Reporting season: Origin Energy
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Q: Were Originï¿½s earnings above, in line with, or below your expectations?
Gareth James: Origin Energy reported an underlying net profit after tax of $893 million in 2012, that's 33% higher than the prior year. The net profit was pretty much in line with expectations. It was just 4% below consensus estimates and 2% above our forecast.
Q: Was the dividend above, in line with, or below your expectations?
James: Origin Energy announced a final dividend of $0.25 per share fully franked. That brings the full year dividend to $0.50 a share, which is in line with our forecast. The shares will trade ex-dividend on the 27 August, 2012. A dividend reinvestment plan will be in place, but no discount will be offered as part of the plan.
Q: What were the key drivers of the result?
James: The main reason for the rise in underlying net profit after tax was the full yearï¿½s contribution from the retail energy businesses acquired from the New South Wales government in 2011. Other businesses, including Contact Energy, their New Zealand based energy retailing business, as well as exploration and production contributed similar results to the prior year.
Q: Was there anything about the result that surprised you?
James: Origin Energy lost 160,000 retail customers in 2012, which represents around 4% of their entire customer base. This is quite disappointing to see, especially when considering the AGL Energy acquired 180,000 customers in 2012. This is obviously a little concerning for the market and we hope to see a stemming of this outflow in 2013.
Underlying net profit after tax in 2013 is expected to be similar to 2012 levels. This is below market's expectations and possibly explains the 5% fall in the share price on the day of the announcement.
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