2024 Annual Report
Good change
1
Contents
Contents
A message from Scott and Frank
2
About Origin
4
Where We Operate
5
Board of Directors
6
Executive Leadership Team
8
Operating and Financial Review
11
Directors’ Report
51
Remuneration Report
55
Lead Auditor’s Independence Declaration
80
Financial Statements
81
Share and Shareholder Information
153
Exploration and Production Permits and Data
156
Annual Reserves Report
158
Five-year Financial History
162
Glossary and Interpretation
164
2
Annual Report 2024
A message from
Scott and Frank
“Origin is confident that our strategy
will create sustained value in
a decarbonising world, which is
ultimately good for the environment,
our customers and shareholders.”
Welcome to the 2024 Annual Report
Over the last year, the team at Origin has worked hard to deliver on
our ambition to lead the energy transition through cleaner energy
and customer solutions.
We are pleased to have demonstrated important momentum on our
strategy in FY24.
We have acquired the large-scale and advanced Yanco Delta
Wind Farm development project, the Ruby Hills and Northern
Tablelands wind farm development projects and the Salisbury Solar
Farm development project, all in New South Wales. We have
also approved construction of large-scale batteries at Eraring and
Mortlake, and secured battery offtake agreements with Supernode
project in Queensland, building a 1.5 GW portfolio of owned and
tolled battery storage systems.
Origin’s Retail customer accounts grew and sales of broadband and
electric vehicles rose, while our virtual power plant, Loop, scaled to
1.4 GW. These outcomes were enabled by having Australia’s leading
retail brand, and our focus on delivering award-winning customer
service, enabled by the Kraken technology platform and advanced
data and analytics.
We are acutely aware of the pressure on Australian households
given the rising cost of living and the important role we play in
providing reliable and affordable energy. We welcome energy bill
relief for all households provided by federal and state governments,
while Origin focused specifically on supporting our most vulnerable
customers with around $100 million committed across FY24 and
FY25, including to freeze tariffs for these customers.
An important factor in helping to keep downward pressure on
prices is ensuring reliable energy, and it is pleasing to see how well
our generation fleet performed over the year. Output from Eraring
Power Station rose by 2.1 TWh to 14.3 TWh, with our fleet of gas
peaking power stations also increasing output as they helped firm
the growing amount of variable energy supply in the grid.
More broadly, progress on the energy transition in Australia is not
where it needs to be, with renewables and transmission projects
not coming online fast enough to replace ageing coal fired power
stations. In May, we agreed with the New South Wales Government
to delay the closure of Eraring by two years to August 2027 to
support security of the state’s electricity supply. The agreement
struck the right balance between recognising the importance of
Eraring to the security and affordability of power in the state, and
the need to support the ongoing operation of Eraring should it come
under financial pressure caused by the growth in renewables.
During the year, discussions concluded with a Consortium of
investors which made a series of proposals to acquire Origin over the
period August 2021-December 2023. The Board fulfilled its duties
to present these to Origin shareholders for consideration. These
proposals highlighted to the broader market that Origin represents a
highly strategic platform and that we are ideally positioned to benefit
from the energy transition.
During the lengthy period of engagement, progress against our
strategy accelerated and against that backdrop the proposals did
not achieve adequate shareholder support.
3
A message from Scott and Frank
While expectation of future performance is high, so too is
our confidence in the long-term outlook for our business as
we scale opportunities focused on generating value from the
energy transition.
Financial performance
Origin’s FY24 financial performance highlighted the benefits of
the company’s diverse portfolio and the continued strategy of
disciplined and efficient capital allocation to allow us to invest in
growth and fund shareholder distributions.
In FY24, we recorded higher earnings from Energy Markets and LNG
trading, more than offsetting lower earnings from Australia Pacific
LNG and Octopus Energy.
On a statutory basis, Origin announced a profit of $1,397 million, up
from $1,055 million on the prior year.
Underlying profit increased to $1,183 million, $436 million higher
than the previous year driven by an uplift in earnings in the Energy
Markets and Integrated Gas businesses.
Origin received cash distributions from Australia Pacific LNG of
$1,384 million. Net of oil hedging, Origin received cash distributions
of $1,367 million. These distributions contributed to a strong
Adjusted Free Cash Flow position of $1,296 million.
The Board has determined a fully franked final dividend of 27.5 cents
per share. For FY24, shareholders will have received total dividends
of 55 cents per share, an increase from 36.5 cents per share in FY23.
Operational performance
Underlying EBITDA for Energy Markets was $1,655 million, an
increase of $617 million on the prior year primarily driven by
increased electricity gross profit as higher wholesale costs were
recovered following a period of under recovery. In addition, fuel
costs were lower due to the legislated coal price cap. Natural Gas
gross profit declined, as trading gains from the previous year were
not repeated and gas procurement costs were higher.
Total customer accounts increased by 132,000 to 4.7 million, driven
by new electricity, gas and broadband customers. Origin’s average
churn of 13.2 per cent remained considerably better than the market
average of 20.1 per cent. An increase in bad and doubtful debt
expense reflected high bill sizes and slower collections, with the
rising cost of living impacting on customers’ ability to pay their
energy bills.
Origin Zero more than doubled the number of business customers
on solutions broader than electricity or natural gas, providing digital
insights subscriptions, demand management and electric vehicle
fleet and subscription solutions.
Underlying EBITDA for Integrated Gas was $1,951 million, $32 million
higher than the prior year, due to increased production and lower
hedging losses, partially offset by lower commodity prices. Australia
Pacific LNG production increased three per cent to 694 PJ due to
continuing well and field optimisation activities.
Origin’s share of Octopus Energy Underlying EBITDA declined on
the prior year to $55 million, reflecting lower earnings in the UK retail
business following the recovery of higher wholesale prices in tariffs
in the prior period and continued investment in growth. There was a
73 per cent increase in Kraken licensing revenue with a 60 per cent
uplift in customer accounts contracted to the platform globally, with
the outlook for growth at Octopus remaining positive.
Outlook
The following guidance is provided on the basis that
market conditions and the regulatory environment do not
materially change.
Origin expects Energy Markets Underlying EBITDA in FY25 of
$1,100 – $1,400 million. Electricity gross profit is expected to
decrease, with regulated tariffs reflecting lower wholesale costs
and retail cost allowance, combined with higher coal costs, partially
offset by growth in customer accounts and continued focus on
value management.
