Origin’s core profit surges 83.5pc, forecasts better results

afr.com:

Origin Energy expects earnings in its energy markets business to improve this year before a softening in electricity profits as tariffs finally turn south.

The updated guidance came as the giant electricity and gas supplier posted a better-than-expected profit for the year ended June 30, with core net profit surging 83.5 per cent. Net income swung back into the black and topped $1 billion after a loss the previous year due to write-downs.

The rebound in profit was attacked by labour unions, with the Australian Council of Trade Unions accusing Origin of failing to promptly pass on savings to consumers from a drop in the costs of purchasing energy.

But Origin chief executive Frank Calabria defended the profit, noting the company’s big loss in the 12 months to the end of June last year and its investments in projects to underpin the transition to lower carbon energy.

“We’ve returned to a profit that is still a very modest return on capital, we’re not even achieving our cost of capital,” Mr Calabria said.

“It’s important for a company that is delivering the transition that they continue to invest in it, which we are,” he added, pointing to Origin’s investments in a large battery at the Eraring generator site in NSW, in hydrogen, renewables and other areas.

Shares in Origin rose as much as 2.2 per cent in early trading after the company, the subject of an $18.7 billion takeover proposal led by Canada’s Brookfield, declared a final dividend of 20¢ a share, up from 16.5¢ a year earlier. The shares were up 1.6 per cent at $8.49 just after midday.

Origin chairman Scott Perkins said the jump in the payout to shareholders reflected “the strength of the recovery in Origin’s performance and our confidence in the future”.

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