Insights

Origin Energy (ASX:ORG) share price falls on tanking profit

The Origin Energy (ASX:ORG) share price is on the slide today following the company’s release of its half-year results. Here’s the lowdown.
The post Origin Energy (ASX:ORG) share price falls on tanking profit appeared first on The Motley Fool Australia. –

falling asx share price represented by child making thumbs down gesture with grimacing face

Origin Energy Ltd (ASX: ORG) shares have had a lousy 12 months, having dropped more than 40% over the past year. The bad news keeps coming for shareholders with the Origin share price dipping another 1.74% in early trade today.

This comes on the back of the energy giant’s FY2021 half-year results (1H FY21) which were released to the market this morning. 

Let’s take a look at how Origin has been performing.

What’s impacting the Origin share price?

The Origin Energy share price is on the slide this morning after the company reported its statutory profit tanked from $599 million in 1H FY20 to $13 million in 1H FY21. Underlying profit also fell from $528 million in 1H FY20 to $224 million in 1H FY21.

Origin’s earnings per share (EPS) also took a dive. Statutory EPS dipped to 0.7 cents in the half compared with 34 cents in the prior half. Meanwhile, underlying EPS fell from 30 cents in 1H FY20 to 12.7 cents in 1H FY21.

Investors are driving down the Origin share price after the company slashed its interim dividend to 12.5 cents, down from 15 cents in the prior corresponding period. 

Origin reported free cash flow for the period of $655 million as at 30 December 2020. This compares to the $680 million that was reported for the first half of FY20.

CEO comments

Discussing what lies ahead for the business, Origin CEO Frank Calabria said:

Throughout the first half, Origin continued to navigate the very challenging operating conditions facing the sector, as the pandemic caused a reduction in energy demand and depressed prices across key commodities…

The recent rally in oil and gas markets is expected to have a positive impact on Australia Pacific LNG’s earnings in the second half, given the lag in contract LNG prices.

However, as flagged in our recent earnings update, the near-term outlook for Energy Markets is more challenging. A mild summer has compounded already weaker demand and reduced volatility, gas supply costs are expected to increase, and wholesale electricity prices remain depressed, particularly as renewable supply continues to come online.

Outlook

Origin provided updated guidance for FY21 on 4 February 2021. It advised that the company’s outlook is dependent on no material changes in market conditions or the regulatory environment. It also cautioned that considerable uncertainty remains due to the potential ongoing impacts of coronavirus.

The company’s energy markets earnings before interest, tax, depreciation and amortisation (EBITDA) for the 2021 financial year is expected to be in the range of $1 billion to $1.1 billion.

Based on the current Origin share price of $4.52, the company commands a market capitalisation of around $8.1 billion with 1.8 billion shares outstanding.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Gretchen Kennedy owns shares of Origin Energy Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Origin Energy (ASX:ORG) share price falls on tanking profit appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!