Origin Energy Ltd Shares Uplifted On ASX After The Decent Topline Growth In September Quarter

  • Oct 31, 2018 AEDT
  • Team Kalkine
Origin Energy Ltd Shares Uplifted On ASX After The Decent Topline Growth In September Quarter

Origin Energy Ltd (ASX: ORG) shares uplifted by 1.674 percent after the release of the September quarter production report as on 31 October 2018. The company reported that the integrated Gas revenue increased by 12 percent to $640 Mn in Q1FY19 as compared to the prior quarter on the back of higher commodity prices. September quarter revenues are 35% higher than the prior corresponding quarter in September 2017. The Average spot electricity price for September 2018 quarter increased by $0.14/MWh to $83.7/MWh compared to the prices of June 2018 quarter. The Average domestic natural gas price for September 2018 quarter increased by $1.0/GJ quarter to $9.45/GJ as compared to the prices of June 2018 quarter, driven by Asia regional Liquefied natural gas (LNG) pricing.  

The LNG production increased by 8% on Jun-18 quarter which reflects higher customer demand, but it was down by 7% on Sep-17 quarter due to the two train lenders test in the prior year. The LNG revenue increased by 15% in September quarter to $527 million as compared to the Jun-18 quarter and it was 37% higher than on Sep-17 quarter mainly due to higher realized prices. The hedging cost of the company decreased by 11 percent to $527 million as compared to June quarter of FY 2018 which reflects lower hedge premium amortization partly offset by increased oil hedge losses.

The Australia Pacific LNG continues to operate well, with Origin’s share of production steady at 64.3 PJ for the quarter. In the September quarter, a total of 29 LNG cargoes were loaded and shipped. As per ORG’s CEO Mr. Frank Calabria, the Australia Pacific LNG is continuing to produce at steady rates due to which the company is able to meet its LNG contract commitments and deliver large volumes of gas into the east coast domestic market. Further, he added that the higher realized prices have delivered a strong uplift in revenue for the quarter.

Due to the seasonal demand in the September quarter, the Energy Markets electricity and natural gas sales were higher than the prior quarter. The Electricity sales increased by 4 percent to 9.5 TWh compared to prior quarter but it was slightly lower than a Sep-17 quarter. The natural gas sales increased by 6 percent to 82.2 PJ as compared to the prior quarter. Gas sales to retail and business customers increased by 18% and 25% respectively reflecting seasonal demand and new short-term contracts in Queensland, partially offset by less internal sales to generation.

The capital expenditure relating to the continuing operations decreased by 67 percent to $40 million as compared to the prior quarter. The capital expenditure was comprised of mandatory spending on Power of Choice regulatory reforms and investment in the company’s retail digital capabilities.

In the last six months, the share price of the company decreased by 26.46 percent as on 30 October 2018, traded at a PE level of 57.280x. ORG’s shares traded at $7.290 with a market capitalization of circa $12.62 billion as on 31 October 2018.


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