Origin shares sink as FY profit, earnings guidance miss forecasts
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More news: Origin Energy shares slumped on the ASX after Australia’s top energy retailer and gas producer missed consensus full-year profit estimates by 10%.
Origin shares were down 8.3% to $9.72 by 10:50am AEST.
Jarden analysts said that despite "very strong" cash flow coming in 60% above average forecasts, underlying NPAT and FY25 energy markets EBITDA guidance missed consensus by 10% and 12.5% respectively.
What they said: "Inflation and blowout in bad and doubtful debts saw [Origin] miss its cost-out target, which has been reset," Jarden analysts said.
"We expect the stock to trade lower today as market resets expectations around future energy markets profits."
Strong retail margins deliver stellar profit for Origin Energy
The news: Origin Energy cited higher wholesale electricity and gas prices as the driving force behind a bumper 32% increase in net profit to $1.397 billion for the full-year ended 30 June, 2024.
The numbers: Strong performance in the integrated Energy Markets division, which retails gas and electricity was underpinned by higher availability of the power generation fleet, including Eraring Energy which outputted 14.4 TWh, up 2.1 TWh a year earlier.
Underlying EBITDA for the energy markets division more than doubled to $1.67 billion for the full year. However, underlying earnings in the energy markets division is expected to temper to $1.1 billion to $1.4 billion in FY 2025.
Plumper margins in the retail business helped offset lower earnings from the AP LNG business and UK electricity retailer Octopus Energy, in which Origin has a 23% stake.
Origin said it will pay a franked final dividend of 27.5 cents per share on September 27.
The context: Origin CEO Frank Calabria warned the stellar performance in energy markets was unlikely to be repeated in the current financial year, with electricity tariffs predicted to decrease as wholesale market prices begin to weaken.
However, he said this would be offset by an increase in revenue from Octopus Energy.
Origin also reported progress in building out its pipeline of renewable energy developments, including the Yanco wind project and the Ruby Hills, Northern Tablelands and Salisbury solar projects, all located in New South Wales.
The company has also invested in a portfolio of 1.5 GW of tolled battery storage investments.
The sources: ASX announcement, Jarden research