Australia Pacific LNG FY25 production is expected to be 685 –
710 PJ (APLNG 100 per cent), reflecting stable operations. Unit
capital expenditure and operating expenditure is expected to be
steady at $3.9 – $4.3/GJ, reflecting high power costs and higher
non-operated spend in FY25.
Gains from LNG Trading are expected to be $400 – $450 million in
FY25, and $50 – $150 million in FY26.
Octopus Energy FY25 EBITDA contribution is expected to grow to
$100 – $200 million as further growth in the UK retail business and
Kraken licensing is partly offset by continued investment in scaling
the business.
Our strategy, people and Board
Origin is confident that our strategy will create sustained
value in a decarbonising world, which is ultimately good for
the environment, our customers and shareholders. Our FY24
performance demonstrates important momentum on our strategy
and we are confident about our ability to deliver both future growth
opportunities and strong returns to our shareholders.
Throughout FY24, we remained focused on creating a workplace
where all our people feel valued, included, respected and safe
at work. Importantly, our key people metrics remained relatively
consistent with the prior year’s performance, with our Total
Recordable Injury Frequency Rate (TRIFR) at 4.1, our engagement
score at 7.7 and the number of females in senior leader positions at
44 per cent.
The Board composition was unchanged in FY24, and we are grateful
for this stability and the dedication of our directors, especially given
the dual challenges of delivering continued strong operational and
financial performance and activities related to the proposed scheme
of arrangement.
In conclusion, we believe Origin’s leading customer position, diverse
portfolio, growing renewables and storage pipeline, combined with
access to international growth through our investment in Octopus
Energy, positions the company advantageously as the energy
transition progresses.
We would like to thank you for your continued support of Origin,
and we look forward to welcoming you at this year’s Annual
General Meeting.
Scott Perkins
Chairman
Frank Calabria
Chief Executive Officer
4
Annual Report 2024
About Origin
Leading integrated
energy company
Listed on the Australian Securities
Exchange in 2000
4.7 million customer accounts
Electricity, gas, LPG
and broadband customers
across Australia
> 5,500
employees
Inclusivity in the workplace;
leading parental support
Powering
Australia
7,800 MW generation portfolio,
including 1,755 MW owned
and contracted renewables
and storage
27.5% interest in Australia
Pacific LNG
Continue to be a significant
contributor to the east coast
gas market
Transitioning our business to
net zero
Growing our portfolio of
renewables and cleaner
energy solutions
Climate ambitions embedded
in our strategy
Emissions intensity target
consistent with 1.5°C
pathway envelope1
Driving future
energy innovation
~23% interest in Octopus Energy,
investing in new technologies,
start-ups and future fuels
Supporting
Australian communities
The Origin Energy Foundation has
contributed more than $41 million
since inception
1
Pursuant to the methodology set out in our Climate Transition Action Plan
South East Queensland
Bowen/
Surat
basins
Gladstone
Adelaide
Melbourne
Hobart
Brisbane
Bowen/
Surat
basins
Gladstone
LNG Export
Browse
Basin
Sydney
645k
520k
1,155k
402k
691k
179k
270k
205k
2k
18k
South East Queensland
Bowen/
Surat
basins
Brisbane
Gladstone
Gas
Pumped hydro
Solar
Wind
Coal
Storage (under construction)
LPG seaboard terminal
Electricity customer accounts
Natural gas customer accounts
Origin/JV upstream acreage
APLNG upstream acreage
Production facility
APLNG pipeline
Exploration & production acreage
Generation (owned & contracted)
5
Where We Operate
Where We Operate
6
Annual Report 2024
Board of
Directors
Scott Perkins
Independent
Non-executive Chair
Tenure 8 years 11 months
(3 years 10 months as Chair)
Scott Perkins joined the
Board in September
2015 and was appointed
Chair in October 2020.
He is Chair of the
Nomination Committee and
a member of the Audit and
Risk, Remuneration, People
and Culture, Safety and
Sustainability committees.
Scott has extensive
Australian and international
experience as a leading
corporate adviser. He was
formerly Head of Corporate
Finance for Deutsche Bank
Australia and New Zealand
and a member of the
Executive Committee. Prior
to that he was CEO
of Deutsche Bank New
Zealand and Deputy CEO of
Bankers Trust New Zealand.
Scott has been a Non-
executive Director of
Woolworths Group Limited
since September 2014
(Chair from October 2022).
He is also a Non-executive
Director of Brambles
Limited (since May 2015)
and the New Zealand
Initiative (since 2012). He is
Chair of Sweet Louise (since
2005) and Garvan Institute
of Medical Research (since
December 2023). Scott was
previously a Director of the
Museum of Contemporary
Art in Sydney (2011 –
2020) and a Non-executive
Director of Meridian Energy
(1999 – 2002).
Scott has a longstanding
commitment to breast
cancer causes, the
visual arts and public
policy development.
Scott holds a Bachelor of
Commerce and a Bachelor
of Laws (Hons) from
Auckland University.
Ilana Atlas AO
Independent
Non-executive Director
Tenure 3 years 6 months
Ilana Atlas joined the
Board in February 2021.
She is a member of the
Remuneration, People and
Culture committee.
Ilana has been a Non-
executive director of
Scentre Group Limited
since May 2021 and was
appointed Chair in October
2023. She is the Chair of
Jawun, Deputy Chair of the
National Gallery of Australia
and a Director of the Paul
Ramsay Foundation.
Ilana was previously Non-
executive director of ANZ
Group Holdings Limited
(Jan-Dec 2023) (previously
Australian & New Zealand
Banking Group Limited,
since September 2014) and
Chair of Coca-Cola Amatil
Limited (2017–2021). Her
last executive role was
Group Executive, People,
at Westpac, where she
was responsible for human
resources, corporate affairs
and sustainability. Prior to
that role, she was Group
Secretary and General
Counsel. Before her 10-
year career at Westpac,
Ilana was a partner in
law firm Mallesons Stephen
Jaques (now known as
King & Wood Mallesons).
In addition to her practice
in corporate law, she held
a number of management
roles in the firm including
Executive Partner, People
and Information, and
Managing Partner.
