Download the report: Half year report to shareholders (PDF 1023 KB)
Message from the Chairman and CEO
We are pleased to share with you Origin’s half year report for FY2018, which demonstrates positive momentum in the performance of the business.
Notwithstanding our Statutory Loss of $207 million, driven by impairment charges after tax of $533 million, Origin’s Underlying Profit improved by $255 million to $428 million.
We continued to make significant progress on our twin priorities of reducing debt and improving returns. We improved earnings with Underlying EBITDA1 increasing by 51 per cent to $1.49 billion, driven by earnings growth in Energy Markets and higher production and revenue at Australia Pacific LNG.
A strong uplift in cash flow has helped us to reduce our debt. The successful completion of the sale of Lattice Energy in January will also contribute around $1 billion towards debt reduction.
Origin remains focused on reducing organisational complexity and cost, continuing to repair the balance sheet and adopting a disciplined approach to capital management.
Actions to help with energy security and affordability
We continue to respond to heightened concerns about energy prices and security. We have taken many steps to address high prices which have helped hundreds of thousands of Australians save. This includes no price rises for our hardship customers, low-priced offers for concession holders and a new simple-to-use online price comparator.
We also increased output from Eraring Power Station and supplied more gas including to Pelican Point Power Station, to improve energy security and to put downward pressure on prices. This will remain a focus in the months ahead.
Given the continued focus on debt reduction and prudent capital management, the Board has determined not to pay a dividend for the first half of 2018. We know dividends are important to our shareholders, and remain of the view that it is in the best interests of all shareholders to continue to suspend the dividend at this time.
Provided that market conditions and the regulatory environment do not materially change, FY2018 guidance for Energy Markets is for Underlying EBITDA to be in the range of $1.78 – $1.85 billion. This compares to previous guidance of $1.7 – $1.8 billion.
Origin’s share of production from Australia Pacific LNG for FY2018 is expected to be 245 – 265 PJ. Australia Pacific LNG is also focused on achieving a step change reduction in its break-even cost base within 18 months, as it aims to become a globally competitive, low-cost gas producer.
We thank you for your support and look forward to reporting our progress at the full year.
- From continuiing operations.