Half Year Results 2006
A full six month contribution from Contact Energy and increased earnings from the Generation business have contributed to a 14% improvement in Origin Energy’s profit after tax to $193.7 million for the half year to 31 December 2005.
- Revenue up 31% to $3,008 million
- EBITDA up 34% to $589.3 million
- Net profit after tax up 14% to $193.7 million
- Normalised earnings per share increased 11% to 25.5 cents per share
- Basic earnings per share up 4%
- Dividend of 9 cents per share fully franked to be paid on 20 March, up 29% on last year.
Commenting on the result Origin’s Chairman Mr Kevin McCann said, “We are pleased to announce a fully franked dividend of nine cents per share. This is a 29% increase over last year and will be paid on 20 March 2006 to shareholders of record on 1 March 2006.”1
Managing Director Mr Grant King said, “The contribution of Contact Energy which included the proceeds on the sale of the interest in the Valley Power generator increased net profit after tax by $47 million. Generation contribution increased with higher plant availabilities and increased capacity payments from Mt Stuart Power Station.
“Contribution from the Upstream business was down significantly from the prior year however non-recurring items totalling $19.9 million boosted the prior year’s result. The benefit of higher oil prices and further receipts of insurance payments relating to lost production from the Moomba incident were offset by lower production in the half particularly from the Perth Basin.
The Company has also announced that it has adopted “successful efforts” accounting for its exploration activities. This has resulted in reducing capitalised exploration by $124 million. It is estimated that adoption of this policy will reduce reported earnings in the current year by approximately $10 million after tax.
“The retail contribution was also down on the prior period. Higher levels of customer acquisition in the current half has seen a pleasing increase of 39,000 customers over the prior year, the acquisition costs of which are expensed thereby reducing profit in the current half’s results.”
Commenting on the outlook for the full year, Mr King said, “Origin Energy’s earnings are typically higher in the first half and this is expected to be the case again this year, particularly given the one-off contribution from the sale of Valley Power.
“The BassGas Project is in the final stages of commissioning and will progressively contribute to earnings as the plant reaches full production in the fourth quarter of this financial year.
“Oil production in the Perth Basin has returned to target levels and will make an increased contribution to the second half of the year.
“We announced at the Annual General Meeting in October last year that we expected our earnings for the full year to be 10 to 15% higher than the recurring A-IFRS earnings in the prior year. Based on results for the first half and given current market conditions we expect results to be consistent with that announcement.”
Telephone: 02 8345 5435
Manager, Investor Relations
Telephone: 02 8345 5558
Origin Energy Key Financials
|2005 ($m)||2004 ($m)||Change %|
|Sales revenue and other income||3,008||2,291||31|
|Profit before tax||355||267||33|
|Profit after tax||263||194||36|
|Profit after tax and outside equity interests||194||170||14|
|Free cash flow(2)||328||247||33|
|OCAT ratio (calendar year)||13.6%||13.6%(3)||N/A|
|Capital expenditure (including acquisitions)||426||1,192||(64)|
|Earnings per share||25.5¢||24.6¢||4|
|Normalised earnings per share||25.5¢||23.0¢||11|
|Free cash flow(2) per share||43.2¢||36.8¢||17|
|Interim dividend per share||9.0¢||7.0¢||28|
|Net asset backing per share||$4.78||$5.03||(5)|
|Net debt to capitalisation||41%||45%||(9)|
|Net debt to equity||70%||81%||14|
|EBIT Interest cover (times)||4.5||4.9||(7)|
|Return on equity||7.1%||7.0%(4)||(24)|
|Segment Analysis (EBITDA)|
|Exploration & Production||98.7||117.7||(16)|
- Origin Energy acquired a 51.4% interest in Contact Energy and has consolidated 100% of the results of Contact within its accounts. Outside equity interests are recognised in reporting of net profit after tax and total equity.
- Cash flow available for funding growth and distributions to shareholders
- Excludes Contact
- Return on equity calculation treats Convertible Undated Preference Shares (CUPS) used to fund the acquisition of Contact as equity