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The Origin Energy Ltd (ASX: ORG) share price is on the rise on Thursday morning following the release of its FY2024 first-half results. Australia's largest listed utilities company by market capitalization has seen its shares climb 3% to $8.83 as of the latest update. This positive movement comes amidst a broader rally in the S&P/ASX 200 Index (ASX:XJO), which has surged 0.9% and surpassed the 7,600-point mark. ASX oil and gas stocks, including Origin Energy Ltd, are closely monitored amid market movements and earnings releases, reflecting investor sentiment towards the energy sector.
Strong Growth Highlights:
Origin's first-half results showcase robust performance across various metrics:
- Total group revenue decreased by 9% from the prior corresponding period to $7,996 million.
- Statutory profit surged 149% to $995 million.
- Underlying profit witnessed significant growth, rising from $44 million to $747 million.
- Underlying EBITDA soared 88% to $1,995 million.
- The company announced a fully franked interim dividend of 27.5 cents per share, up from 16.5 cents.
Key Drivers of Performance:
The energy market division played a pivotal role in boosting underlying profit, with $813 million in EBITDA attributed to a recovery in wholesale prices, reduced electricity generation, and lower procurement costs. Conversely, the integrated gas segment faced challenges due to a decline in realized oil prices, offset by earnings from hedging and LNG trading.
Strategic Moves and Future Plans:
Origin made significant strategic investments during the first half, including increasing its stake in UK technology and energy company Octopus Energy. CEO Frank Calabria emphasized Octopus Energy's impressive growth trajectory and highlighted the company's commitment to renewable energy and storage projects. Origin aims to capitalize on increased value opportunities in battery projects amidst rising electricity price volatility.
Guidance and Outlook:
For FY2024, Origin provided guidance for Energy Markets EBITDA and APLNG production, expecting positive performance. Additionally, the company outlined its expectations for FY2025, anticipating a decline in regulated customer tariffs offset by a lower cost base.
Share Price Performance:
The Origin share price has demonstrated resilience over the past year, recording a notable 23.7% increase. This growth, particularly evident around February last year during takeover bid discussions, reflects investor confidence in the company's strategic direction and financial performance.
As investors digest Origin's strong first-half results and outlook, the company's proactive approach to renewable energy initiatives and strategic investments position it for continued growth in the evolving energy landscape.
