The following is a summary of the Origin Energy Limited (OGFGF) Q2 2024 Earnings Call Transcript:
Financial Performance:
Origin Energy's underlying profit stood at $747 million, a noticeable increase from the previous year, and EBITDA was at $1.995 billion.
They've declared an interim fully franked dividend of $0.275 per share, up from the previous period.
Adjusted net debt to underlying EBITDA is at a healthier 0.9 times EBITDA.
Origin's profitability, despite being impacted by higher working capital and increased tax payments, was driven by higher earnings from all businesses.
Capital expenditure was comparatively high due to investments centered on growth, such as batteries and renewable projects, and debt-to-EBITDA ratio remains low.
The share from Octopus's underlying EBITDA improved, narrowing the loss, and APLNG earnings were down due to lower global gas and oil prices.
Energy Markets' half-year earnings saw a substantial increase due to improved wholesale electricity costs, offset by slower collections and living cost pressures.
The company is planning on investing more in growth projects.
Business Progress:
The retail business has seen growth with the addition of more than 300,000 accounts.
Signed a new gas supply contract with Beach Energy and partnered with Octopus Energy to improve their medium-term earnings outlook.
set a target of approx. 4GW in both renewables and battery storage by 2030 and has already constructed the first stage of its Eraring battery storage project.
There's growth in the broadband customer accounts and its community energy services business sectors.
The company intends to increase investment in their technology platform and is involved in active discussions with the government regarding extending the operations of the Eraring plant.
They have plans for the review of the distribution policy, thus indicating future changes in business operations.
The company anticipates reduced bad debt provision in 2025/26 but predicts more costs associated with integrating and stabilizing the newly formed business.
Satisfaction and churn rates have improved as the company migrates to a new AI-enabled cloud-based system. They are still expecting to realize more benefits and add to their growth in customer base.
They anticipate a reduction in gas gross margin in the second half due to lower C&I pricing when recontracting and JKM expected to be lower.
Lastly, a potential fall in revenues post-Eraring is predicted, but the company aims to offset it with their 4 gigawatts project.
More details: ORIGIN ENERGY LTD IR
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