Origin Energy upgrades energy market earnings guidance
Australian gas and power utility Origin Energy has upgraded its FY2023 energy market guidance owing to an expected increase in natural gas and electricity gross profit, it said on January 27.
The company now expects energy market earnings before interest, taxes, depreciation, and amortisation (EBIDTA) to be between A$600mn ($426.72mn) and A$730mn, up from A$500mn to A$650mn. Origin said that the increase in natural gas and electricity gross profit is likely due to an expectation of good operating and trading performance, as well as improved coal delivery under legacy contracts.
Origin expects no material impact on FY2023 energy markets earnings as a result of the introduction of the A$12/GJ cap on uncontracted gas, given gas supplies for the year had been almost entirely contracted prior to the cap coming into effect.
The company has revised lower the Australia Pacific LNG (APLNG) production guidance for FY2023 to 660-680 petajoules from 680-710 petajoules owing to wet weather last year. APLNG is a joint venture comprising Origin, ConocoPhillips and China's Sinopec. It is the largest producer of coalbed methane and supplies gas to Queensland’s domestic gas market, while also processing CBM into LNG for exports.
Origin said that the outlook for the LNG trading business has improved following additional hedging at favourable market prices, resulting in a further A$140mn to A$180mn of LNG trading EBITDA.
Previously, LNG trading EBITDA for FY2023 and FY2024 was expected to be slightly positive and is now expected to be A$40mn to A$80mn. FY2025 LNG trading EBITDA was previously expected to be A$350mn to A$550mn and is now expected to be A$450mn to A$650mn across FY2025 and FY2026.