Origin Energy (ASX:ORG) on Thursday updated the outlook for its Energy Markets division, increasing the companys full-year underlying EBITDA guidance for fiscal 2026 and prompting a notable share-price reaction, despite a drop in statutory profit for the first half.
The Sydney-listed energy company raised its FY26 Energy Markets underlying EBITDA guidance to A$1.55 billion-A$1.75 billion, up from the previous range of A$1.40 billion-A$1.70 billion. Management attributed the revision to stronger performance in the electricity business and ongoing cost savings.
Investors responded to the guidance upgrade, pushing Origins shares up by as much as 8.1% to A$11.97 intraday. The stock later trimmed those gains and was trading 4.5% higher at A$10.91 as of 01:59 GMT.
For the six months ended Dec. 31, Origin reported a statutory profit of A$557 million, down from A$1.02 billion in the same period a year earlier. The decline reflected softer earnings in the Integrated Gas business and a reduced contribution from Octopus Energy.
Within the group, Energy Markets underlying EBITDA increased to A$860 million, supported by higher electricity gross profit and disciplined cost control. Adjusted free cash flow also rose, reaching A$705 million for the half.
Origin declared a fully franked interim dividend of 30 Australian cents per share, which is unchanged from the prior year.
Summary
Origin Energy upgraded its FY26 Energy Markets underlying EBITDA guidance to A$1.55 billion-A$1.75 billion from A$1.40 billion-A$1.70 billion, citing improved electricity results and cost savings. The stock jumped intra-day before settling with gains. First-half statutory profit fell to A$557 million from A$1.02 billion a year earlier, driven by weaker Integrated Gas earnings and a smaller Octopus Energy contribution. Energy Markets underlying EBITDA rose to A$860 million and adjusted free cash flow improved to A$705 million. The interim dividend was held at 30 Australian cents per share, fully franked.
Key points
- Guidance upgrade - FY26 Energy Markets underlying EBITDA raised to A$1.55bn-A$1.75bn from A$1.40bn-A$1.70bn, supported by better electricity performance and cost savings.
- Market reaction - Shares rose as much as 8.1% to A$11.97 before easing to trade 4.5% higher at A$10.91 (01:59 GMT).
- Division and cash flow metrics - Energy Markets underlying EBITDA reached A$860m and adjusted free cash flow was A$705m for the six months to Dec. 31.
Risks and uncertainties
- Softer Integrated Gas earnings - The groups statutory profit declined, in part due to weaker performance in Integrated Gas, which could continue to weigh on overall results.
- Lower contribution from Octopus Energy - A reduced contribution from Octopus Energy contributed to the year-on-year drop in first-half statutory profit.
- Market volatility - While Energy Markets delivered higher underlying EBITDA, share-price gains were trimmed after an initial spike, illustrating potential short-term volatility in market reactions.
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