Origin Energy yesterday announced a 15 per cent increase in its underlying profit to $673 million and a 32 per cent increase in underlying EBITDA to $1,782 million for the year ended 30 June 2011.
The increase in underlying profit was primarily due to the inclusion of results from Origin’s newly acquired NSW energy retail businesses (Integral Energy and Country Energy), higher commodity prices and increased production in Origin’s Exploration and Production businesses and an increase in Origin’s owned and contracted generation capacity from 1,710 MW to 5,310 MW.
Origin’s retail business performed well increasing underlying EBITDA by 38 per cent to $785 million. Origin picked up 1.585 million new customers following its NSW acquisitions but seemed to suffer from significant customer churn, losing 607,000 retail customers over the year. Fortunately, Origin was able to acquire 567,000 new customers resulting in an overall net loss of 37,000 customers. Origin says that its customer churn rate has “remained stable at 18.5% despite market churn increasing from 19.1% to 20.2%”.
Origin notes that churn in the NSW market has increased from an average of 12% in the eight months prior to completion of its NSW acquisitions on 1 March 2011, to 14% in the four months post-acquisitions. The company anticipates that market churn will continue to increase to levels experienced in other competitive markets, such as Victoria and Queensland. However, Origin believes that their “incumbent position” in NSW offers them a major advantage in defending their market position.
Also of interest is Origin’s claim that it has installed 47,000 solar systems since 2009, probably making the company Australia’s largest installer of solar photo-voltaic (PV) systems.
You can read Origin Energy’s full ASX release on their website.