Origin Energy Limited · ASX:ORG
Origin Energy — H1 FY2009 Earnings Presentation
40 slides from Origin Energy's earnings presentation, Feb 26, 2009
Slide 1: Interim Results Announcement Media Presentation
Interim Results Announcement Media Presentation Half Year Ended 31 December 2008 26 February 2009 1
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 • Performance Highlights • Financial Review • Operational Review • Outlook 3 3
Slide 4: Performance Highlights
origin energy - Performance Highlights
Slide 5: ConocoPhillips' investment in CSG assets drove 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… • Rejected BG Group’s takeover offer • Conducted CSG monetisation process • Established Australia Pacific LNG (APLNG) with ConocoPhillips to develop Australia’s large
Slide 6: 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… 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 – Statutory 761.0 cps up 1887%
Slide 7: Origin continued to grow its existing business
As the operating and economic environment for businesses becomes more challenging, Origin has been able to continue to grow its existing business… • Full half year contribution from Otway Gas Project • Continued development of New Zealand business with full half year contribution from Taranaki Basin
Slide 8: Unparalleled position with $6.4 billion of cash and undrawn facilities
Origin is now in an unparalleled position to continue to grow and develop its business with access to $6.4 billion of cash and undrawn committed debt facilities and substantial additional balance sheet capacity… Source: Origin Source: Origin Note: Excluding Contact • Conservative debt maturity profi
Slide 9: Financial Review
u rgin - Financial Review
Slide 10: Profit & Loss - Statutory
Profit & Loss - Statutory ($ million) Dec 08 Dec 07 Change 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 761.0 cps 38.3 cps 18
Slide 11: Profit & Loss - Underlying
Profit & Loss - Underlying ($ 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 277 200 38% Underlyin
Slide 12: APLNG transaction provided substantial funding capacity
APLNG transaction has provided Origin with substantial funding capacity… As at 31 December 2008 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) Net Cash/(Debt) exclu
Slide 13: EBITDAF of $686m up 12%
EBITDAF of $686m is up 12% primarily due to growth in the Retail and Exploration & Production segments Segments ($ 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: Corporate costs of $51m have b
Slide 14: Capital Expenditure
Capital Expenditure ($ million) Dec 08 Dec 07 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 capex has risen with the s
Slide 15: On-market share buyback
Origin announced that on completion of the APLNG transaction it would undertake an on-market buyback of shares of up to $1.275 billion Share Buyback Activity Shares purchased to date 12.1 million Average price paid $16.11 per share Total consideration $195 million • The buyback commenced on 13 Novem
Slide 16: Fully franked interim dividend of 25 cps declared
A fully franked interim dividend of 25 cps (up 108%) has been declared… Dividends History 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 20 • Dividend Reinvest
Slide 17: Operational Review
Operational Review 17
Slide 18: Executive Management Team reorganised
The Executive Management Team of Origin has been reorganised to best reflect the challenges and opportunities for our existing business… … and to continue the development of a stable and effective management team and to target new opportunities for growth 18 18
Slide 19: Exploration & Production
Exploration & Production 19
Slide 20: Exploration & Production: Record Production, Sales and Revenue
Exploration & Production: Record Production, Sales and Revenue reflect contributions from new assets… • EBITDAF of $175m up 32% with increased 400 400 production from Otway Gas Project, Taranaki Dec-08 assets and CSG partially offset by lower 350 Dec-07 350 Total Revenue & EBITDAF ($m) production fr
Slide 21: APLNG continues strong growth in CSG production and reserves
APLNG continues strong growth in CSG production and reserves… 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 Resource (2C) 15,869 14,964 -
Slide 22: APLNG has a leading CSG reserves position
APLNG has a leading CSG reserves position… 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 23: 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… Kupe Gas Project • Offshore operations were successfully completed early in the half year • Project is 90% complete with commercial operations expected to commence
Slide 24: Generation
Generation 24
Slide 25: Generation: EBITDAF lower due to Worsley plant outage
Generation: EBITDAF was lower primarily due to the Worsley plant outage… 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 power turbine failure i
Slide 26: 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… • 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 MW of power generatio
Slide 27: Uranquinty and Quarantine Power Stations
Uranquinty Power Station is now completed and fully operational… 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 near Wagga Wagga, New
Slide 28: Darling Downs and Mortlake Power Stations
Darling Downs Power Station is progressing well… 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 • Expected to be completed
Slide 29: Renewable energy options: wind, geothermal, solar
Origin also continues to develop a number of renewable energy options… Wind • 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 wind farm development sit
Slide 30: Retail
Retail 30
Slide 31: 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… 3,500 350 • EBITDAF grew by $99 million or 49% from $201 Dec-08 million to $300 million 3,000 Dec-07 300 • Cost t
Slide 32: Higher tariffs and lower purchasing costs expanded margins
Tariffs were higher and purchasing costs of electricity were lower than in the prior corresponding period resulting in significant margin expansion… Source Electricity Chart: NEMMCO, AFMA & Origin Source Gas Chart: Origin and VENCorp … however the wholesale cost of energy is expected to be substanti
Slide 33: Origin acquired over 238k new accounts to maintain customer numbers
Origin acquired over 238k new accounts to maintain customer numbers December 2008 Origin Customer Numbers(1) 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 review as part of sys
Slide 34: Contact Energy
u rgin - Contact Energy 34
Slide 35: 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… • EBITDAF was $190m, 24% lower than the prior half 3000 300 year primarily due to an unusual combination of Dec-08 weather events and transmission constraints Dec-
Slide 36: Outlook
u rgin ~ Outlook 36
Slide 37: Second half expected to be more challenging than the first
The second half of the financial year is expected to be more challenging than the first half • 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 commitments replaced by le
Slide 38: Major projects to contribute after the current financial year
Origin will continue to progress the development of several major projects which are expected to make contributions 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 • The Kupe Gas Project
Slide 39: Fuel-integrated generator retailer strategy and APLNG growth 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 international markets Source: Origin Source: Origin Note: Excluding Contact With access to $6.4 billion of cash and
Slide 40: Further Information
Further Information Media Lina Melero General Manager, Corporate Communication Email: [email protected] Office: +61-2-8345 5217 Mobile: + 61-4-27 017 798 Website www.originenergy.com.au 40 40