Origin full of energy with its forecast
ORIGIN Energy has forecast earnings growth in the current financial year driven by its electricity and gas retail business.
The energy producer and retailer made a loss of $2.23 billion in the year to June 30, due to a $3.1 billion impairment charge that included writedowns against its Australia Pacific LNG project and conventional oil and gas assets.
Its underlying earnings, which exclude significant items, met guidance by rising 49 per cent to $2.53 billion.
Origin Energy yesterday issued a better-than-expected growth forecast for its energy markets division, which includes its retail operations, with earnings to rise by between 14 and 21 per cent in 2017/18, underpinned by higher electricity prices and increased generation from its Eraring power station.
RBC Capital Markets oil and gas analyst Ben Wilson said the energy markets outlook was the highlight of a very solid financial result.
Origin Energy’s integrated gas business will also enjoy growth, with APLNG production expected to rise by 7 to 16 per cent, with a focus on cost reductions.
Origin has forecast net debt to fall below $7 billion by the end of 2017/18, mainly through planned divestment of the Lattice Energy suite of conventional assets.
Origin Energy shares gained 37 cents, or 5.4 per cent, to $7.22.