16 April 2011

Half Year Report to Shareholders 2011

Half Year Report to Shareholders for the half year ended 31 December 2010.

Half year report to Shareholders (6 pages)


Message from the Chairman and Managing Director

Origin has been through a period of substantial capital investment, expanding our oil and gas production and power generation capacity and it is pleasing to see this reflected in a strong increase in Underlying EBITDA and cash flow.

For the first six months of the 2011 financial year, Origin's Underlying EBITDA was up 16 per cent to $818 million on the prior corresponding period. Importantly, Underlying EBITDA before exploration expenses was $915 million, up 26 per cent and Group operating cash flow after tax of $794 million was up 87 per cent.

Underlying Profit of $304 million was a decrease of 14 per cent on the prior corresponding period, primarily as a result of increased exploration expenses and a higher effective tax rate.

At the time of announcing the $3.26 billion(1) transaction to acquire NSW energy assets in December 2010, Origin advised that it would be funded through new debt facilities, with the expectation that these facilities would be partly refinanced with a pro-rata equity offering. Origin is currently undertaking a pro-rata equity offering(2).

Looking forward, Origin is pursuing two major opportunities which will both have a transformational impact on the business. The NSW acquisitions have made Origin Australia's largest energy retailer, servicing 4.6 million electricity, natural gas and LPG customer accounts, with one of the largest and most flexible generation portfolios. In addition Australia Pacific LNG continues to make significant progress and on 25 February 2011 signed a non-binding Heads of Agreement with Sinopec to become a foundation customer and equity participant in the project.

Dividend

The Board has declared a fully franked interim dividend of 25 cents per share, representing a dividend payout ratio of 73 per cent of Underlying earnings per share, to be paid to shareholders on 1 April 2011.

Outlook

Based on prevailing market conditions and successful completion of Origin's pro-rata equity offering, Origin expects an increase in full year Underlying Profit of around 15 per cent for the 2011 financial year when compared with the prior year.

This half year result demonstrates that Origin is in a strong position to meet growing energy needs both in Australia and overseas and to continue to deliver sustainable growth for shareholders.

Kevin McCann
Chairman
Grant King
Managing Director