Origin Energy Ltd (ASX:ORG) remained closely watched by investors following the release of its HY26 financial results and upgraded guidance for its Energy Markets division.

The company’s shares closed at AUD 11.59 on 13 May, down 0.26% for the Trading session. Despite the slight daily decline, Origin shares have gained approximately 4.41% over the past year, reflecting relatively resilient investor sentiment compared with broader market Volatility affecting energy and Utility stocks.

Broker confidence also remains supportive, with Jefferies maintaining a “Buy” rating on Origin Energy and a target price of AUD 13.04.

The company’s 12 February HY26 results announcement highlighted stable operational performance across key Business divisions, stronger retail energy Earnings, robust cash generation, and continued strategic Investment in battery infrastructure and technology platforms.

HY26 Results Reflect Mixed Earnings Performance

Origin reported statutory profit of AUD 557 million for the half year ended 31 December 2025, compared with AUD 1.017 billion in HY25.

Underlying Profit declined to AUD 593 million from AUD 924 million in the prior corresponding period, while underlying EBITDA fell to AUD 1.589 billion from AUD 1.926 billion.

The earnings decline was largely attributed to lower contributions from the Integrated Gas division and reduced earnings from Octopus Energy. However, stronger-than-expected performance within the Energy Markets segment partially offset these pressures.

Adjusted free Cash Flow increased significantly to AUD 705 million, up from AUD 518 million in HY25. The improvement was driven by strong operational cash generation within the Energy Markets business and lower tax payments.

Origin also received AUD 542 million in fully franked dividends from Australia Pacific LNG during the half.

The board maintained a fully franked Interim Dividend of 30 cents per share, consistent with the prior corresponding period, highlighting management’s confidence in the company’s cash flow position and Balance Sheet strength.

Energy Markets Division Drives Guidance Upgrade

One of the most significant developments from the results announcement was Origin’s decision to upgrade FY26 guidance for its Energy Markets division.

The company now expects Energy Markets underlying EBITDA to range between AUD 1.55 billion and AUD 1.75 billion, compared with previous guidance of AUD 1.4 billion to AUD 1.7 billion.

Management attributed the improved outlook primarily to stronger electricity business performance and continued operational efficiencies.

Energy Markets underlying EBITDA increased by AUD 122 million to AUD 860 million during HY26. Electricity Gross Profit rose AUD 102 million to AUD 840 million, benefiting from the lagged impact of higher wholesale electricity prices flowing into customer tariffs, alongside lower net pool costs and reduced green scheme expenses.

Natural Gas gross profit reached AUD 291 million despite higher Supply costs associated with the expiry of legacy contracts.

Chief Executive Officer Frank Calabria stated that the company’s retail business continued to strengthen, supported by customer growth, battery product offerings, and investments in customer experience improvements.

Origin recorded net customer growth of 96,000 accounts during the half, while average customer churn remained significantly below broader market levels.

Battery Investments and Energy Transition Strategy Remain Key Focus

Origin continues to position itself as a major participant in Australia’s energy transition through significant investment in battery storage and renewable integration.

Management highlighted the successful delivery of Eraring Battery 1 on time and within budget, while further progress was achieved across the Supernode, Mortlake, and Eraring Battery 2 projects.

The company views large-scale batteries and virtual power plant initiatives as increasingly important tools for improving energy supply flexibility and supporting grid stability.

Origin also emphasized the strategic value of its technology investments, including continued expansion in Data Analytics and artificial intelligence capabilities across the business.

Management believes these technology platforms are improving operational efficiency while enhancing customer engagement and energy management solutions.

The company’s diversified asset base, combining retail energy operations, gas production, and global technology exposure through Octopus Energy and Kraken Technologies, remains central to its long-term transition strategy.

Integrated Gas Earnings Decline Amid Softer LNG Conditions

While Energy Markets delivered stronger performance, Origin’s Integrated Gas segment reported lower earnings during HY26.

Underlying EBITDA from the division declined to AUD 860 million from AUD 1.251 billion in HY25. The reduction reflected lower realised LNG prices, weaker LNG trading gains, and softer production volumes from Australia Pacific LNG.

Despite the earnings decline, production remained relatively stable at 339 petajoules, supported by new wells, plant reliability improvements, and ongoing field optimisation activities.

The company also committed an additional AUD 25 million toward the Golden Beach gas storage project, which management believes could strengthen Origin’s east coast gas portfolio if successfully developed.

Origin continues to supply a significant portion of domestic gas Demand, with approximately 22% of Australia Pacific LNG sales volumes directed toward local customers.

Octopus Energy and Kraken Continue Global Expansion

Origin’s investment exposure to Octopus Energy and Kraken Technologies remains an important element of the company’s broader growth narrative.

Origin’s share of Octopus Energy underlying EBITDA was a loss of AUD 89 million during HY26. The loss reflected ongoing international expansion investments, smart Tariff development costs, and UK regulatory expenses.

Despite the near-term earnings drag, Octopus Energy continued expanding its customer base, adding 423,000 UK customer accounts to reach 14.5 million customers.

Kraken Technologies also continued growing rapidly, reaching 90 million customer accounts globally.

Management highlighted Kraken’s recent standalone Equity raising, which implied a valuation of approximately US$8.65 billion and represented a key milestone ahead of its planned formal separation from Octopus Energy during mid-2026.

Origin believes its stakes in Octopus and Kraken provide long-term exposure to global energy technology growth opportunities beyond the Australian market.

Conclusion

Origin Energy Ltd’s HY26 results highlighted the resilience of its Energy Markets business and the growing importance of its energy transition strategy. While lower LNG prices and weaker contributions from Octopus Energy affected overall profitability, stronger retail energy performance, robust free cash flow generation, and upgraded FY26 guidance supported investor confidence. The company’s ongoing investment in battery storage, technology platforms, and international energy businesses positions it to participate in evolving energy market trends both domestically and globally. Although Commodity market volatility and transition-related investment costs remain important factors, Origin’s diversified operations and disciplined execution continue to underpin its long-term strategic positioning.