Origin surges back to profit in H2 2022
Australia’s Origin reported a net profit of A$399mn ($276.5mn) during the July-December period (H1FY2023) versus a loss of A$131mn a year ago thanks to higher LNG prices, it said on February 16.
The company’s underlying profit, which strips out extraordinary items, however, dropped 84% year/year to A$44mn as higher fuel costs and wholesale electricity procurement costs were not fully recovered in customer tariffs, Origin said.
|
Advertisement: The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business. |
The outlook for the second half of FY2023 has improved, the company said, as higher wholesale costs begin to flow through to customer tariffs.
Origin last month upgraded its FY2023 energy market guidance owing to an expected increase in natural gas and electricity gross profit. The company now expects energy market earnings before interest, taxes, depreciation, and amortisation (EBIDTA) to be between A$600mn 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.
Meanwhile, the company said that it is still in talks with its suiter, Brookfield consortium, regarding their takeover proposal. Origin said that the consortium has “substantially completed due diligence and active engagement continues on a non-exclusive basis”. The talks are taking place against a backdrop of major regulatory changes. The Australian government has announced a price cap on gas prices in order to reduce burden on households.
Canadian investor Brookfield in partnership with MidOcean Energy, an LNG company formed and managed by EIG, plans to acquire all the issued shares in Origin at a price of A$9/share. As per the offer, Brookfield would acquire Origin’s energy markets business and MidOcean would acquire the integrated gas business including a 27.5% interest in Queensland-based APLNG.
Last month, Origin granted the consortium more time to close the A$18.4bn deal to buy the company.