Origin Energy Limited · ASX:ORG
Origin Energy — H1 FY2009 Earnings Presentation
41 slides from Origin Energy's earnings presentation, Feb 26, 2009
Slide 1: Transmittal: Results for the half year ended 31 December 2008
For personal use only To Company Announcements Office Facsimile 1300 300 021 Company ASX Limited Date 26 February 2009 From Bill Hundy Pages 41 Subject RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 2008 This Transmittal is confidential. If you have received this document in error, please contact Origi
Slide 2: Interim Results Announcement Media Presentation
For personal use only Interim Results Announcement Media Presentation Half Year Ended 31 December 2008 26 February 2009 1
Slide 3: Important Notice
Important Notice This presentation does not constitute investment advice, or an inducement or recommendation to acquire or dispose of any securities in Origin, in any jurisdiction (including the USA). This presentation is for information purposes only, is in a For personal use only summary form, and
Slide 4: Outline
Outline For personal use only • Performance Highlights • Financial Review • Operational Review • Outlook 3 3
Slide 5: Performance Highlights
For personal use only Performance Highlights 4
Slide 6: ConocoPhillips' investment drives Statutory Profit of $6.7 billion
ConocoPhillips’ investment for a 50% interest in Origin’s CSG assets has driven a Statutory Profit of $6.7 billion for the half year… For personal use only • Rejected BG Group’s takeover offer • Conducted CSG monetisation process • Established Australia Pacific LNG (APLNG) with ConocoPhillips to dev
Slide 7: Underlying Profit up 38% to $277 million
Origin has continued to build its existing energy business during the first half with Underlying Profit up 38% to $277 million… For personal use only Revenue $4,216 million up 10% EBITDAF $686 million up 12% Statutory Profit $6,663 million up 1891% Underlying Profit $277 million up 38% EPS – Statuto
Slide 8: Origin continues to grow its existing business
As the operating and economic environment for businesses becomes more challenging, Origin has been able to continue to For personal use only grow its existing business… • Full half year contribution from Otway Gas Project • Continued development of New Zealand business with full half year contributi
Slide 9: $6.4 billion of cash and undrawn committed debt facilities
Origin is now in an unparalleled position to continue to grow and develop its business with access to $6.4 billion of cash and undrawn committed debt facilities and substantial additional For personal use only balance sheet capacity… Source: Origin Source: Origin Note: Excluding Contact • Conservati
Slide 10: Financial Review
For personal use only Financial Review 9
Slide 11: Profit & Loss - Statutory
Profit & Loss - Statutory ($ million) Dec 08 Dec 07 Change For personal use only Revenue 4,216 3,817 10% EBITDAF(1) 686 614 12% EBIT 7,590 634 1098% Net financing costs(2) (95) (104) (9)% Tax expense (676) (146) 363% Minority Interests (16) (49) (68)% NPAT – Statutory 6,663 335 1891% EPS – Statutory
Slide 12: Profit & Loss - Underlying
Profit & Loss - Underlying For personal use only ($ million) Dec 08 Dec 07 Change Statutory NPAT 6,663 335 1891% Significant items Changes in fair value of financial instruments (102) Impairment of assets (217) Net Impact of APLNG Transaction 6,706 Total significant items 6,386 (134) Underlying NPAT
Slide 13: APLNG transaction has provided substantial funding capacity
APLNG transaction has provided Origin with substantial funding capacity… As at 31 December 2008 For personal use only Undrawn Available Adjusted Committed Funding (1) (2) (1) Gross Debt Cash Debt Facilities Capacity Source: Origin … with cash and undrawn committed debt facilities of $6.4 billion (1)
Slide 14: EBITDAF of $686m up 12%
EBITDAF of $686m is up 12% primarily due to growth in the Retail and Exploration & Production segments For personal use only Segments ($ million) Dec 08 Dec 07 Change Exploration & Production 175 133 32% Generation 21 33 (34)% Retail 300 201 49% Contact 190 248 (24)% Total 686 614 12% Note: Corporat
Slide 15: Capital Expenditure
Capital Expenditure ($ million) Dec 08 Dec 07 For personal use only Stay-in-business 115 70 Growth Exploration & Production 286 305 Retail 59 38 Generation 556 240 Contact 129 56 Total capital expenditure 1,144 708 Acquisitions (net of cash) 131 6 Capex including acquisitions 1,275 714 • Growth cape
Slide 16: On-market share buyback of up to $1.275 billion
Origin announced that on completion of the APLNG transaction it would undertake an on-market buyback of shares of up to $1.275 billion For personal use only Share Buyback Activity Shares purchased to date 12.1 million Average price paid $16.11 per share Total consideration $195 million • The buyback
Slide 17: Fully franked interim dividend of 25 cps declared
A fully franked interim dividend of 25 cps (up 108%) has been declared… Dividends History For personal use only 50 • Ex-dividend date 3 March 2009 • Date of record 10 March 2009 40 25 • Payable 25 March 2009 cents per share • Dividend payout ratio of 79% of 30 Underlying EPS, or 3% of Statutory EPS
Slide 18: Operational Review
For personal use only Operational Review 17
Slide 19: Executive Management Team reorganised
The Executive Management Team of Origin has been reorganised to best reflect the challenges and opportunities for our existing business… For personal use only … and to continue the development of a stable and effective management team and to target new opportunities for growth 18 18
Slide 20: Exploration & Production
For personal use only Exploration & Production 19
Slide 21: Exploration & Production: Record Production, Sales and Revenue
Exploration & Production: Record Production, Sales and Revenue reflect contributions from new assets… For personal use only • EBITDAF of $175m up 32% with increased 400 400 production from Otway Gas Project, Taranaki Dec-08 assets and CSG partially offset by lower 350 Dec-07 350 Total Revenue & EBIT
