Origin’s positive energy
ORIGIN Energy has lifted its profit forecast for its core retail division to a record high as it generates more electricity and sells more gas to capitalise on high prices.
The energy heavyweight expects its electricity and gas retail unit to deliver a record $1.78 billion to $1.85 billion underlying profit — a measure that excludes one-off items — this financial year.
That forecast is about 3.7 per cent higher than the $1.7 billion to $1.8 billion Origin told investors to expect in August last year.
The rosier outlook for Origin’s biggest business unit put a rocket under the company’s share price, which notched up its biggest one-day rally yesterday — up almost 7 per cent — in more than a year.
It also took the sting out of heavy writedowns on the group’s Ironbark gas field in Queensland — a hit that kept the company’s overall bottom line mired in the red.
Origin yesterday posted a net loss of $207 million for the six months to December.
The result is an improvement from the deep $1.56 billion loss it delivered for the same period a year ago when the electricity and gas producer and retailer slashed the book value of its Australia Pacific liquefied natural gas export plant.
Underlying profit surged 150 per cent to $428 million.
The result was driven by an improvement in its electricity and gas businesses and a ramp up in production at the $24.7 billion gas export terminal in Queensland.
Underlying earnings from Origin’s integrated gas unit, which houses its gas export plant, surged 120 per cent to $630 million. In the core electricity and gas retail arm, underlying earnings rose 21 per cent to $891 million.