Origin Energy profit beats estimates as battery growth lifts energy markets view

Origin Energy's shares surged following the release of annual results that surpassed expectations and painted a more favorable picture of its Energy Markets business, driven by the expansion of its battery portfolio. The stock climbed 4.8% to A$11.80, marking its highest point since May 7, even as the broader S&P/ASX 200 index declined by 0.6%, positioning Origin as one of the top performers on the benchmark.

Investors focused on the outlook for energy markets, where the company anticipates fiscal 2027 EBITDA between A$1.55 billion and A$1.85 billion. The midpoint of A$1.70 billion aligns closely with the division's FY26 result but surpasses the A$1.61 billion consensus estimate from S&P Global Visible Alpha. The anticipated growth from Origin's battery portfolio is expected to counteract the impact of lower wholesale electricity prices.

Profit for the company's statutory accounts surged to A$1.57 billion from A$1.48 billion, while underlying profit dropped to A$1.16 billion from A$1.49 billion, still outperforming the Visible Alpha consensus estimate of around A$1.14 billion. The Energy Markets segment emerged as the most robust component of the portfolio, with underlying EBITDA increasing by 21%, as stronger earnings in electricity and gas, coupled with ongoing customer growth, outweighed the adverse effects of weaker performance in Integrated Gas.

Lower oil-linked returns at Australia Pacific LNG and reduced LNG trading gains contributed to Integrated Gas's earnings decline, reflecting the anticipated normalization of commodity-linked earnings. The board announced a fully franked final dividend of 30 Australian cents per share, maintaining the same level as the A$30 cents paid for FY25.

Additionally, Origin reported the completion of the initial phase of its review into a data-security incident involving unauthorized access to certain customer information, which remains under a criminal investigation.