(Bloomberg) -- Origin Energy Ltd.’s full-year earnings fell 41 percent, missing expectations, as the power producer said it won’t pay a final dividend as it seeks to further reduce debt amid the energy price slump.
Underlying profit was A$354 million ($271 million) in the year ending June 30, the Sydney-based company said in a statement Thursday. That compares with the A$372 million average of 12 estimates compiled by Bloomberg. The net loss narrowed 10 percent to A$589 million.
"The impact of actions taken to reduce debt are really the key drivers of our financial performance this year," Managing Director Grant King said on an earnings call. Lower oil prices mean the company is better served shifting cash flow away from paying "to get that debt down as quickly as we can," King said.
Origin is among oil and gas producers that are struggling as a decline in prices and weaker demand growth have reduced revenue while new projects from Asia to North America expand a glut. Origin said in July that annual output rose 57 percent after exports started from the Australian Pacific LNG project with partner ConocoPhillips in Queensland.
Origin said it cut net debt by A$4 billion over the year after selling assets and issuing equity. The company is on track to cut adjusted net debt to below A$9 billion this year, according to slides for Thursday’s earnings presentation.
Shares fell as much as 3.8 percent in Sydney before trading 12 cents lower at A$5.72 at 11:25 a.m. local time. That trimmed its its gain for the year to 22 percent
Brent crude, the global benchmark, averaged almost $45 a barrel during the year to June, down from more than $75 the previous period. The price crash has had a knock on affect on oil-linked LNG prices, which have fallen more than two-thirds since 2014.
A rival Queensland LNG producer, Santos Ltd., is tipped to post a loss when it reports half-year earnings on Friday as it grapples with buying expensive supplies of domestic gas to feed its Gladstone LNG plant due to shortages from its own fields.
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Copyright 2016 Bloomberg News.
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