Origin Energy Ltd (ASX: ORG) shares have had a lousy 12 months, having dropped more than 40% over the past year. The bad news keeps coming for shareholders with the Origin share price dipping another 1.74% in early trade today.
This comes on the back of the energy giant's FY2021 half-year results (1H FY21) which were released to the market this morning.
Let's take a look at how Origin has been performing.
What's impacting the Origin share price?
The Origin Energy share price is on the slide this morning after the company reported its statutory profit tanked from $599 million in 1H FY20 to $13 million in 1H FY21. Underlying profit also fell from $528 million in 1H FY20 to $224 million in 1H FY21.
Origin's earnings per share (EPS) also took a dive. Statutory EPS dipped to 0.7 cents in the half compared with 34 cents in the prior half. Meanwhile, underlying EPS fell from 30 cents in 1H FY20 to 12.7 cents in 1H FY21.
Investors are driving down the Origin share price after the company slashed its interim dividend to 12.5 cents, down from 15 cents in the prior corresponding period.
Origin reported free cash flow for the period of $655 million as at 30 December 2020. This compares to the $680 million that was reported for the first half of FY20.
CEO comments
Discussing what lies ahead for the business, Origin CEO Frank Calabria said:
Throughout the first half, Origin continued to navigate the very challenging operating conditions facing the sector, as the pandemic caused a reduction in energy demand and depressed prices across key commodities…
The recent rally in oil and gas markets is expected to have a positive impact on Australia Pacific LNG's earnings in the second half, given the lag in contract LNG prices.
However, as flagged in our recent earnings update, the near-term outlook for Energy Markets is more challenging. A mild summer has compounded already weaker demand and reduced volatility, gas supply costs are expected to increase, and wholesale electricity prices remain depressed, particularly as renewable supply continues to come online.
Outlook
Origin provided updated guidance for FY21 on 4 February 2021. It advised that the company's outlook is dependent on no material changes in market conditions or the regulatory environment. It also cautioned that considerable uncertainty remains due to the potential ongoing impacts of coronavirus.
The company's energy markets earnings before interest, tax, depreciation and amortisation (EBITDA) for the 2021 financial year is expected to be in the range of $1 billion to $1.1 billion.
Based on the current Origin share price of $4.52, the company commands a market capitalisation of around $8.1 billion with 1.8 billion shares outstanding.
