Key Highlights

  • Origin Energy recorded FY26 underlying EBITDA of AUD 3.22 billion, declining 6% year-on-year.
  • Energy Markets EBITDA increased 21% to AUD 1.70 billion, supported by retail growth.
  • Operating grid-scale battery capacity reached 1.3 GW following the Mortlake Battery's completion.
  • FY27 Energy Markets EBITDA guidance stands at AUD 1.55–1.85 billion amid changing wholesale electricity conditions.

Origin Energy Limited (ASX:ORG), one of Australia's major integrated energy companies, is navigating a changing Earnings environment as its domestic electricity and gas retail operations increasingly contribute to group profitability while earnings from Australia Pacific LNG (APLNG) moderate. The company's FY26 financial results highlighted contrasting trends across its operating divisions, with Energy Markets delivering higher earnings and customer growth, while Integrated Gas experienced lower commodity-linked contributions. Meanwhile, Origin continues expanding its grid-scale battery portfolio to support its electricity generation operations and respond to changing conditions in Australia's energy market.

For the financial year ended 30 June 2026, Origin reported underlying earnings before interest, tax, Depreciation and Amortisation (EBITDA) of AUD 3,220 million, compared with AUD 3,411 million in FY25.

The decline primarily reflected lower realised oil prices and reduced LNG trading gains, partly offset by improved performance across Energy Markets and Octopus Energy.

Despite lower underlying earnings, Origin generated higher adjusted free Cash Flow and maintained its annual Dividend at 60 cents per share.

The company's September 2026 quarterly update also highlighted continued Investment in energy storage, with the Mortlake Battery reaching commercial operations and additional capacity under development at Eraring.

These developments reflect Origin's strategy of combining electricity retail, flexible generation, battery storage and gas operations while expanding its exposure to international energy technology businesses.

Understanding Origin Energy's Integrated Energy Business

Origin Energy operates across electricity generation, energy retail, Natural Gas production and international energy technology investments.

The company's principal operations are organised into Energy Markets, Integrated Gas and investments in Octopus Energy and Kraken Technologies.

Energy Markets provides electricity, natural gas and related energy products to residential, commercial and industrial customers across Australia.

The division also manages electricity generation assets, including the Eraring coal-fired power station in New South Wales, gas-fired power stations and a growing portfolio of grid-scale batteries.

Origin's retail Business serves approximately 4.94 million customer accounts, providing electricity, gas and related services.

Integrated Gas primarily consists of Origin's interest in Australia Pacific LNG, a major coal seam gas production and liquefied natural gas export operation in Queensland.

APLNG supplies natural gas to Australia's domestic market and produces LNG for international customers.

Origin also holds a 22.7% economic interest across Octopus Energy and Kraken Technologies.

Octopus Energy operates an international energy retail business, while Kraken Technologies develops software used by energy retailers and utilities to manage customer accounts and energy services.

These businesses provide Origin with exposure to different energy markets, including electricity generation, retail services, gas production and digital technology.

However, their financial contributions are influenced by different factors, including wholesale energy prices, customer growth, Commodity markets and technology investment requirements.

FY26 Financial Results Reflect Lower Integrated Gas Earnings

Origin reported statutory net profit after tax of AUD 1,574 million for FY26, compared with AUD 1,481 million in FY25.

This represented an increase of approximately 6%.

However, Underlying Profit declined by approximately 22% to AUD 1,159 million from AUD 1,490 million in the previous financial year.

Underlying Earnings Per Share decreased to 67.4 cents, compared with 86.7 cents in FY25.

The difference between statutory and underlying earnings reflected the impact of accounting adjustments and items excluded from the company's underlying profit measure.

Group underlying EBITDA declined by approximately 6% to AUD 3,220 million.

The reduction was largely attributable to lower earnings from Integrated Gas, which offset growth in the company's domestic electricity and gas operations.

Despite the lower earnings contribution, adjusted free cash flow increased by AUD 867 million to AUD 2,074 million.

The improvement reflected cash generation from Energy Markets and APLNG, alongside lower tax payments.

Origin paid approximately AUD 158 million in tax during FY26, compared with AUD 767 million in FY25.

The company also received AUD 911 million in fully franked dividends from APLNG, compared with AUD 797 million in the preceding financial year.

These factors contributed to increased cash availability despite the decline in underlying profitability.

Origin's adjusted net Debt to adjusted underlying EBITDA ratio improved to 1.6 times from 1.7 times in FY25.

