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Highlights
- Origin Energy shares fell by 0.5% despite a positive quarterly update showing 3% growth in electricity sales and steady gas volumes.
- The company's Australia Pacific LNG revenue rose 1% due to higher LNG sales, while production slightly declined.
- Origin's investment in renewables is progressing, with large-scale battery projects and wind farm developments underway.
On Thursday, shares of Origin Energy Ltd (ASX:ORG) slipped 0.5% toAU $9.45 in early morning trading. The decline in share price comes despite the company releasing a promising quarterly update, which included growth in electricity sales volumes, steady gas volumes, and progress in renewable energy investments. Investors reacted somewhat negatively to the report, leading to a slight dip in the company’s stock price.
Origin Energy reported a 3% increase in electricity sales volumes for the September 2023 quarter, driven by growth in its retail customer base and rising demand. However, gas volumes remained flat compared to the same period last year. Higher retail sales and gas generation offset a decrease in business volumes, keeping gas numbers steady.
The company's Australia Pacific LNG segment showed modest growth, with revenue increasing by 1% compared to the previous quarter. This revenue boost was largely driven by higher LNG sales volumes, although production levels were down slightly from the previous quarter. The average realised price for LNG during the quarter stood at US$11.95 per million British thermal units (mmbtu), while the domestic price averaged AU$9.59 per gigajoule (GJ).
Origin’s international venture, Octopus Energy, continued to demonstrate strong growth. The business added over 600,000 new customer accounts across its UK and international retail operations in the quarter. In a major deal, Octopus executed an 8 million customer account sale, raising the total number of global customer accounts contracted to its Kraken platform to 62 million. Octopus Energy has been gaining attention for its innovative and disruptive presence in the energy and technology sectors globally.
Origin Energy’s CEO, Frank Calabria, expressed satisfaction with the company's quarterly performance. He highlighted the continued strong operational performance of Australia Pacific LNG, emphasizing its role in supporting the domestic energy market. “Australia Pacific LNG continues to provide material volumes of gas to the domestic market, supporting the needs of manufacturers,” Calabria noted.
In addition to its LNG operations, Calabria pointed out the progress made in the company's renewable energy investments. “There has been a step change in Origin's investment in renewables and storage,” he said. The construction of large-scale battery storage projects at Eraring and Mortlake is underway, and the company is making headway in the development of the Yanco Delta Wind Farm in New South Wales. Origin is also assessing a range of early-stage renewable projects as it pushes forward with its renewable energy strategy.
Despite these positive developments, the market's reaction to the report was cautious, with shares edging lower. Some analysts suggest that the dip could be attributed to the slight decline in LNG production or broader market sentiment around energy stocks.
However, the company remains focused on its long-term strategy of expanding into renewable energy and enhancing its technological capabilities.