Ilana holds a Bachelor of
Jurisprudence (Honours)
and Bachelor of Laws
(Honours) from the
University of Western
Australia and Masters of
Laws from the University
of Sydney.
Maxine Brenner
Independent
Non-executive Director
Tenure 10 years 9 months
Maxine Brenner joined
the Board in November
2013. She is Chair of the
Safety and Sustainability
Committee and a member
of the Audit and Risk and
Nomination committees.
Maxine was previously
a Managing Director of
Investment Banking at
Investec Bank (Australia)
Ltd. Prior to Investec,
Maxine was a Lecturer
in Law at the University
of NSW and a lawyer
at Freehills, specialising in
corporate law.
Maxine is a Non-executive
Director of Telstra Group
Limited (since February
2023) and Non-executive
Director and Chair of
the Risk Committee of
Woolworths Group Limited
(since December 2020).
She is also a member of the
University of NSW Council.
Maxine’s former
directorships include
Qantas Airways Limited
(2013 – 2024), Orica
Limited (2013 – 2022),
Growthpoint Properties
Australia (2012 – 2020),
Treasury Corporation of
NSW, Bulmer Australia
Ltd, Neverfail Springwater
Ltd and Federal Airports
Corporation, where she was
Deputy Chair. In addition,
Maxine has served as a
Council Member of the
State Library of NSW and
as a member of the
Takeovers Panel.
Maxine holds a Bachelor of
Arts and a Bachelor of Laws.
Frank Calabria
Managing Director &
Chief Executive Officer
Tenure 7 years 10 months
Frank Calabria was
appointed Managing
Director & Chief Executive
Officer in October 2016.
Frank is a member
of the Safety and
Sustainability Committee
and a Director of the Origin
Energy Foundation.
Frank first joined Origin as
Chief Financial Officer in
November 2001 and was
appointed Chief Executive
Officer, Energy Markets in
March 2009. In that latter
role, Frank was responsible
for the integrated business
within Australia including
retailing and trading of
natural gas, electricity and
LPG, power generation and
solar and energy services.
Frank is a Director of the
Australian Energy Council
(since 2016) and Australian
Energy Producers (since
2017). He is a former Chair
of the Australian Energy
Council and former Director
of the Australian Energy
Market Operator.
Frank has a Bachelor of
Economics from Macquarie
University and a Master
of Business Administration
(Executive) from the
Australian Graduate School
of Management. Frank is
a Fellow of the Chartered
Accountants Australia and
New Zealand and a Fellow
of the Financial Services
Institute of Australasia.
Greg Lalicker
Independent
Non-executive Director
Tenure 5 years 5 months
Greg Lalicker joined the
Board in March 2019. He is
a member of the Safety and
Sustainability Committee.
Greg is the Chief
Executive Officer of Hilcorp
Energy Company, based
in Houston, USA. Hilcorp
is the largest privately
held independent oil
and gas exploration and
production company in the
United States.
Greg joined Hilcorp’s
leadership team in 2006
as Executive Vice President
where he was responsible
for all exploration and
production activities. He
was appointed President in
2011 and Chief Executive
Officer in 2018. Prior to
working for Hilcorp, Greg
was with BHP Petroleum
based in Midland, Houston,
London and Melbourne
as well as McKinsey &
Company where he worked
in its Houston, Abu Dhabi
and London offices.
Greg graduated as a
petroleum engineer from
the University of Tulsa.
He also has a Master of
Business Administration and
a law degree.
7
Board of Directors
Mick McCormack
Independent
Non-executive Director
Tenure 3 years 8 months
Mick McCormack joined
the Board in December
2020. He is a member
of the Audit and Risk,
Remuneration, People and
Culture and Safety and
Sustainability committees.
Mick is Chair of Central
Petroleum Limited (since
November 2020) and
Non-executive Director of
Whitehaven Coal Limited
(since February 2024). He is
also Chair of the Australian
Brandenburg Orchestra
Foundation, a director of the
Clontarf Foundation, and a
Patron of the Australian Ice
Hockey League.
Mick was previously
Managing Director and CEO
of APA Group (2004-2019)
and Non-executive Director
of Austal Limited (2020 –
2024). Mick has more than
37 years of experience in the
energy and infrastructure
sectors, including gas-fired
and renewable energy
power generation, gas
processing, LNG and
underground storage. Prior
to joining APA in 2000,
Mick held various senior
management roles with
AGL Energy.
Mick holds a Masters
of Business Administration
from the University of
Queensland, a Graduate
Diploma of Engineering
from Monash University, a
Bachelor of Applied Science
from the University of
Queensland and is a Fellow
of the Australian Institute of
Company Directors.
Steven Sargent
Independent
Non-executive Director
Tenure 9 years 3 months
Steven Sargent joined the
Board in May 2015. He
is Chair of the Origin
Energy Foundation, Chair of
the Remuneration, People
and Culture Committee
and a member of the
Nomination and Safety and
Sustainability committees.
Steven’s executive career
included 22 years at General
Electric, where he gained
extensive multi-industry,
international experience
leading businesses in
industries including energy,
healthcare and financial
services across the USA,
Europe and Asia Pacific.
Steven has been a
Non-executive Director
of infection prevention
company Nanosonics
Limited since July 2016
and was appointed Chair
in 2022. He is also
a Non-executive Director
of Ramsay Healthcare
Limited (since December
2021). Steven’s unlisted
board activities include
Non-Executive Director
of The Great Barrier
Reef Foundation.
Steven was previously
Chair of OFX Group
Limited (2016-2022), and
Non-Executive Director of
Veda Group Limited.
Steven holds a Bachelor of
Business from Charles Sturt
University and is a Fellow
with the Australian Institute
of Company Directors.
Nora Scheinkestel
Independent
Non-executive Director
Tenure 2 years 5 months
Nora Scheinkestel joined
the Board in March 2022.
She is Chair of the
Audit and Risk Committee
and a member of the
Nomination committee.
Nora is an experienced
company director with
almost 30 years experience
as a non-executive chair
and director of companies
in a wide range of
industries including public,
government and private
sectors. She has a long
track record in highly
regulated sectors such as
infrastructure and financial
services and has served
as chair and director of
numerous regulated utilities
in the electricity, gas and
water sectors.
