Origin Energy Limited · ASX:ORG
Origin Energy — H1 FY2010 Earnings Presentation
40 slides from Origin Energy's earnings presentation, Feb 25, 2010
Slide 1: 2010 Half Year Results: A Decade of Growth
Half Year Ended 31 December 2009 25 February 2010 Celebrating a decade of growth 2010 Half Year Results A Decade of Growth Media
Slide 2: 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 3: Outline
Outline 1. Performance Highlights 2. Financial Review 3. Operational Review 4. Outlook 5. The Next Decade 3
Slide 4: 1. Performance Highlights
1. Performance Highlights @) origin
Slide 5: Ten years since ASX listing, a decade of growth
On 21st February ten years ago, Origin was first listed on the ASX and so began a decade of growth 10 Year CAGR: • Productive Capital: 16% • Underlying Profit: 24% • Earnings per Share: 18% • Dividends per Share: 27% • Total Shareholder Return: 30% That growth has resulted in Origin’s market capital
Slide 6: One of the top performing listed companies over the last decade
As a result of this growth, Origin has been one of the top performing listed companies over the last decade… Origin TSR 1,306% Indexed to 100 from 21 February 2000 to 19 February 2010 … and is now in the ASX top 20 companies by market capitalisation, from a low of around 125th around the time of dem
Slide 7: Underlying Profit up 28% to $355 million
Origin enters its second decade with Underlying Profit up 28% to $355 million, continuing that record of growth Underlying Profit $355 million up 28% Underlying Earnings 40.5 cps up 28% per Share Statutory Profit(1) $371 million down 94% Statutory 42.3 cps down 94% Earnings per Share(1) Interim divi
Slide 8: Clear and simple strategy delivering growth opportunities
Origin’s performance has been driven by a clear and simple strategy that continues to deliver ongoing opportunities for growth • Progressed commissioning of the Kupe Project with steady production achieved • APLNG increased production capacity and 2P reserves • Committed to acquisition of increased
Slide 9: 2. Financial Review
2. Financial Review @) origin
Slide 10: 2010 Half Year Financial Highlights
2010 Half Year Financial Highlights Revenue $4,300 million up 2% Underlying EBITDA $706 million up 3% Underlying EBIT $489 million up 1% Underlying net financing income/(costs) $12 million up $72 million Underlying Profit $355 million up 28% EPS – Underlying 40.5 cps up 28% Statutory Profit $371 mil
Slide 11: Deployed $1.4 billion of balance sheet capacity
Origin has deployed $1.4 billion of balance sheet capacity over the period to grow and develop the business… Growth Capex • 23% lower than the prior half year • Major expenditure included the Darling Downs and Mortlake Power Stations, Kupe Gas Project, Bass Basin exploration and power generation dev
Slide 12: Significant financial capacity and refinancing of maturing facilities
Origin has significant financial capacity to support its business… • Strong expressions of interest have been received from a number of lending banks in regards to refinancing the majority of the 2010 and 2011 maturing debt • Origin expects to refinance this debt prior to the end of the current fina
Slide 13: Fully franked interim dividend of 25 cps
A fully franked interim dividend of 25 cps, in line with the prior year, has been declared… • Ex-dividend date 2 March 2010 • Date of record 9 March 2010 • Payment Date 1 April 2010 • Dividend payout ratio of 62% of Underlying EPS • Dividend Reinvestment Plan will apply to this interim dividend with
Slide 14: 3. Operational Review
3. Operational Review @) origin
Slide 15: Exploration & Production
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Slide 16: Exploration & Production: production in line, progress on Kupe and Talinga
Delivered production in line with expectations and continued progress on new developments including Kupe and Talinga… Exploration & Production Segment • Underlying EBITDA down 40% to $104 million, reflecting dilution of Origin’s interest in APLNG, higher exploration expenses, lower production volume
Slide 17: APLNG continues to grow its reserves position
APLNG continues to grow its reserves position and remains the largest holder of CSG reserves in Australia • Current production capacity now exceeds 240 TJ/day (up to 87 PJ/year) • Optimised LNG train design now at 4.5 MTPA with each train expected to require 270 PJ/year of gas • Reserves maturation
Slide 18: APLNG and QGC agreements evidence value of collaboration
APLNG and QGC agreements evidence the value of project collaboration… Field Development Framework • APLNG and QGC have agreed to work together to develop these jointly owned resources • Covers permits ATP 648P (APLNG interest 31.25%) and ATP 620P (APLNG interest 40.625%) • Provides mechanisms to pro
Slide 19: Working with Anadarko in the Canterbury Basin
Origin is working with Anadarko to explore in the highly prospective Canterbury Basin in New Zealand… • Origin has attracted Anadarko Petroleum Corporation to farm in for a 50% interest in exploration permit PEP 38262 • Prior to agreement to farm in, Anadarko completed specialist processing of a 3D
Slide 20: Generation
Generation re) origin
Slide 21: New projects driving significant earnings growth in Generation
