Chief executive Frank Calabria says profits from supplying energy to customers will fall as margins shrink and coal becomes more expensive.
Already a subscriber?Origin Energy’s profits have jumped almost one-third in the past year, a result which has underwhelmed the market as investors focus on the energy giant’s weaker outlook.
“If you look through the last several years, you would understand that the result has really got an element of recovery in it,” Origin chief executive Frank Calabria said. “We’re a business that’s going to be investing in this transition, we need to be strong.” The absence of any increase in the dividend from the first half, at 27.5¢ per share, sent a message of a flatter dividend outlook “and not the growth the bulls expect”, he said.
Bell Direct market analyst Grady Wulff said the sell-off in Origin’s shares was overdone and looked to be partly caused by investors switching to AGL, whose result and outlook beat market expectations on Wednesday.Moody’s senior analyst Nicholas Chapman said Origin’s strong results were a “credit positive”, but said Origin’s credit metrics “whilst remaining strong, are likely to moderate as retail electricity margins retreat”.
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