Origin Energy (ORG) H2 2024 earnings summary

Executive summary

• Earnings and statutory profit rose sharply year-over-year, driven by higher wholesale electricity prices, Energy Markets recovery, and increased APLNG/Integrated Gas production, partially offset by lower Octopus Energy UK retail earnings due to non-repeat of prior year price recovery.

• Strong progress on energy transition strategy, with major investments in renewables, storage, hydrogen, and customer support initiatives, including $50–100 million spent on hardship programs and no customers paying above the default market offer.

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

• Growth in retail customer accounts and expansion of the Kraken platform and virtual power plant Loop.

Financial highlights

• Statutory profit rose to $1,397 million (up from $1,055 million in FY23); underlying profit increased to $1,183 million (from $747 million in FY23); underlying EBITDA reached $3,528 million.

• Energy Markets underlying EBITDA up $617 million to $1,655 million, mainly from higher electricity profit and lower fuel costs; Integrated Gas underlying EBITDA up $32 million to $1,951 million.

• APLNG distributed $1.38 billion to Origin; production up 3% year-over-year to 694 PJ.

• Final fully franked dividend of 27.5 cents per share, totaling 55 cents for FY24, representing a 73% payout of adjusted free cash flow.

• Adjusted Net Debt/EBITDA at 1.0x, with adjusted free cash flow at $1,296 million, up from $965 million in FY23.

Outlook and guidance

• FY25 Energy Markets underlying EBITDA expected between $1,100–$1,400 million, with electricity gross profit to decrease due to lower wholesale tariffs and higher coal procurement costs.

• Octopus Energy FY25 EBITDA contribution projected at $100–$200 million, benefiting from lower REGO prices and continued customer growth.

• Integrated Gas: APLNG FY25 production guidance 685–710 PJ; LNG trading EBITDA expected at $400–$450 million.

• Cost to serve targeted to reduce $100–$150 million from FY24 to FY26.

• Gas margin guidance for FY25 in the $3–4/GJ range.