Delivering new projects has led to significant earnings growth… Generation Segment • Underlying EBITDA increased from $22 million to $98 million, as operating capacity more than doubled compared to Dec 08 half • Operating capacity increased to 1,620 MW. Expected to increase to 2,800 MW by late 2010
Slide 22: Retail
Retail
Slide 23: Strong increase in Retail Underlying EBITDA
Strong increase in Underlying EBITDA driven by increased margins in gas and LPG, partially offset by increased wholesale electricity and network costs Retail Segment • Underlying EBITDA increased 7% to $320 million primarily due to improved gross profit for natural gas and LPG, partially offset by l
Slide 24: Contact Energy
Contact Energy re) origin |
Slide 25: Contact Underlying EBITDA in line with prior half in local currency
Underlying EBITDA was in line with the prior half in local New Zealand currency… Contact Segment • Underlying EBITDA decreased by 3%. Operational performance in line with prior half in local currency. EBITDA lower on consolidation due to stronger Australian dollar • Non-recurrence of transmission co
Slide 26: 4. Outlook
4. Outlook @) origin
Slide 27: Outlook
Outlook While results for the first half were up 28 per cent compared with the prior half year, Origin still expects, based on current market conditions, that the full year result will be around 15 per cent higher than the prior year. 27
Slide 28: 5. The Next Decade
5. The Next Decade @) origin
Slide 29: Fuel integrated generator retailer strategy and long term trends
Origin will continue to pursue a clear and simple strategy of being a fuel integrated generator retailer Electrification Continued economic growth, efficiency improvements and industrialisation in Asia are likely to increase electricity’s share of final energy consumption Decarbonisation Reduced car
Slide 30: Retail business has grown market share substantially
In Australia, Origin’s retail business has grown its market share substantially over the last decade and this growth has been a key driver of Origin’s growth Pre Demerger Retail Market Share(1) Origin: 4% Retail Market Share 2010(1) Origin: 21% Source: AEMO’s 2009 SOO Medium Economic Growth Scenario
Slide 31: Renewable energy target will drive investment in renewables
Whilst it remains unclear how the world will respond to climate change, in Australia the renewable energy target has been set and will drive significant investment in renewable energy… • Origin’s modelling suggests over 6,000 MW Represents mandated 2020 of new wind capacity to be built by 2020 in re
Slide 32: Substantial pipeline of generation opportunities
Origin has developed a substantial pipeline of generation opportunities to support a growing retail business • Baseload and peaking portfolio with a lower average emissions intensity than the market • Gas fired generation development options, provide Origin with opportunities meet growing demand • H
Slide 33: World energy demand projected to increase 1.4% a year
World demand for energy is projected to increase by 1.4% a year on average, with electricity demand projected to grow more quickly at 2.5% a year… • World demand for gas is projected to grow by around 1.5% a year (BAU) • Asian electricity consumption is projected to grow at 4.7% a year, with China a
Slide 34: World LNG trade projected to triple by 2030
This increasing demand for gas is projected to result in world LNG trade tripling by 2030 as LNG is favoured over pipeline solutions due to supply security concerns Estimated Interregional Gas Flows 2030 (billion cubic metres) Gas will play an increasing role in providing the flexibility to balance
Slide 35: Developing resources near markets with increasing gas demand
In this context, Origin seeks to find and develop resources near markets with increasing demand for gas LNG is opening a significant channel to export markets 35 for gas which Origin will access through APLNG
Slide 36: Responding to demand for renewable energy
Origin is a also responding to the increasing demand for renewable energy both locally and globally… Geothermal • Conventional – Contact is pursuing the development of a number of geothermal opportunities • Shallows – Origin is seeking to develop shallow geothermal resources • Deeps – Origin is purs
Slide 37: Strong joint venture partners
Strong joint venture partners reflect the quality and potential of these new opportunities and complement Origin’s development capability Australia Pacific LNG – CSG to LNG joint venture with ConocoPhillips Transform Solar – Joint venture with Micron to focus on the development of solar photovoltaic
Slide 38: Many opportunities to grow over the next decade
Looking further ahead Origin has many opportunities to continue to grow and develop its business over the next decade • Increased share of growing energy markets in Australia and New Zealand • Continued development by APLNG of its CSG to LNG project which is a primary focus for activity in the comin
Slide 39: 2010 Half Year Results: A Decade of Growth
Half Year Ended 31 December 2009 25 February 2010 Celebrating a decade of growth 2010 Half Year Results A Decade of Growth
Slide 40: Further Information
Further Information Media Lina Melero General Manager, Corporate Communications Email: [email protected] Office: +61 2 8345 5217 Mobile: + 61 427 017 798 Website www.originenergy.com.au 40