Australia’s Origin Energy posted a 38% rise in half-year underlying profit and more than doubled its dividend, but has cut its full-year profit forecast.
‘The outfit also said it would scrap its planned share buyback programme citing current market conditions.
Underlying profit for 2009 financial year is now expected to be between 20% and 25% higher than a year ago, Origin said in a statement today, compared with its October guidance of a 30% to 40% lift. Lower margins in the retail business in the second half, higher exploration expenses as well as lower earnings from its oil and condensate production amid a recent collapse in global oil prices will weigh on earnings, it said. Profits from New Zealand power company Contact Energy, 50% owned by Origin, will also make a lower contribution. “The board has determined that given the current market conditions, where availability of capital has been severely reduced, it is prudent for Origin to retain its funding capacity to enable it to invest in growth opportunities,” Origin said in a statement. It would increase its first half dividend to 25 cents from 12 cents a year ago and will assess further capital management initiatives in the next financial year.