Origin Energy reported weaker performance during the March quarter, marked by declining revenues in its liquefied natural gas (LNG) business and a significant cut in earnings guidance linked to Octopus Energy.
Specifically, Australia Pacific LNG (APLNG) project revenues fell by 12%, affected by lower sales volumes and a slight reduction in realized prices. The average LNG price stood at US$9.51 per mmbtu, in line with the downward market trend.
In addition, production declined 3% from the previous quarter, impacted by operational factors and the natural decline of the deposits.
Origin Energy and Octopus
On the other hand, the largest adjustment stems from Origin’s interest in Octopus Energy. The company revised downward its EBITDA expectations for fiscal 2026 to between -A$70 million and +A$30 million, well below previous estimates.
This adjustment was due to regulatory changes in the United Kingdom, higher gas costs and adverse weather conditions during the winter, factors that compressed margins despite sustained business growth.
Even so, Octopus continues to expand solidly. During the quarter it added around 700,000 new clients, while its Kraken technology platform continues to expand its international presence with new strategic alliances.
Mixed signals in electricity and gas
In the Australian energy market, Origin recorded divergent trends. Electricity sales were up 4% year-on-year, driven mainly by growing data center demand.
In contrast, gas volumes fell by 32%, reflecting lower commercial activity and the advance of renewable energy renewables and battery storage, which continue to displace traditional thermal generation. and battery storage, which continue to displace traditional thermal generation.
Financial strategy and energy transition
From a structural perspective, the company highlights that its exposure to oil-linked LNG contracts cushions the immediate impact of global volatility, shifting its effects to future years.
Origin also strengthened its financial position by refinancing APLNG, reducing debt costs and extending maturities, which improves its operating flexibility.
In parallel, the company continues to advance its energy transition strategy. Its initiatives include investments in battery storage in projects such as Eraring and Mortlake, along with the anticipated coverage of up to 85% of its coal needs by 2027.
Transition with short-term challenges
The quarter reflects a period of adjustment for Origin Energy. While the LNG business faces cyclical pricing and production pressures, its commitment to platforms such as Octopus and the growth in electricity demand point to medium-term opportunities.
The combination of regulatory, technological and market factors will continue to define the company’s performance in a changing energy environment.
Source: Origin Energy
Photo: Shutterstock