The group's financial position continues to support investment in generation, battery storage and retail energy services.

Energy Markets EBITDA Increases 21% During FY26

Origin's Energy Markets division recorded underlying EBITDA of AUD 1,701 million during FY26, compared with AUD 1,404 million in FY25.

This represented growth of approximately 21%.

The improvement was supported by higher electricity gross profit, increased retail customer accounts and reductions in operating costs.

Electricity Gross Profit increased to AUD 1,608 million from AUD 1,429 million in the preceding financial year.

Natural gas gross profit also improved to AUD 612 million, compared with AUD 593 million in FY25.

Origin's customer account base expanded by approximately 243,000 during the financial year, reaching 4.94 million accounts.

The company maintained a customer churn rate of 15.0%, compared with an industry average of 21.7%.

Customer churn measures the proportion of customers leaving a provider during a specified period.

A lower churn rate can support customer retention and reduce the expenditure associated with acquiring replacement customers.

Origin's cost to serve declined to AUD 642 million from AUD 698 million in FY25.

The reduction reflected continued operational efficiency initiatives and changes in customer servicing processes.

These developments contributed to the division's improved earnings performance.

However, future profitability will remain influenced by wholesale electricity prices, generation availability, retail competition and the cost of supplying customers.

Retail Customer Growth Supports Energy Markets Operations

Origin's retail customer base continued expanding during FY26, supported by its electricity, natural gas and related energy services.

The company added 243,000 customer accounts during the year, bringing the total to approximately 4.94 million.

Customer growth provides an opportunity to increase energy sales volumes and expand the range of services offered to households and businesses.

Origin continues developing products that help customers manage electricity consumption and energy costs.

These include Solar Energy services, battery products, electric vehicle charging solutions and digital energy management tools.

The company's retail strategy also includes integrating customer energy Assets into its virtual power plant platform.

Through these arrangements, participating customers can connect eligible batteries, solar systems and other energy technologies to a coordinated network.

This can help manage electricity Demand and support the efficient use of distributed energy resources.

Origin's customer growth continued into the September 2026 quarter.

Electricity sales volumes increased by approximately 3% compared with the corresponding period in 2025.

The increase reflected retail customer growth and higher business electricity demand, including additional consumption from data centres.

However, natural gas sales volumes declined by approximately 7% during the quarter.

The reduction was primarily attributable to lower gas-fired electricity generation, reflecting milder weather and increased contributions from renewable energy and battery storage.

These trends highlight the changing composition of Australia's electricity market, where demand for power continues alongside increasing renewable generation capacity.

Battery Storage Expansion Becomes Central to Origin's Strategy

Grid-scale battery storage represents an important component of Origin's electricity generation and energy management strategy.

Battery systems can store electricity when Supply is available and release it during periods of higher demand.

This capability is particularly relevant as Australia's electricity generation mix incorporates increasing amounts of solar and wind power.

Renewable electricity output varies with weather conditions and time of day, creating demand for flexible generation and storage technologies.

Origin is developing a grid-scale battery portfolio with planned capacity of approximately 1.8 gigawatts (GW) and 6.4 gigawatt-hours (GWh).

Following the completion of the Mortlake Battery in Victoria, operational capacity reached approximately 1.3 GW and 4.1 GWh.

This represents roughly 72% of the planned battery power capacity.

The portfolio includes major projects at Eraring in New South Wales, Mortlake in Victoria and contracted storage arrangements in Queensland.

Battery storage can support Origin's electricity portfolio by providing additional flexibility in responding to wholesale market conditions.

It may also reduce reliance on gas-fired generation during selected periods and assist with balancing electricity supply and demand.

However, battery profitability depends on wholesale electricity price differences, operating availability, charging costs and the timing of energy dispatch.

Mortlake Battery Reaches Commercial Operations

Origin's 300 MW Mortlake Battery in Victoria reached commercial operations during 2026.

The project provides approximately 650 MWh of energy storage capacity.

The battery is located alongside Origin's existing Mortlake gas-fired power station, which has a generation capacity of 566 MW.

The company approved approximately AUD 400 million for the battery development in January 2024, with construction commencing later that year.

The battery uses grid-forming inverter technology, which can provide additional services supporting electricity system stability.

Grid-forming batteries can help maintain power system performance as renewable generation increases and conventional power stations gradually retire.

