Origin Energy hit by falling Australian dollar

Origin Energy reported a statutory loss of $25 million for the half year ended 31 December 2014.

The statutory loss is primarily reflecting the non-cash impact of the recent depreciation of the Australian dollar on the fair value of financial instruments and debt, and interest expense, which would otherwise be capitalised if the Australia Pacific LNG project was held by Origin rather than via an equity accounted investment.

Underlying profit of $346 million for the six months to 31 December 2014 decreased 9 percent from $381 million during the prior corresponding period.

Underlying EBITDA was stable at $1.08 billion, driven mainly by a 22 percent increase in contribution from energy markets to $617 million, offset by a 31 percent decrease in contribution from Exploration & Production to $208 million.

This result was primarily due to Origin maximising use of ramp gas that has become available during the start up of LNG production in Queensland, allowing Origin to use less gas from its own production. The consequential reduction in associated liquids production, which together with lower liquids prices, substantially reduced the contribution from liquids production in this period.

Group operating cash flow after tax decreased 13 percent to $905 million primarily due to a $114 million lower working capital benefit, reflecting the net impact of carbon payments under the Clean Energy Act 2011, which has now been repealed.

Australia Pacific LNG remains on track for completion of Train 1 in mid calendar year 2015, with sustained production from the first quarter of the 2016 financial year.

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Image: Origin