Origin Energy Limited · ASX:ORG
Origin Energy — FY2009 Earnings Presentation
48 slides from Origin Energy's earnings presentation, Aug 19, 2009
Slide 1: Results for the year ended 30 June 2009 transmittal
For personal use only To Company Announcements Office Facsimile 1300 300 021 Company ASX Limited Date 19 August 2009 From Bill Hundy Pages 48 Subject RESULTS FOR THE YEAR ENDED 30 JUNE 2009 This Transmittal is confidential. If you have received this document in error, please contact Origin Energy im
Slide 2: 2009 Full Year Results Announcement
Financial Year Ending 30 June 2009 19 August 2009 For personal use only 2009 Full Year Results Announcement Media
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 summary form, For personal use only and
Slide 4: Outline
Outline For personal use only 1. Performance Highlights 2. Financial Review 3. Operational Review 4. Outlook 3
Slide 5: 1. Performance Highlights
1. Performance Highlights Grant King, Managing Director For personal use only 4
Slide 6: Statutory profit of $6.9 billion driven by ConocoPhillips investment
Origin’s Statutory Profit for the full year of $6.9 billion was driven by ConocoPhillips’ investment for a 50% interest in Origin’s CSG assets… For personal use only Statutory Profit $6,941 million up 1243% Statutory Earnings per Share 791 cps up 1241% Underlying Profit $530 million up 20% Underlyin
Slide 7: Strong position with $5.3 billion cash and undrawn facilities
Origin is now in a strong position to continue to grow and develop its business with access to cash and undrawn committed debt facilities of $5.3 billion and substantial additional balance sheet capacity For personal use only As at 30 June 2009 Undrawn Available Adjusted Adjusted Committed Cash Fund
Slide 8: EBITDAF declined 8% to $1,219 million
Origin’s EBITDAF declined 8% to $1,219 million, primarily due to reduced contribution from Contact, down $125 million on the prior year For personal use only • Safety performance deteriorated as the Total Reportable Incident Frequency Rate increased by 7% to 9.1 In the balance of Origin’s business E
Slide 9: Target of 10% to 15% underlying earnings growth
Origin’s ongoing target has been average underlying earnings growth of 10% to 15% For personal use only • Compound annual growth rates to date of: – EBITDAF: 19% – Underlying Profit: 23% – Underlying Earnings Per Share: 17% Source: Origin 8 This result continues Origin’s consistent track record of g
Slide 10: Capital expenditure up 39% to $2.3 billion
With total capital expenditure up 39% to $2.3 billion(1) for the year… For personal use only • $1,207 million in generation including Darling Downs, Mortlake and Uranquinty Power Stations and Cullerin Range Wind Farm • $597 million in Exploration and Production assets including CSG, Kupe and Darling
Slide 11: 2. Financial Review
2. Financial Review Karen Moses, Executive Director Finance & Strategy For personal use only 10
Slide 12: Financial Highlights
Financial Highlights Revenue $8,042 million down 3% For personal use only EBITDAF $1,219 million down 8% Statutory Profit $6,941 million up 1243% Underlying Profit $530 million up 20% EPS – Statutory 791 cps up 1241% EPS – Underlying 60 cps up 19% Group OCAT $797 million down 9% Free cash flow per s
Slide 13: Profit & Loss – Reconciliation of Statutory and Underlying
Profit & Loss – Reconciliation of Statutory and Underlying ($ million) Jun 09 Jun 08 Change For personal use only Statutory NPAT 6,941 517 1243% Significant items after tax Net Impact of APLNG Transaction 6,724 - Impairment of assets (218) - Changes in fair value of financial instruments (114) (63)
Slide 14: EBITDAF by segment
Origin’s EBITDAF declined 8% to $1,219 million, primarily due to reduced contribution from Contact, down $125 million on the prior year For personal use only Segments ($ million) Jun 09 Jun 08 Change Exploration & Production 264 266 (2) Generation 107 65 42 Retail 479 499 (20) Contact Energy 369 494
Slide 15: Underlying financing costs reduced by $188 million
Underlying Financing Costs for the year reduced by $188 million to $32 million as a result of the reduction in debt and significant cash balance following the APLNG transaction For personal use only ($ million) Jun 09 Jun 08 Interest Revenue 137 9 Interest Expense (169) (229) Underlying Financing Co
Slide 16: Capital Expenditure
Capital Expenditure ($ million) Jun 09 Jun 08 For personal use only Stay-in-business 209 178 Growth Exploration & Production 541 714 Generation 1,029 484 Retail 84 72 Contact Energy 318 128 Total capital expenditure 2,181 1,576 Acquisitions (net of cash) 165 109 Capex including acquisitions 2,345 1,
