Slide 1: ASX transmittal: results for year ended 30 June 2009
For personal use only To Company Announcements Office Facsimile 1300 300 021 Company ASX Limited Date 19 August 2009 From Bill Hundy Pages 73 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
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, and does not purport to b
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 For personal use only 4
Slide 6: Statutory profit driven by ConocoPhillips' investment in CSG assets
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 cash and undrawn facilities of $5.3 billion
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 As at 30 June 2009 For personal use only 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: Ongoing target of 10% to 15% underlying earnings growth
Origin’s ongoing target has been average underlying earnings growth of 10% to 15% • Compound annual growth rates to date of: For personal use only – 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: Total 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 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 $797 million down 9% Free cash flow per s
Slide 13: Profit & Loss - Statutory
Profit & Loss - Statutory ($ million) Jun 09 Jun 08 Change Revenue 8,042 8,275 -3% For personal use only EBITDAF(1) 1,219 1,324 -8% EBIT 7,961 1,091 630% Net financing costs(2) (172) (220) -22% Changes in fair value of financial instruments (119) (14) Tax expense (672) (235) 186% Minority Interests
Slide 14: Profit & Loss – Reconciliation of Statutory and Underlying
Profit & Loss – Reconciliation of Statutory and Underlying ($ million) Jun 09 Jun 08 Change Statutory NPAT 6,941 517 1243% For personal use only 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 15: Origin is equity accounting its investment in APLNG
Origin is equity accounting its investment in APLNG • The equity accounting treatment to be used in the Income Statement in relation to APLNG will include: For personal use only – The EBITDAF contribution of 50% interest in APLNG recorded at the EBITDAF line on consolidation within the Exploration &
Slide 16: Profit & Loss - APLNG
Profit & Loss - APLNG Summary of APLNG’s performance from 29 October 2008 to 30 June 2009 ($ million) Jun 09 Total Origin’s 50% For personal use only Operating Revenue 145 Operating Expenses (88) EBITDAF 57 29 Depreciation & Amortisation Expense (29) Operating Profit Before Tax 28 Income Tax Expense
Slide 17: Asset impairments following carrying value review
A review of the carrying value of assets in the first half led to a number of asset impairments… Asset Impairments ($ million) Pre-tax Post-tax For personal use only Cooper Basin 71 50 BassGas 66 46 Perth Basin 16 11 Heytesbury Gas Storage 19 13 Existing Retail Systems 78 55 SLIVER Solar Technology
Slide 18: Changes in fair value of financial instruments
Changes in fair value of financial instruments Reconciliation of Balance Sheet and Income Statement items associated with financial instruments movements For personal use only ($ million) Jun 09 Change in net assets (625) Recognised in the Balance Sheet (440) Recognised in the Equity Hedge Reserve (
Slide 19: EBITDAF declined 8% to $1,219 million by segment
Origin’s EBITDAF declined 8% to $1,219 million, primarily due to reduced contribution from Contact, down $125 million on the prior year Segments ($ million) Jun 09 Jun 08 Change For personal use only Exploration & Production 264 266 (2) Generation 107 65 42 Retail 479 499 (20) Contact Energy 369 494
Slide 20: Depreciation & Amortisation
Depreciation & Amortisation ($ million) Jun 09 Jun 08 For personal use only Exploration & Production 158 145 Generation 18 17 Retail 58 53 Contact Energy 135 130 Total 369 345 • Exploration & Production: – Increase from inclusion of Otway Gas Project and Taranaki Basin assets for the full year – Par
Slide 21: 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 22: Tax Reconciliation
Tax Reconciliation ($ million) Jun 09 Jun 08 Profit before tax 7,670 857 For personal use only Prima facie tax 2,301 265 less non-assessable gain on APLNG transaction (1,508) - less recognition of tax benefits not previously brought to account (25) - less recognition of change in net loss position (
Slide 23: Capital Expenditure
Capital Expenditure ($ million) Jun 09 Jun 08 Stay-in-business 209 178 For personal use only 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 24: Operating Cash Flow
Operating Cash Flow ($ million) Jun 09 Jun 08 EBITDAF 1,219 1,324 For personal use only 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 25: Segment Cash Flow & Cash Flow Returns
Segment Cash Flow & Cash Flow Returns Operating Cash Productive OCFR (%) For personal use only flow ($m) Capital(1) ($m) Jun 09 Jun 08 Exploration & Production 249 1,424 17.5 21.8 Generation 77 668 11.6 22.2 Retail 307 2,433 12.6 14.0 Contact Energy 284 3,435 8.3 11.0 Cash flow returns have decrease
Slide 26: APLNG transaction has transformed Origin's Balance Sheet
APLNG transaction has transformed Origin’s Balance Sheet ($ billion) Jun 09 Jun 08 • Investment in Equity Accounted Cash 3.9 0.1 Investees includes Origin’s 50% interest For personal use only Other Current Assets 2.1 2.4 in the net assets of APLNG, which primarily comprises receivables from Total Cu
Slide 27: Net cash and funding capacity as at 30 June 2009
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 As at 30 June 2009 Issue/Buyback Adjusted Adjusted Acquisition(2) Interest Paid Non-Cash FX For