A former banking executive,
she has extensive financial
and risk management
expertise, having chaired
audit and risk committees
of a number of
listed companies.
Nora is currently a Non-
executive Director of
Qantas Airways Limited
(March 2024), Brambles
Limited (since 2020)
and Westpac Banking
Corporation (since 2021).
Previous directorships of
publicly listed companies
include Telstra Corporation
Limited (2010 – 2022),
the Atlas Arteria group
(2014 – 2020), which she
chaired, Ausnet Services
Ltd (2016 – 2022), Orica
Limited, Newcrest Limited,
Pacific Brands Limited and
Stockland Group.
Nora holds a Bachelor
of Laws (Honours) First
Class and a Doctor
of Philosophy from the
University of Melbourne.
Dame Joan
Withers DNZM
Independent
Non-executive Director
Tenure 3 years 10 months
Joan Withers joined the
Board in October 2020. She
is a member of the Audit and
Risk committee.
Joan has spent over
25 years working in the
media industry holding CEO
positions at both Fairfax
NZ Ltd and The Radio
Network and she also
has significant corporate
governance experience.
She is currently Chair of The
Warehouse Group Ltd (since
2016), director of ANZ Bank
NZ Ltd (since July 2013) and
Sky Network TV Ltd (since
2019). She has previously
held Chair positions
at Auckland International
Airport (1997 – 2013),
Mercury NZ Ltd (2009 –
2019) and TVNZ (2015 –
2017). She has also held
directorships on the boards
of some of New Zealand’s
largest companies including
Meridian Energy Ltd and
Tourism Holdings Ltd. Prior
to her appointment as CEO
of Fairfax NZ Ltd, Joan
was a director on the
Australian board of John
Fairfax Holdings Ltd.
In June 2024, Joan
was appointed Dame
Companion of the New
Zealand Order of Merit
for services to business,
governance and women.
Joan holds a Masters
Degree in Business
Administration from The
University of Auckland.
8
Annual Report 2024
Executive
Leadership Team
Jon Briskin
Executive General
Manager, Retail
Jon Briskin joined Origin in
2010 and was appointed
Executive General Manager,
Retail in December 2016.
Jon leads the
teams responsible for
energy sales, marketing,
product development and
service experience for
Origin’s residential and
SME customers.
Jon has held various
roles at Origin, leading
customer operations,
service transformation and
customer experience and
prior to Origin worked as a
management consultant.
Greg Jarvis
Executive General
Manager, Energy Supply
and Operations
Greg Jarvis joined Origin in
2002 as Electricity Trading
Manager and was appointed
Executive General Manager,
Energy Supply & Operations
in December 2016.
Greg is responsible
for Wholesale, Trading,
Generation, HSE and LPG.
Greg has over 20 years’
experience in the financial
and energy markets.
Kate Jordan
General Counsel and
Executive General
Manager, Company
Secretariat, Risk
and Governance
Kate Jordan joined Origin
in March 2020 as
General Counsel and
Executive General Manager,
Company Secretariat, Risk
and Governance.
Kate leads the legal,
company secretariat, risk
and assurance, internal audit
and group and energy
markets compliance teams.
Prior to joining Origin, Kate
was Deputy Chief Executive
Partner at Clayton Utz. Kate
has over 25 years’ legal
experience across a range of
corporate transactions.
Tony Lucas
Chief Financial Officer
Tony Lucas joined Origin in
2002 and held a number
of senior executive positions
within the company over 22
years and was most recently
the Executive General
Manager of Origin’s Future
Energy and Technology
prior to becoming Chief
Financial Officer.
Tony leads the teams
responsible for all
finance activities, corporate
strategy, corporate
development, sustainability,
capital markets, technology
and investor relations.
Mr Lucas has more
than 30 years’ experience
across finance, strategy,
transactions, risk, regulatory
policy and advocacy,
technology and innovation,
and has been part of Origin’s
Executive Leadership Team
since 2016. He holds
a Diploma in Business
Studies and a Masters
of Applied Finance from
Macquarie University.
James Magill
Executive General
Manager, Origin Zero
James Magill joined Origin
in March 2022 and leads
the newly formed business
unit, Origin Zero. Origin Zero
provides large businesses
with a range of energy and
decarbonisation services as
well as a suite of e-mobility
solutions for work, home
and on the road.
Prior to joining Origin,
James held leadership
roles at Centrica, AGL
and Genesis Energy in
retail, technology, M&A
and strategy.
9
Executive Leadership Team
Sharon Ridgway
Executive General
Manager, People
and Culture
Sharon Ridgway joined
Origin in 2009 and
has been responsible for
People and Culture since
December 2016.
Sharon’s team provide
strategic support to the
business in key areas such
as engagement, diversity,
talent management and
culture change.
Prior to Origin, Sharon
developed a wide range
of experience across
operational and human
resources roles whilst
working in Dixons, a large
European electrical retailer.
Samantha Stevens
Executive
General Manager,
Corporate Affairs
Samantha Stevens joined
Origin in March 2018 as
Executive General Manager,
Corporate Affairs.
Samantha is responsible
for Origin’s external affairs,
government relations,
employee communication
functions and the Origin
Energy Foundation. She also
serves as a non-executive
director on the Board of
the Foundation.
Samantha has 25 years’
experience in corporate
affairs, mainly in the
resources, industrials and
financial services sectors.
Prior to joining Origin,
Samantha headed up
Corporate Affairs for the
global mining services
company, Orica, and
previously led the global
media function and all
Corporate Affairs M&A
activity at global mining
house, BHP, and has held
senior Corporate Affairs
roles at two of Australia’s
major banks.
Andrew Thornton
Executive General
Manager, Integrated Gas
Andrew joined Origin in
2012 and was appointed as
Executive General Manager
– Integrated Gas in
November 2021.
Andrew is responsible
for Origin’s role as
upstream operator and for
the marketing of domestic
gas on behalf of Australia
Pacific LNG. He also has
accountability for Origin’s
activities in renewable fuels.
Prior to joining Origin in
2012, Andrew spent 10
years in private equity
and investment banking,
including at Goldman Sachs
where he served as an
Executive Director in the
Principal Investment Area.
Andrew has also held
commercial roles with the
Super Retail Group, and
has investment banking
experience in London and
Sydney, where he worked in
M&A and capital markets.
