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Origin Energy misses profit forecasts

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LNG Industry,

Reuters is reporting that Origin Energy fell far short of analysts' forecasts on 16 February, reporting a 28% drop in half-year underlying profit as weak oil prices hit revenue at its APLNG project.

The company announced that earnings were growing from its power and gas retail businesses however, thanks to higher volumes and better profit margins.

Gas prices have been rising sharply in Australia, as gas has been drained from the domestic market to feed new LNG export plants, including APLNG. At the same time, electricity prices have increased on the back of rising use of wind and solar energy.

Origin said it was on track to go ahead with an initial public offering of its exploration and production assets, excluding gas aimed for exports, in 2017.

Underlying profit after tax dropped to AUS$184 million for the six months to December from AUS$254 million a year earlier.

Weakened revenue from APLNG meant the project was unable to cover increases in interest, tax, depreciation and amortisation.

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