Origin Energy to Continue Focus on Debt Reduction

Origin Energy will continue to focus on reducing debt and improving performance amid low energy price environment, company’s newly appointed managing director and CEO Frank Calabria said September 9.

The Australian firm has confirmed the appointment of Calabria, who will be replacing Grant King. Calabria’s appointment will take effect immediately following Origin's annual general meeting on October 19, 2016 and King will step down from his role at that time and retire from the company at the end of October. Calabria is CEO of Origin's Energy Markets Business.

"It is a great honour to lead Origin. This is an important Australian company with a strong future. The issues are clear: cut debt and improve performance. This twin focus will improve returns for shareholders and position us to drive medium term growth in a rapidly changing energy market, while delivering on the potential for the major investment that has been made in APLNG," Calabria said.

In September last year, Origin stated that in order to lower debt, strengthen the balance sheet and reduce reliance on distributions from APLNG, it plans to reduce the company’s dividend for FY2016 and FY2017, make further reductions in capital expenditure and sell non-core assets. Origin has already sold some of its assets as parts of its debt reduction exercise. In May, it sold Mortlake gas pipeline in Victoria and its 50% interest in OTP Geothermal.

Origin is planning to reduce its debt below A$9bn (US$6.8bn) by the end of FY2017, the company said last month while announcing its results for the year that ended on June 30, 2016. It reported A$589mn loss for the full year.

Shardul Sharma