Delivery of APLNG project a priority as Origin profit falls
ORIGIN Energy will focus on improving performance, delivering first LNG, managing its balance sheet and creating growth opportunities after a fall in first-half profit.
Reporting on its first half position on Thursday, the company said profit attributable to members fell by 39 per cent to $322 million in the six months to December 2013, compared with $524 million in the six months to December 2012.
Revenue fell by three per cent to $7.24 billion in the half-year, compared with $7.45 billion in the previous corresponding period.
The group will pay an interim dividend of 25c per share, unfranked.
Origin chairman Gordon Cairns said the half year result reflected the focus the company had on improving the performance of existing businesses.
"We are pleased to see that there have been substantial improvements in operational performance, which is reflected in the strong increase in operating cash flow in the first half," Mr Cairns said.
"The delivery of Australia Pacific LNG's project is one of Origin's key priorities and good progress continues to be made, with the upstream component 58 per cent complete and the downstream component 62 per cent complete.
"During the half, Origin completed a number of funding initiatives to extend its debt maturity profile and improve its liquidity position.
"Origin has $6.5 billion in existing liquidity comprising committed undrawn debt facilities and cash. This strong liquidity position is substantially more than that required to satisfy Origin's remaining funding requirements for its 37.5 per cent shareholding in Australia Pacific LNG."
Looking to the future after its Curtis Island project is complete, the company has flagged potential LNG exports from a high-risk, high-return offshore well being drilled off New Zealand's South Island.
Speaking after the company's first-half results, managing director Grant King said Origin was looking at opportunities to build its LNG exposure once the APLNG plant started delivering cash after 2016.
The Australian reports that although it was early days in the strategy, the big Caravel prospect off the coast of Dunedin was of a magnitude to support LNG exports if the $50 million-plus well being drilled there came off.
"Having got into the (LNG) business through APLNG and having learned a lot in the process and continuing to learn a lot, it's natural for us to continue to look for other opportunities," Mr King said.
However, he stressed nothing was imminent.
You can read Origin Energy's full report to the market here.