Slide 22: APLNG continues strong growth in CSG production and reserves
APLNG continues strong growth in CSG production and reserves… For personal use only Source: Origin APLNG’s CSG Interests(1) (PJ) 30 Jun 2008 31 Dec 2008 Change(2) Increase 1P Reserves 1,375 1,527 + 152 + 11% 2P Reserves 4,751 5,482 + 731 + 15% 3P Reserves 10,138 11,110 + 972 + 10% Contingent Resourc
Slide 23: APLNG has a leading CSG reserves position
APLNG has a leading CSG reserves position… For personal use only Eastern Australia 2P CSG Reserves by Company Eastern Australia 3P CSG Reserves by Company Source: RLMS Eastern Australia CSG Reserves 19/2/09, updated for APLNG’s reserves position announced on 26/2/09 … both on a 2P and 3P basis 22 22
Slide 24: Kupe Gas Project and Ahuroa Gas Storage update
With the next phase of APLNG’s CSG development to be funded by ConocoPhillips, and a number of development projects nearing completion… For personal use only Kupe Gas Project • Offshore operations were successfully completed early in the half year • Project is 90% complete with commercial operations
Slide 25: Generation
For personal use only Generation 24
Slide 26: Generation: EBITDAF lower due to Worsley plant outage
Generation: EBITDAF was lower primarily due to the Worsley plant outage… For personal use only 50 600 • EBITDAF was $21 million, $11 million lower Dec-08 than the prior half year 45 Dec-07 540 • The Worsley cogeneration plant in WA had Total Revenue & EBITDAF ($m) 40 480 an extended outage after a p
Slide 27: Gas-fired power stations well placed in a carbon-constrained environment
Origin’s fleet of gas-fired power stations is well placed to benefit in a carbon-constrained environment… For personal use only • Addition of Uranquinty and Quarantine expansion has more than doubled Origin’s generation equity interests to 1,465 MW • Origin has committed to build an additional 1,340
Slide 28: Uranquinty Power Station completed; Quarantine expansion commissioning
Uranquinty Power Station is now completed and fully operational… For personal use only All 4 completed Uranquinty PS turbines New unit at Quarantine PS Uranquinty Power Station Quarantine Power Station Expansion • 640 MW Peaking Plant (4 x 160 MW OCGT) • 120 MW expansion (1 x 120 MW OCGT) • Located
Slide 29: Darling Downs Power Station progressing well
Darling Downs Power Station is progressing well… For personal use only Darling Downs PS Turbine Building steel erection Impression of Mortlake PS once constructed Darling Downs Power Station Mortlake Power Station • 630 MW Base Load plant • 550 MW Peaking plant • Largest CCGT plant in Australia • Ex
Slide 30: Renewable energy options: wind, geothermal, solar
Origin also continues to develop a number of renewable energy options… Wind For personal use only • Construction of the 30 MW wind farm at Cullerin Range is well progressed with commissioning expected in mid-2009 • Origin has development sites for another 58 MW and an option over up to 500 MW of win
Slide 31: Retail
For personal use only Retail 30
Slide 32: Retail: EBITDAF grew by $99 million to $300 million
Retail: EBITDAF grew by $99 million to $300 million. Higher gas and electricity revenues were realised following tariff increases in the prior period leading to a very strong first half… For personal use only 3,500 350 • EBITDAF grew by $99 million or 49% from $201 Dec-08 million to $300 million 3,0
Slide 33: Higher tariffs and lower purchasing costs expanded margin
Tariffs were higher and purchasing costs of electricity were lower than in the prior corresponding period resulting in significant margin expansion… For personal use only Source Electricity Chart: NEMMCO, AFMA & Origin Source Gas Chart: Origin and VENCorp … however the wholesale cost of energy is ex
Slide 34: Origin acquired over 238k new accounts
Origin acquired over 238k new accounts to maintain customer numbers December 2008 Origin Customer Numbers(1) For personal use only Natural (000’s) Electricity Total Gas Jun 2008 880 1,729 2,609 Change -2 +7 +4 Dec 2008 878 1,735 2,613 • Opening customer numbers revised (-45k) following customer data
Slide 35: Contact Energy
For personal use only Contact Energy 34
Slide 36: Contact Energy: earnings reduced by weather and transmission constraints
Contact Energy: While earnings were significantly reduced due to the combined impact of weather conditions and transmission constraints… For personal use only • EBITDAF was $190m, 24% lower than the prior half 3000 300 year primarily due to an unusual combination of Dec-08 weather events and transmi
Slide 37: Outlook
For personal use only Outlook 36
Slide 38: Second half expected to be more challenging
The second half of the financial year is expected to be more challenging than the first half For personal use only • Lower margins in the Retail business due to higher wholesale electricity costs, although margins for the full year are expected to be consistent with the prior year • Future well comm
Slide 39: Major projects expected to contribute after year end
Origin will continue to progress the development of several major projects which are expected to make contributions For personal use only following the end of the current financial year… • Construction of the 30 MW Cullerin Range wind farm in New South Wales which is due for completion in mid 2009 •
Slide 40: Fuel-integrated generator retailer strategy and APLNG opportunity
Origin’s strategy as a fuel-integrated generator retailer will continue to create opportunities for the existing business and APLNG creates a major opportunity for growth and access to For personal use only international markets Source: Origin Source: Origin Note: Excluding Contact With access to $6
Slide 41: Further Information
Further Information For personal use only Media Lina Melero General Manager, Corporate Communication Email: lina.melero@originenergy.com.au Office: +61-2-8345 5217 Mobile: + 61-4-27 017 798 Website www.originenergy.com.au 40 40