Slide 17: Operating Cash Flow
Operating Cash Flow ($ million) Jun 09 Jun 08 For personal use only EBITDAF 1,219 1,324 Change in working capital (103) (176) Stay-in-business capex (209) (178) Book value of assets sold - 26 Other 10 22 Tax paid (120) (143) Group OCAT 797 875 Net interest paid (136) (253) Free cash flow 661 622 Pro
Slide 18: Net cash and funding capacity bridge
Origin is now in a strong position to continue to grow and develop its business with access to cash and undrawn committed debt facilities of $5.3 billion and substantial additional balance sheet capacity For personal use only As at 30 June 2009 Issue/Buyback Adjusted Adjusted Acquisition(2) Interest
Slide 19: Debt Maturity Profile
Debt Maturity Profile For personal use only • Origin’s gross cash position is $3.7 billion • Future capital expenditure commitments, including APLNG and maturing debt obligations, are covered for the next 3 years by future cash flow and the current cash position • Beyond the next 3 years, APLNG capi
Slide 20: Final dividend declared, full year dividend 50 cps
A fully franked final dividend of 25 cps, up 92% on the prior year, has been declared taking the full year dividend to 50 cps… Origin Dividends History For personal use only • Ex-dividend date 25 August 2009 50 • Date of record 31 August 2009 • Payable 23 September 2009 • Dividend payout ratio of 83
Slide 21: 3. Operational Review
3. Operational Review Grant King, Managing Director For personal use only 20
Slide 22: Exploration & Production
Exploration & Production For personal use only
Slide 23: Exploration & Production: Record production and CSG reserves increase
Exploration & Production: Record production with a substantial increase in APLNG’s CSG reserves… For personal use only 700 770 • EBITDAF of $264m was similar to the prior year with Jun-09 full year contribution from production assets in the Jun-08 Otway and Taranaki Basins offsetting the dilution of
Slide 24: APLNG continues to grow its CSG reserves
APLNG continues to grow its CSG reserves with significant reserves increases that demonstrate the size and quality of APLNG’s CSG resource… For personal use only 3C 2C 3P 2P APLNG’s Reserves (PJ) 30 Jun 2008 30 Jun 2009(1) Change Increase 2P Reserves 4,793 7,265 + 2,472 + 52% 3P Reserves 10,222 12,6
Slide 25: APLNG is Australia's largest CSG producer
APLNG is Australia’s largest producer of CSG, representing around one third of total CSG production… For personal use only • Production is 35% higher than last year at almost 60 PJ as new CSG production facilities are brought on line • Production expected to exceed 100 PJ per annum by 2011 to meet d
Slide 26: APLNG selects Gladstone site for CSG to LNG project
APLNG is progressing well with the development of its CSG to LNG project and has now selected a site at Gladstone for its downstream operations For personal use only • APLNG has secured the Laird Point site on Curtis Island in the Port of Gladstone for its proposed CSG to LNG plant • 230 hectare sit
Slide 27: Otway Gas Project and BassGas Project
Otway Gas Project provided its first full year contribution… Otway Gas Project • 30.75% equity interest For personal use only • Operating reliably at or around peak capacity during high demand periods • Annual production(1) of 18 PJ of gas and 190,000 barrels of liquids • Origin’s integrated busines
Slide 28: Kupe Gas Project nearing completion
In New Zealand, the Kupe Gas Project is nearing completion… Kupe Gas Project For personal use only • Construction of the offshore facilities, wells and associated infrastructure is complete • Onshore production station near Hawera is nearing completion • Expecting to open the wells and bring raw gas
Slide 29: Offshore exploration programme
In the coming year Origin has committed to a significant offshore exploration programme targeting substantial reserves increases near domestic markets in Australia and New Zealand For personal use only Northland Basin Origin, as Operator of permit PEP 38619, has secured the semi submersible rig “Kan
Slide 30: Origin acquires CSG exploration permit ATP 788P
Origin has acquired ATP 788P, a highly prospective CSG exploration permit on the southerly extension of the Undulla Nose… PJ Gas Available for Domestic Energy Portfolio For personal use only 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Origin Equity Contracted Contracted ATP 788P 3P APLNG Gas (1)
Slide 31: South West Queensland Pipeline expansion