10
Annual Report 2024
11
Operating and Financial Review
Operating and Financial Review
For the full year ended 30 June 2024
This report forms part of the Directors’ Report.
1 Highlights
Our purpose underpins everything we do: Getting energy right for our
customers, communities and planet
Getting energy right for the planet
We care about our impact on the environment. Our long-term ambition is to
achieve net zero Scope 1, 2 and 3 emissions by 2050. We are working to
progressively decarbonise our business and acknowledge the path to achieving
our emissions reductions targets may not be linear.
During FY24, we:
•
decreased total Scope 1, 2 and 3 equity emissions by 10 per cent from FY23
to 44.9 mt CO2-e, driven by lower gas sales and lower purchases from the
NEM partly offset by higher generation output at Eraring;
•
commenced construction of Stage 1 (460 MW / 2hr) of the Eraring
battery and made a final investment decision on a 300 MW / 2hr battery
at Mortlake;
•
acquired three renewable development properties, including the Yanco
Delta Wind Farm development project, which consists of the 1.5 GW wind
farm and 800 MWh battery developments in the South West REZ in NSW;
•
grew our Virtual Power Plant (VPP) grew to 1.4 GW across more than
392,000 connected services, up from 815 MW at the end of FY23; and
•
completed Front-End Engineering Design (FEED) was completed for the
Hunter Valley Hydrogen Hub, and we were awarded funding of $70 million
in funding from the Australian Government and $45 million from the NSW
Government; and short-listed under the Australian Government’s Hydrogen
Headstart Program.
Getting energy right for our customers
Our focus is on delivering great customer experiences and striving to provide
affordable, reliable and cleaner energy as we transition to a lower-carbon world.
During FY24, we:
•
provided around $50 million in support to residential and small business
customers in financial distress, and have provided more than $90 million in
support over the past three years;
•
achieved a Customer Happiness Index score of 69 per cent, up from 65 per
cent in FY23;
•
executed an agreement with the NSW Government to delay the retirement
of Eraring Power Station by two years, to support the state’s electricity
supply through the transition;
•
supported the domestic east coast gas market through the APLNG business;
•
continued to grow our e-mobility solutions, with 900 electric vehicles (EVs)
under management at 30 June 2024; and
•
grew our GreenPower electricity sales volumes by 25 per cent to 666 GWh,
driven by growth in large business customers.
Planet
Greenhouse gas emissions (equity basis,
mt CO2-e)
50.0
50.0
45.0
45.0
Scope 1
Scope 2
Scope 3
FY23
FY24
1.4 GW
VPP, up from 815 MW at
June 2023
Customers
Customer Happiness Index (%)
65
65
69
69
FY23
FY24
$50m
spent on supporting customers
in hardship
12
Annual Report 2024
Getting energy right for our communities
We seek to work responsibly and respectfully with our local communities.
We consult with our local communities throughout an asset's life cycle to
understand and manage the environmental, economic and social impacts of
our activities, and to maximise the benefits.
During FY24, we:
•
spent $428 million (16 per cent of our total spend) directly and indirectly
with regional suppliers, up from $421 million in FY23;
•
spent $21.6 million with Indigenous suppliers, down from $24.4 million
in FY23;
•
commenced engagement with key stakeholders of our proposed projects in
the New England and South West REZ, including local landholders, councils,
First Nations groups, and community organisations;
•
provided regular updates on the Eraring site transition and closure, including
the revised timeline, to key stakeholders such as the Eraring Community
Forum, government agencies, industry bodies and the local community;
•
committed more than $950k in community support from the $5 million
Eraring Community Investment Fund;
•
supported 8,700 hours of employee volunteering through the Origin Energy
Foundation. More than $3.8 million contributed to communities through the
Foundation in FY24, via grants, volunteering, our workplace giving program
and in-kind and other donations; and
•
matched ~$350,000 in employee charitable donations.
Our people
We are a purpose-led and values-driven business, aiming to create a workplace
where all our people are included, respected and safe at work.
During FY24, we:
•
recorded a TRIFR of 4.1, up from 3.8 in FY23. While the number of
recordable injuries sustained by our workforce rose compared to FY23,
the actual and potential severity of injuries decreased;
•
recorded four Tier 1 and four Tier 2 process safety incidents, up from a total
of 7 in FY23;
•
held our employee engagement score steady at 7.7 (out of 10);
•
continued to support our Eraring employees through the power station's
transition to retirement, with 96 per cent actively engaged in their Individual
Support Plans. We committed to extending the Eraring people transition
program to all employees who joined Eraring since the first closure
announcement in February 2022;
•
maintained 40 per cent female representation in three of our four leadership
cohorts, consistent with our commitment as a signatory of 40:40 Vision,
an investor-led initiative targeting gender balance in executive leadership
by 2030;
•
achieved 44.2 per cent of women in senior leadership roles,1 an extension of
our 40:40 Vision commitment; and
•
achieved gold status in the 2024 Australian Workplace Equality Index and
named as a standout performer in the Open For Business Investor Guide to
LGBTQ+ Inclusion, created by a coalition of global listed organisations.
Communities
Indigenous supplier spend,
direct and indirect ($m)
24.4
24.4
21.6
21.6
FY23
FY24
>$3.8M
Contributed to communities
through the Origin
Energy Foundation
People
Total Recordable Injury
Frequency Rate (TRIFR)
3.8
3.8
4.1
4.1
FY23
FY24
44.2%
Female Senior Leaders, down
from 46.0% in FY23
1
Three reporting levels below the CEO, including roles with base salaries exceeding approximately $225,000 per annum
13
Operating and Financial Review
Financial performance
Statutory Profit ($m)
1,055
1,055
1,397
1,397
FY23
FY24
Underlying Profit ($m)
747
747
1,183
1,183
FY23
FY24
Underlying EBITDA
3,107
3,107
3,528
3,528
FY23
FY24
Adjusted Free Cash Flow
(before major growth) ($m)
965
965
1,296
1,296
FY23
FY24
Adjusted Net Debt/Adjusted
Underlying EBITDA
1.0x
Down from 1.2x at 30 June 2023
Final Dividend
27.5 cps
100% franked
55 cps total FY24 dividend
(73% of FY24 Adjusted Free Cash Flow)
FY24 Underlying Profit increased by $436 million to $1,183 million, and Underlying EBITDA increased by $421 million to $3,528 million with
higher earnings from Energy Markets, Integrated Gas - Other, partially offset by lower earnings from APLNG and Octopus Energy.
