Origin Energy Limited

Origin reported statutory profit of $1.574 billion, underlying profit of $1.159 billion, and underlying EBITDA of $3.22 billion for FY26. Energy Markets EBITDA was $1,701 million, Integrated Gas EBITDA was $1,620 million, and Octopus/Kraken posted combined EBITDA of minus $8 million. Adjusted free cash flow was over $2 billion, up by more than $700 million, while cash from operating activities was $1.9 billion and adjusted net debt/EBITDA was 1.6x. For FY27, Origin guided Energy Markets EBITDA to $1.55 billion-$1.85 billion, total capex to $450 million-$650 million, APLNG production to 625-670 PJ, and APLNG capex and opex excluding purchases to $3 billion-$3.3 billion. Octopus guidance was GBP 25-GBP 50 EBITDA per customer for UK retail, and Kraken revenue is expected to grow at greater than 20%.

Frank Calabria said the company delivered a “good result” and emphasized that Origin is building on advantaged assets across customer, supply, international markets and technology. He highlighted the battery fleet, gas peaking capability, and the newly separated Octopus and Kraken businesses as key strategic pillars for growth through the energy transition. His tone was constructive but measured, repeatedly stressing discipline, strong cash generation, and the need to keep investing only where returns and market settings make sense.

Tony Lucas framed FY26 as a year of consistency: delivering earnings at the upper end of guidance, meeting the battery program timeline, and converting profit into cash. He pointed to Energy Markets EBITDA up 21%, cash from operations of $1.9 billion, adjusted free cash flow of $2.1 billion, and net debt/EBITDA at 1.6x, noting the metric now includes franked credits attached to APLNG distributions. He also said the board chose a stable dividend approach, with the $0.30 final dividend taking FY26 distributions to $0.60 fully franked and representing 50% of adjusted free cash flow.

Analysts focused on dividend conservatism, Energy Markets margins into FY28, Eraring’s potential life extension, retail regulation, Kraken monetization, and gas market oversupply risks. Management said the dividend was held steady because they prefer not to swing the cents per share and expect some working-capital normalization and lower LNG trading gains in FY27-FY28, while also targeting the lower end of the balance-sheet range. On Eraring, management said the current plan remains an April 2029 exit, no major overhaul is planned this year, and any life-extension decision would need to be made in advance, likely with roughly an 18-month lead time. On Kraken and Octopus, they said the broad valuation and monetization rules of thumb remain appropriate, but growth is lumpy because revenue only arrives after migrations; on gas, they said the short-term book looks resilient, but they want any reservation scheme to be well designed and not subject to annual discretion.