Slide 28: 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 29: Fully franked final dividend up 92%
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 • Ex-dividend date 25 August 2009 For personal use only 50 • Date of record 31 August 2009 • Payable 23 September 2009 • Dividend payout ratio of 83
Slide 30: 3. Operational Review
3. Operational Review For personal use only 29
Slide 31: Exploration & Production
Exploration & Production For personal use only
Slide 32: Exploration & Production: record production and increased CSG reserves
Exploration & Production: Record production with a substantial increase in APLNG’s CSG reserves… 700 770 • EBITDAF of $264m was similar to the prior year with only Jun-09 full year contribution from production assets in the Jun-08 Otway and Taranaki Basins offsetting the dilution of 600 660 use($m)
Slide 33: Gas production increased on Otway and Taranaki contributions
Gas production increased on full year contributions from the Otway Gas Project and Taranaki Basin… For personal use only • Underlying CSG production continued to grow Dilution of Origin’s interest strongly. Despite the 50% dilution in Origin’s in APLNG CSG interests from November due to the APLNG tr
Slide 34: Liquids production grew with new projects and Cooper oil program
Liquids production grew significantly during the year with contributions from new projects and the Cooper oil program… For personal use only • First full year contribution from both the Offshore Otway Otway Gas Project and Taranaki Basin • The Cooper Oil Program resulted in increased annual Cooper B
Slide 35: Average realised liquids price 10% lower
Average realised liquids price for the year was 10% lower due to the significant decline in international benchmark prices… NW Shelf Condensate For personal use only 150 • Average price received for TAPIS FY08 A$91/bbl liquids sales over the year SPREAD including the impact of 120 Origin Realised Pr
Slide 36: 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… 3C For personal use only 2C 3P 2P Source: Origin APLNG’s Reserves (PJ) 30 Jun 2008 30 Jun 2009(1) Change Increase 2P Reserves 4,793 7,265 + 2,472 + 52% 3P Reser
Slide 37: 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 38: 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 39: Otway Gas Project first full year contribution
Otway Gas Project provided its first full year contribution… Otway Gas Project • 30.75% equity interest • Operating reliably at or around peak capacity during For personal use only high demand periods • Annual production(1) of 18 PJ of gas and 190,000 barrels of liquids • Origin’s integrated busines
Slide 40: Kupe Gas Project nearing completion
In New Zealand, the Kupe Gas Project is nearing completion… Kupe Gas Project • Construction of the offshore facilities, wells and For personal use only associated infrastructure is complete • Onshore production station near Hawera is nearing completion • Expecting to open the wells and bring raw gas
Slide 41: Significant offshore exploration programme committed
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 42: Acquisition of 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 4,000 For personal use only 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 43: 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 agreement with Epic Energy to underpin construction of new capacity on the South West Queensland For
Slide 44: Generation
For personal use only Generation
Slide 45: Generation: peaking capacity more than doubled
Generation: Peaking power station capacity has more than doubled in 2009… 210 1050 • EBITDAF was $107 million, up 65% on last year, primarily Jun-09 due to the initial contribution of Uranquinty Power use only Jun-08 Station and expansion of the Quarantine Power Station 180 900 • Operating capacity
Slide 46: Generation plant has generally performed well
Origin’s generation plant has generally performed well… Capacity Generation Plant Type Availability Factor For personal use only Ladbroke Grove Merchant 91% 27% Quarantine Merchant 86% 7% Quarantine Expansion Merchant 83% 8% Roma Merchant 69% 35% Mt Stuart Merchant 87% 1% Uranquinty Merchant 93% 5%
Slide 47: Growing Generation portfolio to meet Retail requirements
Origin continues to grow its Generation portfolio to meet its Retail requirements For personal use only 46
Slide 48: Darling Downs and Mortlake Power Stations
The completion of Darling Downs and Mortlake Power Stations will add 1,180 MW to Origin’s generation portfolio For personal use only View from Darling Downs Steam Turbine Building showing Gas Turbine building Mortlake PS gas turbine at final assembly in Germany Darling Downs Power Station Mortlake P
Slide 49: RET to drive 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… Forecast Additional NEM Generation by • Significant new wind capacity expected to For personal use only Fuel Type to
Slide 50: Portfolio of renewable energy options
Origin has positioned itself to respond to carbon policies through a portfolio of renewable energy options… • Origin initially invested in wind through third parties by underwriting wind farm For personal use only developments by others through long term power purchase agreements • Origin’s 30 MW wi
Slide 51: Geothermal and solar long term solutions
… with flexibility in achieving long term cost effective solutions Geothermal • Origin believes that hot rock geothermal power For personal use only developed at scale could provide a superior long term solution to meeting RET targets • Origin considers the Innamincka Joint Venture to have the most
