Origin Energy's profit exceeds expectations on the back of strong LNG earnings

Origin Energy, an Australian power company, beat analysts' expectations on Thursday. This was due to higher LNG sales and gains from LNG trading. These factors offset a sharp drop at the energy markets division.

Origin Energy, along with AGL Energy and Energy Australia as one of Australia's "Big Three" retailers of electricity, will spend A$1.5 billion to A$1.7 billion between fiscal 2025 and the majority of that money will go towards building storage batteries.

Frank Calabria, Chief Executive Officer of Origin said: "Origin delivered a solid first-half performance... A strong balance sheet allowed Origin to increase the returns to shareholders as well as invest in energy transition."

It said that the power producer is making "meaningful" progress towards adding 4-5 gigawatts of renewables to its portfolio and incorporating storage by 2030.

Origin's profit grew to A$924 ($580.18$) million for the six-month period ended December 31. This is around 4% higher than analysts expected. It reported a profit of A$747 millions last year.

The company also declared a 30 cent interim dividend per share.

The integrated gas business's underlying operating profits jumped by 25% to A$1.25billion, fueled by gains from trading LNG as well as high LNG volumes and commodity price at the Australia Pacific LNG project in Queensland.

Its energy markets division, which generates, and retails, electricity, suffered a 30% loss as a result of cost-of-living concerns. The company was forced to absorb the higher electricity costs, rather than pass them on to its customers. The company's operating profits fell to A$738m.

Calabria stated that "cost of living pressures are still felt by many Australian households. As a leading energy retailer in Australia, we support our most vulnerable clients through a variety of initiatives."

AGL Energy, a rival, announced on Wednesday that it would target 1.4 GW grid-scale storage projects over the next 12 months. It also reported a 6.5% decline in its half-year profit, which fell to A$373 millions as he company absorbed higher electric costs.

(source: Reuters)