Origin Energy Limited (Origin) has released its Quarterly Report for the period to 30 June 2022, covering the performance of its Integrated Gas and Energy Markets divisions.
- Origin received cash distributions from Australia Pacific LNG of $1,595 million in FY2022, with $433 million received as unfranked dividends. The cash distribution net of oil hedging was $1,430 million.
- Australia Pacific LNG revenue for the June quarter increased 6 per cent on the prior corresponding period, and FY2022 revenue increased 103 per cent, driven by higher spot LNG and realised oil prices.
- Domestic gas sales volumes were 4 per cent higher in the June quarter, compared to the prior quarter.
- Five JKM-linked spot cargoes were delivered in the June quarter (committed by April 2022), and a total of 15 in FY2022. North Asian LNG market prices delivered in the quarter averaged ~US$31/mmbtu.
- June quarter Australia Pacific LNG realised gas price was A$16.43/GJ, comprising an average LNG price of US$14.24/mmbtu (contracted and spot) and an average domestic price of A$6.36/GJ (legacy and short-term).
- FY2022 electricity sales volume up 6 per cent compared to FY2021. A 13 per cent increase in business volumes from net customer wins more than offset a 2 per cent decrease in retail volumes due to lower usage reflecting continued uptake in solar and energy efficiency.
- FY2022 gas sales volume down 1 per cent compared to FY2021. Lower business and retail volumes were partly offset by increased gas to generation primarily due to higher outages of baseload coal generators, lower renewable output, and higher electricity demand in the June quarter.
- Progress has been made on coal contracting for FY2023, with 3 million tonnes now contracted of a target of 5 to 6 million tonnes. The contracted supplies are from both legacy priced contracts and contracts priced at market forward prices at the time of contracting.
- 2.2 million accounts (1.7 million customers) now migrated to Kraken and on track to migrate all electricity and gas customers by the end of calendar year 2022.
- Additional $163 million (£94 million) to be invested in Octopus Energy to maintain a 20 per cent equity interest, following continued strong performance and growth prospects.
- $4.4 billion uplift of in-the-money derivative assets associated with the hedging of high wholesale electricity and gas prices results in the requirement to also recognise a $2.2 billion Energy Markets non-cash impairment (subject to final audit and approval procedures). This impairment does not reflect the performance of the business or impact future value.
Origin CEO Frank Calabria said, “In an extraordinarily challenging quarter for the energy industry globally and in Australia, with elevated commodity prices and significant power supply challenges across the NEM, I’m very pleased with how the business has helped meet the energy needs of customers.
“Origin’s generation fleet played a critical role in providing reliable supply to customers, with output from Eraring Power Station rising by 30 per cent and output from our gas peakers surging by 82 per cent from the previous quarter, to help cover supply shortages in the market.
“We have made good progress in addressing coal supply constraints at Eraring, having received strong support from coal suppliers, rail network providers and the NSW government to increase rail deliveries, notwithstanding a short-term interruption in July as flooding impacted rail services in the Hunter region. Coal contracting for FY2023 has also progressed well and is now halfway complete towards our target for 5 to 6 million tonnes.
“In the retail business, the migration of customers to Kraken continues at pace with more than 2.2 million customer accounts now on the platform, and we are on track to complete the migration of all electricity and gas customers by the end of this calendar year.
“As recently announced, Origin will invest an additional $163 million (£94 million) in Octopus Energy, to maintain our 20 per cent stake in the leading UK technology and energy company. The continued growth of Octopus, and recent challenges in the UK and global energy markets, have underscored the significant advantage provided by the market-leading Kraken platform and low-cost operating model as the energy transition accelerates.
“In the gas business, Australia Pacific LNG has performed very strongly this financial year, with revenue more than doubling on the strength of commodity prices. Origin’s cash distribution from Australia Pacific LNG was $1,595 million for the financial year.
“In addition, Australia Pacific LNG has continued to play an important role in providing secure supply to customers on Australia’s east coast, increasing gas supply to the domestic market by 4 per cent in the June 22 quarter” Mr Calabria said.
|Unit||Jun-22 QTR||Mar-22 QTR||% Change||Jun-21 QTR||% Change||FY2022||FY2021||% Change|
|Integrated Gas – APLNG 100%|
|Average commodity price||A$/GJ||16.43||16.10||2%||7.98||106%||13.93||6.94||101%|
|Natural gas sales||PJ||69.0||42.9||61%||59.1||17%||229.4||231.3||(1%)|