News Column

Origin Energy profits jump

August 31, 2014

SYDNEY



Origin Energy, Australia's biggest electricity retailer by customers, posted weaker annual earnings after unseasonably mild weather crimped household energy use and intensifying competition eroded margins.Net profit for the year through June rose 40 per cent to $530 million, but was supported up by an accounting gain on the market value of derivatives used for hedging purposes. Underlying profit, which more closely gauges the company's operating performance, fell 6 per cent to $713m, in line with the $711m average of six analysts' forecasts compiled by The Wall Street Journal. Revenue slipped by 2 per cent to $14.518 billion in the year, from $14.747 billion in the prior year.Origin Energy will pay a final dividend of 25c per share, unfranked, on September 26 to shareholders on the register on August 28. Demand for electricity in Australia has fallen in recent years after expensive network upgrades pushed up costs for consumers already reining in spending as the country's long mining boom fades. Greater use of energy-efficient appliances and roof-top solar panels is also curbing demand, while sharper competition for customers, particularly with rival AGL Energy, in NSW, has forced Origin to discount contracts. Origin outbid AGL in 2010 to acquire electricity retailers being sold by the New South Wales government. AGL has since pursued an aggressive organic growth strategy to win back market share.




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Source: Oil & Gas News


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