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Highlights
- Origin boosts 2025 energy markets earnings guidance
- Octopus Energy expects earnings loss on UK weather impacts
- Focus continues on renewables, storage, and customer growth
Origin Energy Ltd (ASX:ORG) has revised its financial guidance for FY2025, indicating a tighter and more optimistic outlook for its energy markets segment. The company now expects underlying earnings in the range of $1.3 billion to $1.4 billion, a notable improvement from its previous projection which started as low as $1.1 billion.
This upgraded guidance is largely attributed to operational improvements, increased electricity volumes, and strong performance across its generation assets. A supportive market environment and reduced green certification costs have further strengthened Origin’s position. These developments come at a time when investor attention remains high on companies within the S&P/ASX200, especially those aligning with clean energy transitions and sustainable growth.
While the Australian operations show positive momentum, Origin’s international venture through its stake in UK-based Octopus Energy paints a more cautious picture. The company has revised its FY2025 expectations for Octopus, now forecasting a potential earnings (EBITDA) loss of up to A$100 million. This shift from a previously expected gain reflects the impact of unusually warm UK weather in March and April, which drove down electricity and gas usage, alongside legacy adjustments tied to the UK government's energy price guarantee subsidy from 2022.
Despite these headwinds, Octopus Energy continues to expand. Over the 12 months to April 30, its UK retail customer base rose more than 10% to 7.5 million, while non-UK retail accounts surged to 2.5 million. Moreover, its proprietary Kraken platform reached approximately 74 million contracted accounts, now including a significant entry into the US market via National Grid.
Financially, Origin reported a statutory profit of $1.017 billion for the first half of FY2025, up from $995 million year-on-year. Underlying profit increased to $924 million, driven by improved integrated gas earnings and lower taxes, although energy markets and Octopus Energy earnings softened. EBITDA dipped slightly to $1.926 billion from $1.995 billion.
Looking forward, Origin maintains its commitment to renewable energy, battery storage, and customer-centric growth strategies. With plans to develop up to 5 gigawatts of renewable projects and an investment commitment of approximately $1.5 billion in battery infrastructure, Origin aims to reinforce its position among promising ASX dividend stocks amid the broader energy transition.
Shares of Origin (ORG) were trading 4.71% lower at $10.53 by midday on Monday, reflecting mixed investor sentiment as the company navigates a transformative period in the energy sector.