The Mortlake project is also positioned to support renewable electricity generation in south-west Victoria.

Electricity generated from renewable sources can be stored during periods of high supply and discharged when demand increases.

This provides additional flexibility for Origin's generation portfolio.

The project was completed ahead of its original schedule and forms part of the company's broader investment in energy storage infrastructure.

Following the commencement of commercial operations, the battery's earnings contribution will depend on market conditions and the effectiveness of its dispatch strategy.

Eraring Battery Development Continues as Coal Operations Are Extended

Origin is also progressing its battery storage programme at the Eraring power station site in New South Wales.

Eraring remains an important electricity generation asset within the company's Energy Markets portfolio.

The coal-fired power station is now scheduled to continue operating until 30 April 2029.

The extension reflects the need to maintain electricity supply reliability while additional renewable generation, transmission infrastructure and storage capacity become available.

Origin is developing battery storage capacity at the Eraring site to support the transition towards a different electricity generation mix.

The second stage of the Eraring Battery is expected to commence operations during the March quarter of 2027.

This project represents the remaining major component of Origin's current 1.8 GW battery development programme.

The additional capacity is expected to provide greater operational flexibility within the company's electricity portfolio.

However, the timing of earnings contributions will depend on commissioning, market demand and operational performance.

Origin continues balancing the operation of existing generation assets with investment in battery storage and renewable energy opportunities.

Australia Pacific LNG Earnings Decline During FY26

Origin's Integrated Gas business experienced lower earnings during FY26, reflecting weaker commodity-linked contributions.

Integrated Gas underlying EBITDA declined to AUD 1,620 million from AUD 2,202 million in FY25.

Within this division, Origin's share of APLNG underlying EBITDA decreased by approximately 21% to AUD 1,478 million.

Other Integrated Gas earnings declined by approximately 57% to AUD 142 million.

The reduction reflected lower realised oil-linked LNG prices and reduced LNG trading gains.

APLNG produced approximately 668 petajoules (PJ) of natural gas during FY26 on a 100% project basis.

The average realised LNG price declined to AUD 13.64 per gigajoule (GJ).

Domestic gas prices averaged approximately AUD 6.45/GJ.

LNG export prices are influenced by international energy market conditions, particularly Crude Oil prices under certain long-term sales contracts.

Consequently, changes in oil prices can affect APLNG Revenue and earnings even when production volumes remain relatively stable.

Natural gas field decline also presents a longer-term operating consideration.

As existing wells mature, production can gradually decrease unless sufficient new wells are developed.

APLNG therefore continues investing in drilling and field development activities to maintain gas supply.

Despite lower earnings, Origin received AUD 911 million in fully franked dividends from APLNG during FY26.

This compared with AUD 797 million in FY25 and contributed to Origin's higher adjusted free cash flow.

September Quarter APLNG Revenue Improves on LNG Pricing

APLNG reported production of 162.8 PJ during the September 2026 quarter, compared with 164.6 PJ in the preceding quarter.

Although production declined slightly, revenue increased by approximately 32% quarter-on-quarter to AUD 2,601 million.

The improvement was primarily driven by higher realised oil-linked LNG prices.

The average realised LNG price reached approximately USD 13.27 per million British thermal units during the quarter.

The average realised domestic gas price was AUD 5.67/GJ for legacy and short-term sales.

These figures demonstrate the sensitivity of APLNG revenue to commodity pricing conditions.

The project continued supplying natural gas to domestic customers across Australia's east coast, including industrial users and manufacturers.

Well development activity also increased during the period to support future production.

However, new drilling typically requires time before reaching peak output.

Origin has indicated that production from new wells can take approximately two years to reach peak levels.

Consequently, field development investment remains important for addressing natural production decline over the medium term.

FY27 APLNG Production Guidance Reflects Natural Field Decline

Origin expects APLNG production of approximately 625 PJ to 670 PJ during FY27 on a 100% project basis.

This compares with actual production of 668 PJ during FY26.

The forecast reflects natural field decline across existing coal seam gas operations.

To address this challenge, APLNG plans to increase drilling and field development activities.

Total Capital Expenditure and operating expenditure at APLNG are expected to range between AUD 3.0 billion and AUD 3.3 billion during FY27.

The planned expenditure includes additional well development intended to support future gas production.

However, the financial contribution from new wells will depend on drilling progress, reservoir characteristics and production performance.

