Company Reports

Origin Energy offers exposure to relatively defensive Australian energy retailing and highly volatile liquefied natural gas exports. As a producer of commodities, Origin is a price-taker and has few competitive advantages. Capital and efficient scale are potential barriers to competition, but they're not strong enough to justify an economic moat.

Origin Energy's fiscal 2026 adjusted net profit after tax fell 22% to AUD 1.16 billion, mainly on lower gas earnings and higher depreciation. Guidance midpoints imply flat utility earnings in fiscal 2027 and 3% lower APLNG production on 5% cost growth. DPS was flat at AUD 0.60, fully franked.

Origin Energy offers exposure to relatively defensive Australian energy retailing and highly volatile liquefied natural gas exports. As a producer of commodities, Origin is a price-taker and has few competitive advantages. Capital and efficient scale are potential barriers to competition, but they're not strong enough to justify an economic moat.

Origin said fiscal 2026 liquefied natural gas production and utility EBITDA came in above the midpoint of guidance ranges. New guidance for fiscal 2027 LNG production implies a 3% downside at the midpoint due to natural field decline.

Origin Energy's March quarter was soft. APLNG revenue fell 12% on the prior quarter because of lower production, lower LNG prices, and reduced domestic gas sales. Electricity sales volumes increased 4% on data center demand, while earnings guidance for UK-based Octopus Energy was downgraded.

Origin Energy offers exposure to relatively defensive Australian energy retailing and highly volatile liquefied natural gas exports. As a producer of commodities, Origin is a price-taker and has few competitive advantages. Capital and efficient scale are potential barriers to competition, but they're not strong enough to justify an economic moat.

Origin Energy's first-half fiscal 2026 adjusted net profit after tax fell 36% to AUD 593 million, and underlying EBITDA fell 17% to AUD 1.9 billion. The Australian utility business delivered modest growth, and management raised full-year guidance, while LNG and Octopus Energy went backward.

Origin Energy offers exposure to relatively defensive Australian energy retailing and highly volatile liquefied natural gas exports. As a producer of commodities, Origin is a price-taker and has few competitive advantages. Capital and efficient scale are potential barriers to competition, but they're not strong enough to justify an economic moat.

Origin Energy offers exposure to relatively defensive Australian energy retailing and highly volatile liquefied natural gas exports. As a producer of commodities, Origin is a price-taker and has few competitive advantages. Capital and efficient scale are potential barriers to competition, but they're not strong enough to justify an economic moat.

Energy prices are weakening amid a supply glut. Since the beginning of the year, oil prices are down 22%, LNG netback prices are down 18%, and New South Wales 2026 electricity futures prices are down 16%.

Origin Energy offers exposure to relatively defensive Australian energy retailing and highly volatile liquefied natural gas exports. As a producer of commodities, Origin is a price-taker and has few competitive advantages. Capital and efficient scale are potential barriers to competition, but they're not strong enough to justify an economic moat.

Origin Energy's fiscal 2025 underlying EBITDA slipped 3% to AUD 3.41 billion on lower earnings in the Australian utility, mostly offset by temporary LNG trading gains and cost-outs. Underlying net profit after tax increased 26% to AUD 1.49 billion due to a lower tax bill. Shares rose about 4%.

Origin Energy offers exposure to relatively defensive Australian energy retailing and highly volatile liquefied natural gas exports. As a producer of commodities, Origin is a price-taker and has few competitive advantages. Capital and efficient scale are potential barriers to competition, but they're not strong enough to justify an economic moat.

Origin Energy said fiscal 2025 EBITDA in its core Australian utility business, known as energy markets, will be toward the top of the prior guidance range. It also hosed down expectations for UK-based Octopus Energy and flagged a downward revision to APLNG pricing.

The Reserve Bank of Australia modelling suggests US tariffs have the potential to wipe 1% from the level of Australian gross domestic product over the next few years, but the actual damage will depend on monetary and fiscal stimulus both domestically and in major trading partners.

Origin Energy offers exposure to relatively defensive Australian energy retailing and highly volatile liquefied natural gas exports. As a producer of commodities, Origin is a price-taker and has few competitive advantages. Capital and efficient scale are potential barriers to competition, but they're not strong enough to justify an economic moat.

Origin Energy's underlying EBITDA fell 3% to AUD 1.93 billion in first half fiscal 2025, with stronger LNG earnings offsetting weaker performances from the Australian utility business and UK-based Octopus Energy. Underlying net profit after tax increased 24% to AUD 924 million because of lower tax.

No-moat Origin Energy screens as slightly overvalued. Operating conditions are favorable, with elevated prices for electricity and liquefied natural gas suggesting Origin should be tracking well in fiscal 2025. We upgrade our 2025 adjusted EBITDA forecast by a few percent, but longer-term forecasts are largely unchanged. We maintain our AUD 9 per share fair value estimate.

No-moat-rated Origin Energy’s recovery continued in fiscal 2024. Adjusted EBITDA increased 14% to AUD 3.53 billion, and underlying net profit after tax increased 58% to AUD 1.18 billion. EBITDA was close to our expectations, but NPAT was 6% below because of higher taxes and a weak performance from UK-based Octopus Energy. Overall, it was a good result, but fiscal 2025 guidance for the core utility business, known as Energy Markets, underwhelmed. We downgraded our Energy Markets EBITDA forecast by 15% to AUD 1.3 billion, which is near the middle of the guidance range. Our longer-term forecasts are largely unchanged, and we maintain our AUD 9 per share fair value estimate. Origin’s share price dropped 10% after releasing results and now appears fairly valued. It trades on a forecast fiscal 2025 P/E ratio of 12 and offers a yield of nearly 6% fully franked.

Origin Energy offers exposure to relatively defensive Australian energy retailing and highly volatile liquefied natural gas exports. As a producer of commodities, Origin is a price-taker and has few competitive advantages. Capital and efficient scale are potential barriers to competition, but they're not strong enough to justify an economic moat.