Energy Markets’ electricity gross profit increased, reflecting the recovery of higher wholesale costs associated with current and prior periods
flowing into customer tariffs, and lower coal costs. Earnings from the natural gas business decreased with business and retail customer tariffs
repricing to reflect higher procurement costs, more than offset by the non-repeat of prior period trading gains and lower sales volumes.
Our retail business performed strongly with increased customer accounts, and continued growth in customers adopting services such as
Broadband and EVs, with Origin Loop, our VPP, growing to 1.4 GW under management.
APLNG continued to deliver strong cash flow, down on the prior period as global commodity prices moderated, with production slightly
improved resulting from effective well and field optimisation activities. In Integrated Gas - Other, Our commodity hedging and trading
activities generated a gain against a loss in the prior periods, primarily driven by a lower oil hedging loss, and increased LNG trading gain.
Octopus Energy continued its strong customer growth trajectory, however share of EBITDA decreased $185 million to $55 million. Lower
earnings from the UK Retail business reflected the non-repeat of the lagged recovery of higher wholesale prices in FY23, partially offset by
growth in customer accounts. Higher EBITDA from the Kraken licensing business was offset by negative contributions from the International
and Energy Services businesses as investment is made in scaling those businesses.
Adjusted Free Cash Flow was up $331 million to $1,296 million, driven primarily by improved earnings from Energy Markets, partially offset by
lower distributions from APLNG primarily reflecting lower commodity prices. Adjusted Net Debt to Adjusted Underlying EBITDA remained
largely flat at 1.0x. We expect this ratio to increase and return to the targeted range of 2.0-3.0x with planned capital investment.
We are continuing to invest in the energy transition and have committed to more than 1.5 GW of large-scale battery projects. We also
increased our investment in Octopus Energy to ~23 per cent and acquired the 1.5 GW Yanco Delta Wind Farm development project.
In June 2024, we updated our distribution policy to target an ordinary dividend payout in each financial year of a minimum of 50 per cent
of Adjusted Free Cash Flow per annum. The Board has determined to pay a dividend of 27.5 cents per share, fully franked, bringing total
distributions for the year to 55 cents per share, fully franked which amounts to 73 per cent of Adjusted Free Cash Flow.
14
Annual Report 2024
Energy Markets performance
Underlying EBITDA
$1,655M
Up $617M vs FY23
Operating cash flow
$1,917M
Up $1,870M vs FY23
Underlying ROCE2
10.4%
Up 7.2% vs FY23
Customer Happiness Index3
69%
Up 4% from June 2023
Origin Loop (VPP)
connected assets
1,385 MW
Up from 1,174 MW as at December 2023
4,657k
Customer accounts
Up 132k from June 2023
Energy Markets Underlying EBITDA4 increased by $617 million to $1,655 million, primarily reflecting earnings recovery following a period of
under recovery of wholesale costs in the electricity business. This resulted in a ROCE2 of 10.4 per cent, up 7.2 per cent2 from the prior period.
Operating cash flow increased significantly, up $1,870 million from FY23.
Electricity Gross Profit increased by $1,122 million to $1,654 million, driven by the recovery of higher wholesale costs associated with the
current and prior periods flowing into retail and business customer tariffs. Fuel costs decreased primarily due to lower coal prices, which
benefited in FY24 from the legislated coal price cap of $125/t. The coal price cap ended on 30 June 2024. An agreement was executed with
the NSW Government to delay the retirement of Eraring Power Station to August 2027.
Natural Gas Gross Profit decreased by $263 million to $680 million, with higher wholesale prices flowing into customer tariffs, more than offset
by non-repeat of JKM trading gains in the prior period, lower gas sales volumes and higher procurement costs.
Cost to serve increased by $214 million including $57 million increase in bad and doubtful debts due to higher bill sizes, and slower aged
debt collection driven by cost of living pressures, additional compliance measures and delay in reaching full system functionality in Kraken.
Additional regulatory and compliance activity and higher labour costs associated with temporary additional resources post migration to the
Kraken system also contributed. We continue to pursue further improvements to our cost to serve.
With high inflation and cost of living pressures, we remain committed to relieving impacts on customers where possible. We provided around
$50 million in support to our most vulnerable customers during FY24 and expect to spend around another $50 million in FY25. While we
strive to meet all our compliance obligations and self report breaches, we regret that we have failed to meet our regulatory obligations in
some instances. In FY24 the Essential Services Commission commenced proceedings against Origin in relation to failures to meet regulatory
requirements for some of our Victorian retail customers. On 1 July 2024, the Australian Energy Regulator commenced proceedings for
non-compliance with the National Energy Retail Rules.
Customer accounts grew by 132,000 driven by strong growth across Electricity, Gas, Broadband and Home Assist. Our Customer Happiness
Index3 measure continues to improve, up four per cent from FY23 to 69 per cent. Our Origin Zero business acquired a 20 per cent interest in
Climatech Zero, a fast-growing provider of energy management and decarbonisation solutions for large industrial companies.
Our generation fleet performed strongly during the year, with high levels of reliability. Output from Eraring rose by 2.1 TWh to 14.3 TWh,
supporting Government policy aiming to increase generation to help put downwards pressure on customer tariffs, while the gas peaking fleet
increased output and continued to play an important role supporting the grid and maintaining reliable supply for customers.
We acquired Yanco Delta Wind Farm development project, one of the largest and most advanced wind and storage projects in NSW, and
purchased renewable energy developer Walcha Energy. In addition to the Eraring and Mortlake battery projects underway, we approved
investment in the second stage of the Eraring battery and signed offtake agreement for two stages of the Supernode battery in Queensland,
which take our committed battery projects to 1.5 GW.
2
24-month rolling average. FY23 Return on Capital Employed (ROCE) has been restated to exclude the impact of FY22 $2.2 billion impairment of goodwill.
3
Customer Happiness Index (CHI) is a measure of customer satisfaction and is measured as the average for the 12 months.
4
Energy Markets segment excludes Octopus Energy.