APLNG earnings will also remain exposed to international oil prices, LNG contract terms and foreign exchange movements.

Origin has estimated an FY27 oil and currency hedging loss of approximately AUD 163 million at APLNG.

This represents an additional consideration when assessing the potential earnings contribution from Integrated Gas.

Octopus Energy and Kraken Technologies Support International Expansion

Origin maintains a 22.7% economic interest across Octopus Energy and Kraken Technologies.

These businesses provide exposure to international electricity retail markets and energy management software.

Octopus Energy operates an expanding energy retail business, primarily in the United Kingdom, alongside operations in other international markets.

During FY26, Octopus Energy increased its customer accounts by approximately 2.2 million to reach 19 million.

Origin's share of underlying EBITDA from Octopus Energy and Kraken Technologies improved to a loss of AUD 8 million, compared with a loss of AUD 88 million in FY25.

The improvement reflected higher profitability from Octopus Energy's UK retail operations.

Kraken Technologies develops software that enables energy companies to manage customer accounts, billing, energy products and related operational processes.

During FY26, Kraken recorded revenue growth of approximately 19%.

Its contracted customer accounts increased by approximately 21 million to 95 million, representing growth of 28%.

The business is approaching its target of 100 million contracted customer accounts during 2027.

Kraken was formally separated from Octopus Energy in June 2026 and completed a USD 1 billion Equity raising in July.

Origin invested approximately AUD 210 million to maintain its economic interest in the business.

The separation established Kraken as a distinct technology company while maintaining its commercial relationship with Octopus Energy.

September Quarter Highlights Continued Octopus Customer Growth

Octopus Energy added approximately 308,000 customer accounts during the September 2026 quarter.

Of these, 257,000 accounts were added in the United Kingdom, while 51,000 were added across international markets.

The company moderated its expansion outside the UK during the quarter, partly reflecting higher wholesale energy prices.

It also increased its focus on direct customer Acquisition channels.

The decision reflects the importance of maintaining customer profitability rather than pursuing account growth without considering operating costs.

Meanwhile, Kraken continues developing its contracted customer base and expanding its software capabilities.

Origin expects the company's international energy technology investments to provide additional growth opportunities over time.

However, their financial contribution will depend on customer additions, operating margins, technology expenditure and market conditions.

Virtual Power Plant Expansion Supports Distributed Energy Management

Origin is continuing to expand its virtual power plant capabilities through its Loop platform.

At 30 June 2026, the virtual power plant reached approximately 1,589 MW of connected capacity across 409,000 services.

Virtual power plants coordinate distributed energy resources such as rooftop solar systems, household batteries and other eligible customer-connected devices.

By combining these resources through digital technology, energy providers can help manage electricity demand and support grid stability.

For Origin, the platform complements its investment in grid-scale battery storage.

Large batteries provide centralised storage capacity, while virtual power plants allow the company to coordinate smaller energy assets distributed across customer locations.

The combined approach can provide additional flexibility in managing electricity supply and demand.

Origin is also developing customer products that support electric vehicle charging, solar energy use and household energy management.

These initiatives form part of the company's strategy to expand beyond traditional electricity and gas retail services.

However, financial benefits will depend on customer participation, technology integration and changing energy market conditions.

Yanco Delta Wind Farm Remains Under Assessment

Origin continues evaluating the proposed Yanco Delta Wind Farm in New South Wales.

The project has planned generation capacity of approximately 1.5 GW and represents a potential addition to the company's renewable energy development pipeline.

The development has received support through the Australian Government's Capacity Investment Scheme.

However, Origin has indicated that project Economics remain challenging because of cost inflation.

The company is continuing to assess development costs, commercial arrangements and expected returns before making a final investment decision.

Large-scale renewable energy projects require significant upfront investment in generation equipment, transmission infrastructure and construction.

Higher equipment, labour and financing costs can influence project economics.

Origin's assessment reflects its focus on capital allocation and investment returns as it continues expanding its renewable energy and storage portfolio.

The timing of any final investment decision will depend on the outcome of the commercial and financial assessment.

Cash Generation and Dividend Payments Remain Important Financial Measures

Origin's adjusted free cash flow increased to AUD 2,074 million during FY26, compared with approximately AUD 1,207 million in FY25.

The improvement was supported by operating cash generation, APLNG dividends and lower tax payments.

Despite the decline in underlying profit, the company maintained its full-year dividend at 60 cents per share.