Slide 52: Retail
For personal use only Retail
Slide 53: Retail: higher revenues offset by higher electricity costs
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 7000 560 ($m) only Jun-09 • Revenue was up 7% due to tariff increases in all Jun-08 markets but margin was down due to
Slide 54: Tariff increases and volumes lifted gas gross margin
Tariff increases and increased sales volumes led to increased gross margin across the gas segment Performance Metrics and % change Natural Gas Electricity LPG For personal use only from Jun 08 Product Revenue ($m) 966 +18% 3,958 +5% 640 +4% Gross Profit ($m) 170 +29% 602 -7% 152 +26% EBITDAF ($m) 43
Slide 55: Margin forgone from QCA's initial 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 56: Retail systems transformation with Wipro
Origin is undertaking a transformation of its Retail systems and has partnered with Wipro to move to an integrated SAP billing and customer management platform… • Origin has partnered with Wipro in a program to transform Origin’s Retail systems For personal use only • Seeking to improve Origin custo
Slide 57: Total retail gross profit increased by 5%
Total retail gross profit increased by 5%, following strong results from gas, LPG and new businesses… Electricity Gross • The QCA had originally determined that the benchmark tariff increase For personal use only Profit Impact of Original QCA decision for FY09 should be 5.38% • Origin believed that
Slide 58: Churn increased; 454,000 new accounts acquired
Churn increased in Origin’s principal markets and 454,000 new gas and electricity accounts were acquired to maintain customer numbers % Churn: 12 Month Rolling Average Year End Customer Numbers For personal use only State Fuel June 08 Change June 09 (000’s) Natural Gas Electricity Total Vic Electric
Slide 59: Origin is the clear leader in green energy sales
Origin is the clear leader in green energy sales… Market Share of GreenPower® Customers(1) For personal use only • 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 60: LPG EBITDAF up 34%
In LPG, declining wholesale costs coupled with growth in customer numbers and sales volumes has provided a 34% increase in EBITDAF for the year Average Australian Dollar Propane Price For personal use only 1,200 FYFY07/08 07/08 FYFY08/09 08/09 • EBITDAF rose by 34% to $45m, A$840 A$840 A$718 A$718 d
Slide 61: Contact Energy
For personal use only Contact Energy
Slide 62: Contact Energy: earnings reduced by weather events and transmission constraints
Contact Energy: While earnings were significantly reduced due to a combination of extreme weather events and transmission constraints… 2800 630 • EBITDAF was $369 million, down 25% on last year, Jun-09 ($m) only primarily due to extreme hydro events in Jun-08 conjunction with transmission constraint
Slide 63: South Island drought and transmission constraints
South Island drought conditions and transmission constraints in the first half limited Contact’s ability to generate electricity during periods of high wholesale prices and resulted in Contact paying more for its energy purchases… South Island prices remain For personal use only high as drought Whol
Slide 64: Contact projects committed for development
Contact has a number of projects committed for development with substantial additional opportunities, particularly in geothermal development Projects to restore flexibility back into the portfolio are on track for commercial operation in mid-2010 • Stratford peakers (200 MW, NZ$250m): Adds flexible
Slide 65: 4. Outlook
64 For personal use only 4. Outlook
Slide 66: 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 67: 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 contributions in the years ahead For personal use only • Development of the 550 MW Mortlake Power Station which is due for completion in late 2010 • Continued development of
Slide 68: $5.3 billion in cash and undrawn committed facilities
The past year has been challenging for financial markets and many companies have been severely constrained in accessing capital to fund their businesses… As at 30 June 2009 For personal use only Undrawn Available Adjusted Adjusted Committed Cash Funding Net Cash(1) Gross Debt Debt Capacity Facilitie
Slide 69: 2009 Full Year Results Announcement
Financial Year Ending 30 June 2009 19 August 2009 For personal use only 2009 Full Year Results Announcement
Slide 70: Further Information
Further Information Investors For personal use only Angus Guthrie Manager, Investor Relations Email: angus.guthrie@originenergy.com.au Office: +61 2 8345 5558 Mobile: + 61 4 1786 4255 Website www.originenergy.com.au 69
Slide 71: Appendix
70 For personal use only Appendix
Slide 72: Gain on Dilution of Origin's Interest in APLNG
Gain on Dilution of Origin’s Interest in APLNG at 29 October 2008 Completion ($ billion) Post Pre Jun 09 Cash received from APLNG 6.9 For personal use only 50% equity accounted investment in APLNG 5.0 Discounted payable to APLNG (3.3) 1.7 Consolidation of APLNG (formerly known as OECSG) 1.0 Tax paya
Slide 73: Net Impact of APLNG Transaction
Net Impact of APLNG Transaction ($ million) Jun 09 Gain on dilution of Origin’s interest in APLNG 6,678 For personal use only Unwinding of discounted liability payable to APLNG (98) Share of unwinding of discounted receivables within APLNG 144 Net Impact of APLNG Transaction 6,724 Unwinding of disco