Origin Energy Shares Surge as Electricity Gains Drive Profit Upgrade

The Sydney-listed utility now expects underlying EBITDA for its Energy Markets unit to fall between A$1.55 billion and A$1.75 billion for the fiscal year ending June. This marks a notable increase from the previous range of A$1.40 billion to A$1.70 billion. Investors responded by driving Origin’s stock up 6.4% to A$11.78 in early trading, positioning the company near its peak valuation for the year.

Market Response and Growth Drivers

Market analysts largely welcomed the revision. Jefferies noted that the new A$1.65 billion midpoint surpasses its previous forecasts, with analyst Amit Kanwatia describing the upgrade as a "key positive." Similarly, Jarden’s Nik Burns characterized the mid-year performance as solid, highlighting that strong gross profits from electricity and the Australia Pacific LNG project successfully offset weaker results in the gas sector and higher service costs.

Despite the overall optimism, the report highlighted a seasonal half-year loss of A$89 million from Origin’s 23% stake in Octopus Energy. However, UBS analyst Tom Allen noted that the UK-based startup—recently valued at nearly US$2 billion—is expected to meet its annual earnings contribution target of up to A$150 million. Looking ahead, investors remain focused on whether growing battery storage revenues can eventually mitigate the impact of softening wholesale electricity prices.