The expansion of the South West Queensland Pipeline will provide Origin with long term gas pipeline capacity to link its Eastern Australian portfolio… • In June 2009 Origin entered into a conditional For personal use only agreement with Epic Energy to underpin construction of new capacity on the Sou
Slide 32: Generation
For personal use only Generation
Slide 33: Generation: Peaking capacity more than doubled
Generation: Peaking power station capacity has more than doubled in 2009… For personal use only 210 1050 • EBITDAF was $107 million, up 65% on last year, primarily Jun-09 due to the initial contribution of Uranquinty Power Jun-08 Station and expansion of the Quarantine Power Station 180 900 • Operat
Slide 34: Generation portfolio growth
Origin continues to grow its Generation portfolio to meet its Retail requirements For personal use only 33
Slide 35: RET driving investment in renewable generation
With the RET forecast to drive investment in intermittent renewable generation, additional competitively priced generation is needed to meet the balance of the market’s requirements… For personal use only Forecast Additional NEM Generation by • Significant new wind capacity expected to Fuel Type to
Slide 36: Retail
For personal use only Retail
Slide 37: Retail: Challenging operating conditions
Retail: In a year of challenging operating conditions, higher revenues and increased gas margins have been offset by higher electricity costs not fully reflected in tariff increases For personal use only 7000 560 Jun-09 • Revenue was up 7% due to tariff increases in all Jun-08 markets but margin was
Slide 38: Margin forgone from QCA tariff determination
It had been expected that margin forgone as a result of the QCA’s initial tariff determination would be recovered through other initiatives… For personal use only Gas & Electricity Customers Jun 09 Jun 08 Change Customer numbers (’000) 2,610 2,609 +1 EBITDAF / Sales 8.8% 9.9% -1.1% Underlying EBIT /
Slide 39: Churn increased; new accounts acquired
Churn increased in Origin’s principal markets and 454,000 new gas and electricity accounts were acquired to maintain customer numbers For personal use only % Churn: 12 Month Rolling Average Year End Customer Numbers State Fuel June 08 Change June 09 (000’s) Natural Gas Electricity Total Vic Electric
Slide 40: Origin is the clear leader in green energy sales
Origin is the clear leader in green energy sales… Market Share of For personal use only GreenPower® Customers(1) • Accredited green power customer base grew by 21% to 514,000 customers(2) (up from 423,000 at 30 June 2008) • Origin’s residential products ranked 1, 2 and 3 by Total Environment Centre
Slide 41: Contact Energy
For personal use only Contact Energy
Slide 42: Contact Energy: Earnings reduced by weather and transmission constraints
Contact Energy: While earnings were significantly reduced due to a combination of extreme weather events and transmission constraints… For personal use only 2800 630 • EBITDAF was $369 million, down 25% on last year, Jun-09 primarily due to extreme hydro events in Jun-08 conjunction with transmissio
Slide 43: 4. Outlook
For personal use only 42 4. Outlook
Slide 44: Projects expected to contribute in the coming year
A number of projects Origin has been developing are expected to make initial or significantly increased contributions to financial performance in the coming financial year For personal use only • Full year contribution from the Uranquinty and expanded Quarantine Power Stations • Full year contributi
Slide 45: Major projects to contribute in years ahead
Origin will continue to progress the development of several major projects in its existing business which are expected to make For personal use only contributions in the years ahead • Development of the 550 MW Mortlake Power Station which is due for completion in late 2010 • Continued development of
Slide 46: Funding capacity of $5.3 billion to grow the business
The past year has been challenging for financial markets and many companies have been severely constrained in accessing capital to fund their businesses… For personal use only As at 30 June 2009 Undrawn Available Adjusted Adjusted Committed Cash Funding Net Cash(1) Gross Debt Debt Capacity Facilitie
Slide 47: 2009 Full Year Results Announcement
Financial Year Ending 30 June 2009 19 August 2009 For personal use only 2009 Full Year Results Announcement
Slide 48: Further Information
Further Information Media For personal use only 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 47