Origin First-Half Profit Slides 27% After Gas Prices Declineby
Net loss widens to A$254 million after non-cash impairment
Company may suspend dividend should low prices persist
Origin Energy Ltd., ConocoPhillips’s partner in a A$24.7 billion ($17.7 billion) natural gas export project in Australia, posted a 27 percent decline in first-half profit after a downturn in energy prices.
Orign’s underlying profit fell to A$254 million in the six months ended Dec. 31 from A$346 million a year earlier, the Sydney-based company said Thursday. That compares with an estimate of A$312 million from Goldman Sachs Group Inc. Origin’s net loss widened to A$254 million from A$25 million a year earlier.
The company Thursday pledged to step up efforts to cut debt and warned it may suspend its dividend this half because of the plunge in energy prices. The company last year unveiled a debt-reduction program, including spending cuts and as much as A$800 million in asset sales, to shore up its balance sheet. Its shares fell 54 percent in Sydney trading in 2015.
“As well as achieving A$5.5 billion in debt reduction during the period, Origin has initiated cash preservation measures to reduce net debt to below A$9 billion,” Chairman Gordon Cairns said in the statement. “Should the current low oil price environment persist through the second half of fiscal year 2016, which puts at risk ongoing debt reduction, the company will suspend dividends until appropriate debt levels are achieved.”
Origin announced a dividend on 10 cents a share for the first half today.
It said in January that the first cargoes from the Australia Pacific LNG development in Queensland state had left for Asia. It’s one of three LNG plants on Australia’s east coast that had started over the previous year.
Origin last week agreed to sell its Mortlake terminal for A$110 million in a deal with AusNet Services. The terminal connects Origin’s gas-fired power station to Victoria state’s electricity market, according to the company.