Oz Origin Energy's Full Year Profit Down 93%

Australian gas and power retailer, Origin Energy, on August 20 reported a 93% yr/yr drop in profit for the 12 months to June 30 (FY2020) owing to charges related to Origin’s equity stake in Australia Pacific LNG (APLNG).

Origin’s profit stood at A$83mn (US$59.5mn) as against A$1.21bn in the year ago period. Last month, Origin said it would recognise non-cash post-tax charges in the range of A$1.16bn-A$1.24bn for FY2020 with the bulk of the losses relating to its equity stake in APLNG.

It said that the non-cash charges relate to updated year-end valuation estimates primarily driven by revised commodity price assumptions, the associated economic impacts of the Covid-19 pandemic, and the progressive transition to a lower carbon energy supply. 

APLNG, a joint venture comprising Origin, ConocoPhillips and Sinopec, is Australia’s largest producer of coalbed methane and supplies gas to Queensland’s domestic gas market, while also processing CBM into LNG for exports.

Underlying profits, which strip out one off items, however, declined only slightly to A$1.02bn from A$1.03bn a year earlier, Origin said.

Meanwhile, the company said it expected A$1.15bn-A$1.30bn in core underlying earnings from its energy markets business in FY2021, compared with A$1.46bn in FY2020.

“Due to lagged contract pricing, reduced oil prices in the final quarter are expected to affect APLNG revenue in FY2021,” it said.