Origin announced a 10 percent increase in Underlying Profit to $585 million for the financial year ended June 30, 2010 when compared with the prior year, including expenses associated with an expanded level of domestic offshore and international exploration. Excluding these expenses, Underlying Profit increased by 15 percent to $609 million for the 2010 financial year.
During the financial year to June 30, 2010, Statutory Net Profit After Tax was $612 million, compared with $6.9 billion for the prior year which contained a number of items including a benefit from the gain on the dilution of Origin's interest in Australia Pacific LNG of $6.7 billion.
Origin Chairman, Mr. Kevin McCann said, "Origin is in a strong financial position and continues to deliver solid profit growth with gearing at 20 percent and Operating Cash flow After Tax approaching $1 billion. This provides significant financial flexibility and enables investment in the continued growth of the company.
"The Board has declared a final fully franked dividend of 25 cents per share, taking full year dividends to 50 cents per share representing 75 percent of underlying earnings," he said.
The dividend will be paid on September 28, 2010 to shareholders of record on September 6, 2010.
Underlying Business Performance
Underlying EBITDA for the year to June 30, 2010 increased 10 percent or $127 million to $1.35 billion.
Origin Managing Director, Mr. Grant King said, "During the past two years, Origin has progressively redeployed some of the benefits of the Australia Pacific LNG transaction to fund the development of operating assets. As a result of this, a number of projects and acquisitions have made initial or increased contributions to Origin's financial performance this year," he said.
Exploration & Production Underlying EBITDA was $250 million, five percent or $14 million lower than the prior year. The contribution from the recently commissioned Kupe Gas Project and Origin's increased equity interest in the Otway Gas Project was more than offset by the dilution of Origin's CSG interests in Australia Pacific LNG, production constraints in the Bass and Cooper basins, production decline in the Perth Basin and expenses relating to the expanded offshore and international exploration program undertaken during the year.
Origin undertook an expanded exploration program in the offshore Bass and Otway basins in southern Australia and in South-East Asia, which involved the drilling of six significant wells during the year. Unsuccessful exploration expenses associated with the expanded program are included in these results.
Origin has funded a number of projects and acquisitions during the past two years which will contribute to Origin's financial performance in 2011. These include:
Mr. King said, "Origin expects these major capital projects will provide substantial additional cash flows and contribution to Underlying EBITDA, and will result in a commensurate increase in depreciation and amortization expense.
"Origin continues to invest in projects which will contribute to the growth of the company over the long term. This will include a continuation of the high level of total exploration and appraisal expenditure seen in 2010," he said.
Total expenditure on gas and oil exploration activities is expected to be around $170 million with the majority of expenditure in the first half of the 2011 financial year. Embedded in the guidance is an assumption that some elements of this program may be unsuccessful and will therefore be expensed as part of the underlying performance of the business in the 2011 financial year.
"Taking all these factors into account and based on current market conditions, Origin expects that Underlying EBITDA will increase by approximately 35 per cent in the 2011 financial year when compared with the prior year," he said.
"As a consequence, Underlying Profit for the 2011 financial year is expected to be around 15 percent higher than the prior year," Mr King said.
Over the next year Origin will address a number of opportunities with the potential to create significant additional value for shareholders. These include:
Mr. King said, "Looking forward, Origin is well-placed to benefit from the growing demand for energy both domestically and overseas."
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