD 928 million; APLNG distributed AUD 1.38 billion to Origin; production up 3% year-over-year.

• Operating cash flow up AUD 1.7 billion to AUD 1.1 billion, reflecting higher cash from energy markets and improved working capital.

Outlook and guidance

• FY 2025 Energy Markets EBITDA expected between AUD 1.1 billion and AUD 1.4 billion, down from FY 2024 due to lower wholesale tariffs and higher coal costs.

• Octopus Energy share of earnings expected to rise to AUD 100–200 million, driven by lower REGO prices and customer growth.

• Integrated gas production guidance: 685–710 PJ, with CapEx and OpEx at AUD 2.83 billion; LNG trading EBITDA expected at AUD 400–450 million.

• Cost to serve expected to modestly improve in FY 2025, with AUD 100–150 million reduction targeted by FY 2026.