This comprised a fully franked Interim Dividend of 30 cents and a fully franked final dividend of 30 cents per share.

The total distribution represented approximately 50% of adjusted free cash flow.

Origin continues balancing Shareholder distributions with the capital requirements of its electricity generation, battery storage and international investment activities.

The company expects total capital expenditure of AUD 450 million to AUD 650 million during FY27.

This represents lower growth expenditure as the current battery development programme approaches completion.

The reduction in planned capital expenditure could provide additional financial flexibility, although the final cash flow outcome will depend on operating earnings and other financial commitments.

Origin's adjusted net debt to adjusted underlying EBITDA ratio of 1.6 times at the end of FY26 provides a measure of its borrowing position relative to earnings.

Maintaining financial flexibility remains important as the company continues investing in energy infrastructure and customer services.

FY27 Energy Markets Guidance Reflects Changing Wholesale Conditions

Origin expects Energy Markets underlying EBITDA of AUD 1,550 million to AUD 1,850 million during FY27.

The guidance compares with actual EBITDA of AUD 1,701 million during FY26.

At the midpoint of AUD 1,700 million, the forecast is broadly in line with the previous financial year's result.

However, the range incorporates uncertainty associated with wholesale electricity prices and the timing of earnings contributions from new battery capacity.

Origin expects lower wholesale electricity prices to influence Energy Markets profitability during FY27.

These effects are expected to be partly offset by the ramp-up of its battery storage portfolio.

New storage capacity provides additional operational flexibility by allowing the company to charge batteries during selected periods and discharge electricity when demand and market conditions support generation.

However, earnings from battery storage will depend on wholesale price movements, dispatch performance and operational availability.

Origin reaffirmed its FY27 guidance during its Annual General Meeting on 14 October 2026.

The outlook assumes no material changes in market conditions or the regulatory environment.

Key Risks and Operational Considerations

Origin's financial performance remains exposed to changes in wholesale electricity prices, international LNG markets and regulatory conditions.

Lower wholesale electricity prices may affect Energy Markets profitability, although battery storage and flexible generation assets provide opportunities to manage changing market conditions.

APLNG earnings remain sensitive to oil-linked LNG pricing, foreign exchange movements and natural gas field decline.

Increased drilling expenditure will also influence the project's financial requirements during FY27.

The company's battery development programme carries operational risks associated with commissioning, integration and electricity market performance.

Although Origin has made considerable progress in expanding storage capacity, the financial contribution from new assets will depend on market conditions and operational availability.

The continued operation of Eraring until April 2029 also involves maintenance requirements, fuel supply considerations and environmental obligations.

Policy changes represent another area of uncertainty.

Potential reforms affecting domestic gas supply, electricity market arrangements, environmental approvals and data centre energy consumption could influence future investment decisions.

Origin also experienced a customer data security incident in July 2026 involving unauthorised access to certain customer information.

The company has undertaken security improvements and continues managing the operational and regulatory implications of the incident.

Cybersecurity, customer data protection and technology infrastructure remain important considerations as Origin expands its digital retail services.

What Lies Ahead for Origin Energy in FY27?

Origin Energy enters FY27 with an increasing contribution from domestic electricity retail and battery storage, alongside a more moderate outlook for Integrated Gas.

The company expects Energy Markets underlying EBITDA of AUD 1,550 million to AUD 1,850 million, reflecting lower wholesale electricity prices partly offset by the contribution from additional battery capacity.

APLNG production is projected at 625 PJ to 670 PJ as natural field decline continues to influence gas output.

The company is also progressing additional drilling activity to support future production.

Within Energy Markets, the second stage of the Eraring Battery is expected to commence operations during the March quarter of 2027.

The completion of this project will mark another milestone in Origin's 1.8 GW battery development programme.

Meanwhile, Octopus Energy is targeting UK EBITDA of GBP 25 to GBP 50 per customer, while Kraken Technologies expects revenue growth exceeding 20%.

The company is also continuing to evaluate the Yanco Delta Wind Farm and expand its virtual power plant capabilities.

Origin's FY27 half-year results will provide further information regarding electricity retail profitability, battery earnings contributions, APLNG performance and cash generation.

The group's changing earnings composition reflects the increasing importance of energy retail, flexible generation and storage infrastructure alongside its established gas operations.

Future financial performance will depend on how effectively these businesses contribute to earnings while Origin manages commodity pricing, energy market developments and investment requirements.

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