Energy producer and retailer Origin Energy has posted a first half net profit of $794 million compared to a $136 million loss for the previous corresponding period.
The profit is also higher than its 2010/11 full year profit of $186 million, with write-downs on assets and transaction costs from acquisitions affecting the previous two periods.
Origin on Thursday reaffirmed full year guidance for 30 per cent growth in underlying profit.
The company said it expected energy market volumes to be similar in the second half.
It also said higher debt balances would lead to higher financing costs in the second half.
Origin said the increase in statutory profit was partly driven by a selling down of its stake in the Australia Pacific LNG project in Queensland.
Also aiding the result was an increase in the fair value of financial instruments, lower impairment of assets and lower transition and transaction costs.
Underlying profit for the half increased 61 per cent to $489 million when compared with the prior corresponding half year.
The acquired NSW Integral Energy and Country Energy retail businesses helped boost underlying profit, as did lower exploration expenses and higher commodity prices.
Earnings before interest, tax, depreciation and amortisation (EBITDA) in Origin’s energy markets segment increased 52 per cent to $820 million.
EBITDA in its exploration and production division increased 83 per cent to $179 million.
That was driven by a significantly reduced exploration expense, which was $86 million lower than the prior corresponding half year.
The board declared a fully-franked interim dividend of 25 cents per share, which matched the dividend for the pcp.
Origin’s workforce grew during the half with the addition of more than 300 new employees to about 5,600.
The taking of a final investment decision (FID) on the first phase of the Australia Pacific LNG project was another significant milestone for Origin, and would deliver substantial value to shareholders, Origin chairman Kevin McCann said.
“Origin has undertaken a number of funding initiatives during the period and, as a result, is well-placed to fund its share of the first phase of the Australia Pacific LNG project and other committed projects,” he said in a statement.
China’s state-owned Sinopec has signed up to 7.6 million tonnes a year in the $14 billion project, making it the largest LNG supply deal in Australia.
Origin’s interest in the coal seam gas project will fall from about 42 per cent to 37.5 per cent as a result of its joint venture partner US giant ConocoPhillips inking sales deals with Japan’s Kansai Electric and Sinopec.