15
Operating and Financial Review
Integrated Gas performance
Underlying EBITDA
$1,951M
Up $32m or 2% vs FY23
Underlying EBIT up $118m
Cash distributions
from APLNG
$1,384M
Down $399m or 22% vs FY23
20.6%
Underlying ROCE5
Up from 16.2%
in FY23
APLNG
production (100%)
694PJ
Up 3% vs FY23
Average realised LNG price
US$11.85/
MMBtu
Down 17% vs FY23
Down 14% in A$ terms at $17.14/GJ
Capex and opex6/GJ
$4.1/GJ
6% increase vs FY23
Integrated Gas' Underlying EBITDA increased by $32 million to $1,951 million, primarily due to hedging gains and higher production partially
offset by lower commodity prices. APLNG cash distributions to Origin for FY24 amounted to $1,384 million.
APLNG production increased by three per cent in FY24 reflecting strong field performance from ongoing effective well and field optimisation
activities, fewer scheduled maintenance disruptions and benefit of reduced workover backlog. APLNG delivered 15 spot LNG cargoes in
FY24, up from seven cargoes in FY23, reflecting improved performance and movement in LNG sales mix.
Production was adversely impacted due to an unplanned turndown of approximately 9 PJ following an LNG vessel power outage at the Curtis
Island LNG facility in November 2023. Production successfully returned to pre-event levels by mid-December 2023.
APLNG continued to be a significant contributor to the east coast market. The average realised domestic gas price decreased by eight per
cent to $7.83/GJ, primarily reflecting lower market linked short-term contract prices. Average prices offered to domestic customers remained
below those paid by international customers.
Capital and operating expenditure6 increased by $0.2/GJ to $4.1/GJ predominately driven by higher capital expenditure due to an increase in
non-operated development activities, an increase in operated well delivery and exploration activities. Operating expenditure increased mainly
due to higher power costs. These higher costs are partially offset by the benefit of higher production.
APLNG proven plus probable (2P) reserves increased 83 PJ before production in FY24, driven by a 189 PJ increase in operated 2P reserves,
offset by a 105 PJ revision in non-operated 2P reserves. After production, 2P reserves decreased by 610 PJ.7
Other highlights across Integrated Gas during FY24 included:
•
Cooper-Eromanga Basin – Origin executed an agreement in June 2023 to transfer its 75 per cent interest and operatorship of five permits
back to Bridgeport. The transfer is pending approval from the Queensland Government.
•
Hunter Valley Hydrogen Hub – Origin has completed FEED in FY24. Strong financial and development support has been received from
the Australian and NSW Governments, with the Hunter Valley Hydrogen Hub project is currently being assessed under the Australian
Government's Hydrogen Headstart funding program.
•
FY24 commodity hedging and trading positions realised a $70 million net gain, compared to a $235 million loss in FY23, refer to section
5.2.2 for more information.
5
24-month rolling average.
6
Opex excludes purchases and one-off write off, and reflects royalties at the breakeven oil price.
7
Some of APLNG’s CSG reserves and resources are subject to reversionary rights and ongoing interest in favour of Tri Star. Refer to Section 7 for disclosure relating to Tri-Star
litigation associated with some of these CSG reserves.
16
Annual Report 2024
2 Our strategy
Our strategy
Our strategic
pillars
Our ambition
ENABLE customers
to decarbonise
GROW our portfolio of
renewables and cleaner energy
REDUCE emissions of
our existing operations
Unrivalled customer
solutions
Accelerate renewable
and cleaner energy
Deliver reliable energy
through the transition
Our
decarbonisation
priorities
To lead the energy transition through cleaner energy and customer solutions
Our purpose
Getting energy right for our customers communities and planet
During the year we made significant progress towards executing our strategy. We:
•
progressed the transformation of our retail business with the migration of all of our mass market electricity and natural gas customer
accounts to the Kraken platform;
•
increased our shareholding in Octopus from 20 per cent to ~23 per cent;
•
acquired a number of renewable energy projects including the 1.5 GW Yanco Delta Wind Farm development project;
•
committed to 1.5 GW battery projects (including stage 2 of Supernode and Eraring stage 2 battery in July 2024), continuing construction
of the first stage of our Eraring battery project, and commencing construction on the Mortlake battery. We also signed battery tolling
agreements with Supernode in Queensland, and progressed feasibility on battery options in South Australia;
•
grew our Virtual Power Plant by ~600 MW to 1,385 MW across 392,000 connected assets
•
completed FEED for a Hunter Valley Hydrogen Hub, a green hydrogen project with a final investment decision targeted for FY25;
•
continued to deliver reliable energy to our customers with an agreement with the NSW Government to extend Eraring operations to
August 2027;
•
grew our customer accounts by 132,000, including 56,000 broadband accounts; and
•
grew our e-mobility business to 900 vehicles under management.
Our business drivers
As a leading integrated energy company, Origin’s earnings drivers are spread across the energy value chain.
Our electricity margin is driven by outperforming the market cost of energy through our supply portfolio (including our power stations and
supply contracts). Our portfolio of coal and gas generation plants, renewable energy Power Purchase Agreements (PPAs) and market supply
and hedge contracts provides us with the flexibility to manage energy procurement costs. As we sell more energy than we generate, we have
the ability to build or contract renewable energy and storage.
In natural gas, Origin’s wholesale margin is driven by a strong gas supply portfolio, with pipeline and storage flexibility enabling us to direct
gas to where it is most needed. A large portion of our supply is under long-term contracts that are either fixed-price8 or linked to oil or LNG
spot prices. Some of our contracts reprice to market over time.
Our profitability in energy retailing is driven by managing retail margins through matching retail tariffs with energy procurement costs
combined with efficient operations, innovative products, and the ability to attract and retain customers by providing a superior customer
experience. We implemented the Kraken retail system to further lower our cost base and enhance our customer experiences. We aim to
enhance customer lifetime value through providing adjacent products such as broadband, electric vehicles and batteries as well as through
the orchestration of devices through our leading in-house Virtual Power Plant and digital and data platform.
We own ~23 per cent of Octopus Energy, a UK-based fast-growing energy technology company. Octopus owns the Kraken technology
platform which has significant global licensing potential. Octopus is the second largest energy retailer by customer accounts in the UK.
