A combination of warm weather and energy-conscious consumers means people are using less electricity and pulling down earnings for Origin Energy.
The energy provider announced a statutory profit of $530 million for the year to the end of June, a 40% increase. But underlying profit, excluding asset disposals and other items, was down 6% to $713 illion.
Where Origin felt a sting was in earnings from electricity sold to households where there’s increasing price competition, more use of solar power and warmer weather meaning less heating.
Managing Director Grant King says he’s pleased with the improvements in operational performance of existing businesses and the progress made on Australia Pacific LNG.
However, underlying EBITDA (earnings before interest, taxes, depreciation, and amortisation) decreased by 21% to $1.05 billion reflecting reduced volumes and higher operating costs.
“The reduction in volumes stemmed primarily from a decrease in electricity sales to domestic mass market customers reflecting a reduction in average consumption and an historically mild year which reduced overall household energy consumption,” he says
Origin’s customer accounts marginally declined by 0.05% or 3,000 accounts, compared to a net decrease of 16,000 in the prior period.
This net position includes a reduction of 41,000 electricity customer accounts and an increase of 38,000 natural gas accounts, building on Origin’s strong gas position.
Origin expects improved margins in natural gas in the 2015 financial year and improved contributions from electricity in the 2016 financial year.
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