Origin Energy Reports 11% Drop in LNG Revenue, 13% Rise in Gas Sales

Integrated Gas Segment Faces Production and Revenue Challenges

Origin Energy’s March 2025 quarterly report highlights a nuanced performance across its core segments. The Australia Pacific LNG (APLNG) joint venture saw revenue decline by 11% to $2,427 million, primarily due to a 3% drop in production volumes and softer LNG prices. Production was impacted by two fewer operational days in the quarter, lower field performance in key operated and non-operated assets, and unplanned disruptions from Tropical Cyclone Alfred. Despite these setbacks, production remains aligned with full-year 2025 guidance.

The realised average LNG price fell to US$11.31 per mmbtu, down from US$12.20 in the prior quarter, reflecting broader market softness. Origin received a fully franked dividend of $185 million in March, bringing full-year distributions to $797 million. Notably, the company now expects no further cash distributions from APLNG in FY25, with all FY26 dividends anticipated to be fully franked, revising earlier guidance.

Energy Markets Segment Shows Steady Growth

In contrast, Origin’s Energy Markets segment demonstrated resilience and growth. Electricity sales volumes increased by 1% compared to the same quarter last year, while natural gas sales surged 13%, driven by higher business volumes and trading activity. This growth was partially offset by reduced gas demand for generation, influenced by the Pelican Point contract expiration and milder weather reducing electricity consumption.

Origin also reported that approximately 75% of the anticipated Eraring coal volume for FY26 is now contracted or hedged at prices consistent with FY25, providing some revenue stability. The Yanco Delta Wind Farm project in southern New South Wales marked a significant milestone by securing around 1.5 GW of transmission access rights from EnergyCo. This achievement triggers an expected additional acquisition cost of $175 million in Q4 FY25, underscoring Origin’s commitment to expanding its renewable energy portfolio.

Octopus Energy Accelerates Customer Growth

Octopus Energy, Origin’s retail arm, continues its rapid expansion. The business added over 674,000 net customer accounts during the quarter across the UK and international markets, solidifying its position as the largest energy retailer in the UK with 7.5 million customers and over 2.3 million internationally. The Kraken platform, which powers Octopus’s retail operations, migrated an additional 4 million customer accounts this quarter, bringing live accounts to 44 million and contracted accounts to 67 million. Kraken is on track to surpass its 100 million contracted accounts target ahead of the 2027 timeline.

Capital Expenditure Reflects Strategic Investments

Capital expenditure for the quarter was $296 million, down 23% from the prior quarter, primarily reflecting timing differences in well delivery and development spend. However, year-to-date capex increased significantly, driven by growth investments in large-scale battery projects at Eraring and Mortlake, which are progressing well. The Eraring battery project recently reached a key testing milestone with the Australian Energy Market Operator (AEMO).

Origin’s CEO Frank Calabria emphasized the company’s strategic focus on renewables and storage, alongside maintaining reliable supply through its generation fleet. Despite operational challenges in the gas segment, the company’s diversified portfolio and international retail growth position it well for the energy transition ahead.