The Origin Energy Ltd (ASX: ORG) share price is marching higher on Thursday, up 1.3%.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy provider closed yesterday trading for $8.36. In late morning trade, shares are swapping hands for $8.47 apiece.
For some context, the ASX 200 is down 0.9% at this same time.
Investors are bidding up the Origin share price following the release of the company's full-year results for the financial year ending 30 June (FY23).
Here are the highlights.
Origin share price gains as losses rebound to profits
- Statutory profit of $1.06 billion, up from a loss of $1.43 billion in FY22
- Underlying profit of $747 million, up 84% from $407 million in the prior year
- Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $3.11 billion, up from $2.11 billion in FY22
- Final dividend of 20 cents per share, fully franked, up from 16.5 cents per share, partially franked in FY22
What else happened during the year?
Origin Energy credited the boost in underlying profit to improved earnings across Energy Markets, Octopus Energy and Integrated Gas.
Management noted that profits were hampered, however, by higher income tax expenses related to unfranked distributions from Australia Pacific LNG.
Higher realised oil prices during the year also helped support the Origin share price and delivered $1.78 billion in cash distributions from Australia Pacific LNG. Net of oil hedging, the ASX 200 energy company received cash distributions of $1.49 billion.
Origin's adjusted free cash flow fell $97 million year on year to $965. The company said this was driven by higher working capital in Energy Markets.
The full FY23 dividend comes out 36.5 cents per share, up from 29 cents per share in FY22. At the current Origin share price, that equates to a yield of 4.3%.
Origin chairman Scott Perkins said, "The Board's determination of a final dividend of 20 cents per share reflects the strength of the recovery in Origin's performance and our confidence in the future."
If you want to grab that dividend, you'll need to own shares at market close on 4 September. Eligible investors can expect to see that passive income hit their bank accounts on 29 September.
What did management say?
Commenting on the results sending the Origin share price higher today, CEO Frank Calabria said:
Operational performance right across Origin was strong this year with higher earnings contributions from Energy Markets, Integrated Gas, and Octopus Energy in the UK. Australia Pacific LNG delivered record revenue and cash distributions to Origin as it benefited from elevated commodity prices…
In Energy Markets, electricity earnings improved as higher wholesale costs from previous periods were recovered through electricity tariffs and coal supply costs declined following the introduction of the coal price cap. Higher sales revenue and trading benefits also contributed to higher earnings in the natural gas segment.
What's next?
Looking to what might impact the Origin share price in the year ahead, Calabria said:
The outlook for FY2024 is for further growth in Energy Markets Underlying EBITDA, with Australia Pacific LNG production expected to rebound and cash flow remaining strong. Looking further ahead to FY2025, we expect electricity gross profit in Energy Markets to be lower than FY2024.
On the ongoing acquisition front, Perkins said:
The proposed acquisition of Origin by a consortium consisting of Brookfield Asset Management and MidOcean Energy, continues to progress through the necessary regulatory steps…
While the timing of the shareholder vote is uncertain as it relates to the timing of regulatory approvals, Origin and the Consortium are moving expeditiously towards the target to implement the scheme by early in the 2024 calendar year.
Origin share price snapshot
The Origin share price has been a stellar performer over the past 12 months, up almost 40%. And that doesn't include the two dividend payouts.
