Full Year 2024 Origin Energy Ltd Earnings Call Transcript
Key Points
- Significant uplift in earnings since 2023, driven by higher wholesale electricity prices and increased LNG production.
- Statutory profit, underlying profit, and underlying EBITDA all saw substantial increases, with underlying profit rising from $747 million to $1.183 billion.
- Strong cash flow performance, with operating cash flow up $1.7 billion to $1.1 billion, reflecting higher cash flow from energy markets and LNG trading.
- Increased shareholder distributions, with a fully franked final dividend of $0.275 per share, totaling $0.55 for the full year.
- Continued investment in energy transition strategy, including storage and renewables, with 1.5 gigawatts of committed battery projects under construction.
- Lower earnings from Octopus Energy and APLNG, partly offsetting gains in other areas.
- Higher bad and doubtful debts, driven by increased bill sizes and cost-of-living pressures, impacting cost to serve.
- Increased labor costs due to higher volume of activity and additional temporary resources post-Kraken system migration.
- Challenges in achieving the original cost-to-serve target for FY25, with expectations of only modest improvements.
- Potential risks from market competition and the reliability of plant operations, which could impact future earnings.
Good morning, everyone, and welcome to the Origin Energy 2024 full year results presentation. This is Frank Calabria, I'm the CEO of Origin and today you'll hear from me and our CFO, Tony Lucas, with the outline of today set out on slide 2. This will be followed by an opportunity for you to ask questions to me, Tony and the executive leadership team here at Origin. Greg Jarvis, Jon Briskin, Andrew Thornton, James Magill, Kate Jordan, Sharon Ridgway, and Samantha Stevens.
So now just turning to the introduction, following which Tony will take you through the financial results. Just firstly, the key message has been a significant uplift in earnings since 2023, a recovery in energy markets driven by a lagged higher wholesale recovery of electricity prices that flowed into customer tariffs from the prior year.
We also had [NP] LNG production up 3% pleasingly, and the share of Octopus Energy earnings were lower than the prior year. The prior year did benefit from the same effect that we
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