In looking ahead Mr King said, "A key focus of the Company over the next few years is delivering the Australia Pacific LNG project on schedule and budget. To fund Origin's share of that investment, we have been significantly reducing our committed capital expenditure on other projects, will be focusing on maximising cash flow from the existing business and managing the maturity of our existing debt facilities.
"We are today announcing the launch of a $625 million four and five year syndicated bank loan to refinance debt maturing in the 2013 financial year. The syndication is expected to close at the end of September 2012.
"The outlook for the coming year is more challenging than in prior years with less growth coming from new capital investments, regulatory uncertainty particularly related to pricing decisions made by the Queensland Competition Authority for which the Company has initiated a judicial review, as well as more uncertainty in forecasting earnings driven by volatile global commodity prices and changing patterns in the demand for energy in Australia.
"In the Energy Markets segment, we will respond to the uncertainties by focusing on reducing costs, winning and retaining customers, realising benefits of the new SAP billing and customer relationship management system and continuing to capture benefits from Origin's integrated portfolio. In this segment, we are targeting an Underlying EBIT margin6 of around 11 per cent.
"We expect a higher contribution from our Exploration and Production business with BassGas expected to recommence production in the September Quarter 2012. We are scheduling a shutdown for Otway to allow for the tie-in of the Geographe project.
"We are also expecting a higher contribution from Contact Energy as it continues to benefit from greater flexibility in its generation portfolio and its gas purchasing position," Mr King said.
Depreciation and amortisation costs will increase in line with the increased asset base, following the completion of Mortlake Power Station, upgrades to Eraring Power Station, implementation of the new SAP billing and customer relationship management system, a return to production at BassGas and increased production.
Underlying net financing costs6 are expected to increase substantially in the 2013 financial year compared with the prior year due to interest on completed projects and the Ironbark development no longer being capitalised. Interest associated with Origin's cash contributions via shareholder loan repayments to Australia Pacific LNG will continue to be excluded from Underlying Profit.
Origin's Underlying effective tax6 rate is expected to remain at around 30 per cent for the coming year.
"Taking all of these factors into account, and based on prevailing market conditions, Origin anticipates Underlying EBITDA for the 2013 financial year to increase by around 10 per cent and Underlying Profit to be in line with the 2012 financial year," Mr King said.
"While Origin intends to reduce its shareholding in Australia Pacific LNG to below 37.5 per cent, this guidance does not include any impact of a change in Origin's shareholding."