Origin Energy (ASX:ORG) has tipped itself for stronger growth in the year ahead after falling just short of underlying profit expectations.The company had predicted a 15% increase in underlying profit for the 2010 financial year but yesterday reported a 1
Origin Energy (ASX:ORG) has tipped itself for stronger growth in the year ahead after falling just short of underlying profit expectations.
The company had predicted a 15% increase in underlying profit for the 2010 financial year but yesterday reported a 10% increase to $A585 million, after expensing $A27 million of costs from an expanded gas exploration programme.
Also clouding the results, which managing director Grant King described as “steady,” was a 91% drop in statutory profit to $A612 million.
Last year's unusual $A6.941 billion statutory profit was caused by a selldown of Origin’s Australia Pacific LNG assets.
Origin reported this year that pre-tax earnings from generation are up 70% and retail up 20%.
Exploration and production pre-tax earnings are down 5% and earnings from Contact Energy, in which Origin holds a 51% stake, dropped 6% after a wet year across the Tasman.
Mr King singled out the Kupe gas field as a strong performer, with Origin’s share of gas totalling 4.8 petajoules since production began in January.
After an upgrade in reserves, Kupe is expected to yield about 273 petajoules of natural gas, 1.1m tonnes of LPG and 18.6m barrels of light crude – with Origin holding a 50% share.
Mr King told media yesterday that Origin expects an underlying profit increase of 15% in the coming year.
The company will continue with an elevated offshore and international drilling programme in 2011 – including two exploration wells in New Zealand’s Northland Basin in the next quarter.
