Origin Energy (ASX:ORG) share price edges higher on third quarter results

The Origin Energy Ltd (ASX: ORG) share price is on the rise after the company shared its gas and energy divisions’ quarterly results.

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Shares in Origin Energy Ltd (ASX: ORG) are climbing this morning following the release of the company’s third-quarter performance results. At the time of writing, the Origin share price is trading 0.73% higher at $4.14.

Origin’s recently updated guidance, released to the market on 16 April, saw its share price close nearly 9% lower than the previous session. 

Let’s take a look at how Origin Energy has performed over the three months ended 31 March.

Third quarter results

The Origin share price is in the green despite a mixed performance from the company’s gas and energy divisions.

Its integrated gas production was 4% less than the previous quarter. The company states this was due to maintenance which resulted in two fewer operating days. Gas sales revenue was also down 6% due to less production and cargo timing issues.

Its commodity revenue was up by 7%, reflecting higher oil and spot LPG prices – though, it was 32% less than the third quarter of 2020.

In Origin’s energy market, sales volumes were down 4% compared to the prior corresponding period, seemingly due to mild weather. Business volumes were also down by the same amount. Origin states that was due to COVID-19 and was offset by new contract wins.

Gas sales decreased 27%, with a 19% decrease in Origin’s business segment from expired contracts and impacts of the pandemic. The amount of gas the company used to generate electricity was also less, caused by lower electricity pool prices.

The company’s figures found weather-related electricity demand was 3% lower than it was prior to the global pandemic. Though, with many of us still working from home, household electricity volumes are slightly above pre-COVID-19 levels.

Commentary from management

Origin CEO Frank Calabria commented on the results published today. He said:

 Due to the lag in the LNG contracts, we expect recent higher oil prices to flow through to contract revenues in the 2022 financial year…

The combination of strong production and operating and cost discipline has helped to reduce the FY2021 distribution breakeven, with full-year cash distributions to Origin expected to be greater than $650 million…

We continue to target significant retail cost savings and are on track to achieve $100 million in savings by the end of FY2021.

Origin Energy share price snapshot

The Origin Energy share price is having a tough 2021 on the ASX. Currently, the company’s shares are trading just 3% higher than their lowest closing price of the last 5 years, which occurred in October 2020.

Origin shares are also down by around 14% year to date and 26% over the last 12 months.

The energy company has a market capitalisation of around $7.24 billion, with approximately 1.7 billion shares outstanding.

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The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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