Origin is the upstream operator of and has a 27.5 per cent interest in APLNG, Australia’s largest CSG to LNG project. APLNG is a significant
supplier to both domestic gas and international LNG markets, with the majority of volume contracted until around 2035. Profitability is
underpinned by maintaining a low capital and operating cost base relative to revenue, much of which is linked to oil prices. In FY24, around
76 per cent of APLNG gas volume was sold as LNG (of which 89 per cent was under long-term oil-linked contracts).
8
Subject to CPI adjustments.
17
Operating and Financial Review
Our strategic pillars
We have three strategic pillars:
Unrivalled customer solutions
We have a leading retail business with 4.7 million customer accounts, delivering a superior customer
experience with churn lower than our Tier 1 competitors.
Our strategy to increase the value of our retail business and enhance customer experience involves:
•
using our new Kraken based operating model to deliver a superior customer experience, lower costs,
a leaner operation and lower churn;
•
increasing the breadth of products offered including broadband, solar, batteries, connected solutions
and e-mobility; and
•
using our strong data analytics capability to enable personalised and segmented offers and
experiences for our customers.
For our larger business customers, we are working to simplify the energy transition, providing a holistic
set of energy transition services through Origin Zero. These solutions can include elements such as
renewable energy, demand response, solar, batteries, carbon offsets, energy management and EV
fleet management.
Through our Octopus Energy investment, we have access to an industry-leading retail platform to deliver
the lowest cost, market-leading customer happiness, and exposure to Octopus’s global growth.
Accelerate renewables and cleaner energy
We will invest in cleaner energy positions to support our customers’ demand for energy and
decarbonisation solutions. We will increase our renewable energy supply through new investments,
partnerships, and projects, targeting multi-GW renewable growth opportunities through a staged and
disciplined investment and/or contracting approach.
In addition to our significant thermal peaking generation portfolio, we will invest in growing our 'firming
capacity' such as batteries and our VPP to support the growth of renewables during periods of peak
demand and lower renewable generation.
We have developed a proprietary VPP platform to connect and use artificial intelligence (AI) to
orchestrate distributed assets. We are growing our battery storage portfolio and have committed to
approximately 1.5 GW of owned and tolled battery projects so far.
We are investigating opportunities to invest in cleaner fuels for harder-to-abate sectors, including
domestic and export green hydrogen projects, subject to the results of feasibility studies, and a final
investment decision.
LPG
Deliver reliable energy through the transition
We have a valuable portfolio of assets that play a critical role in providing customers with reliable and
affordable energy as we transition to a low-carbon future. We believe gas will remain a key part of the
energy mix during the transition.
We have a 27.5 per cent interest in APLNG, which continues be a low cost supplier of gas, for domestic
and export customers.
Our coal-fired Eraring Power Station continues to play a valuable role in supporting the reliability and
security of the electricity market. We have agreed to extend the Eraring closure date to 2027 and we are
looking to replace it with a renewables and storage portfolio as well as market purchase opportunities.
Our existing thermal peaking generation will continue to play a critical role in providing capacity and
firming as coal generators such as Eraring retire and are replaced by intermittent renewables.
We have a leading domestic wholesale gas position with the ability to transport gas across the east coast
to support our gas fired generation fleet as well as our residential, business and wholesale customers.
18
Annual Report 2024
3 Guidance
The following guidance is based on current market conditions and the regulatory environment. Ongoing volatility in market conditions is likely
and may adversely impact operations.
Energy Markets
FY25 EBITDA is expected to be $1,100 – $1,400 million. Electricity gross profit is expected to decrease, with regulated tariffs reflecting lower
wholesale costs and retail cost allowance, as well as higher coal costs as the legislated price cap ended on 30 June 2024, partially offset by
growth in customer accounts and continued focus on value management.
The wholesale cost component of FY25 tariffs declined by ~$20/MWh on average compared to FY24, which applies to Origin's mass market
load, leading to a reduction in EBITDA of over $300 million. Forecast coal requirements of 5 - 6 million tonnes for FY25 have been contracted
or hedged, and are expected to be ~$30/t higher than FY24.
Gas gross profit is expected to moderate due to lower market prices.
Cost to serve is expected to modestly improve, with lower bad and doubtful debts and labour spend, partly offset by the commencement
of Kraken license fees and additional investment in brand and digital. We continue to pursue further improvements to our cost to serve and
based on current market conditions we are targeting a $100 - $150 million reduction from FY24 to FY26.
Integrated Gas
We estimate production in FY25 of 685 – 710 PJ (APLNG 100 per cent), reflecting stable operations. We estimate total APLNG capex and
opex9 of $2.8 – $3.0 billion and $3.9 – $4.3/GJ, reflecting high power costs and higher non-operated spend in FY25. We hold an ambition
to maintain cost of supply below $4/GJ10 on average to FY28.
At 2 August 2024, of Origin's share of APLNG FY25 exposures, approximately 41 per cent of JCC and 28 per cent of JKM has been priced
(based on LNG contract lags) at approximately US$87/bbl and US$12/MMBtu respectively before any hedging. Based on forward market
prices, we estimate losses in FY25 on oil, gas and FX hedging of $95 million.
We estimate a gain on LNG trading of $400 – $450 million in FY25, and $50 - $150 million in FY26. This outlook remains subject to market
prices on unhedged volumes, operational performance and delivery risk of physical cargoes, and shipping and regasification costs. See
Section 5.2.2 for details of Integrated Gas oil, gas and FX hedging and LNG trading.
Octopus Energy
FY25 EBITDA is expected to be higher at $100 – 200 million, partly due to lower REGO prices following higher prices in FY24. UK Retail
and Kraken licensing are expected to continue to benefit from customer growth and migration of customers to the platform, partly offset by
investment in scaling International Retail and Energy Services businesses.
9
Opex excludes purchases and reflects royalties at the breakeven oil price
10 Capex & Opex spend (real FY24) per unit of production on average FY24 to FY28. Includes royalties at breakeven prices, excludes purchases, tax, project finance and
depreciation and amortisation. Based on recent wholesale electricity forward curves
19
Operating and Financial Review
4 Financial update
4.1 Reconciliation from Statutory to Underlying Profit
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Statutory Profit/(Loss)
1,397
1,055
342
32
Items Excluded from Underlying Profit (post-tax)
n/a
Increase/(decrease) in fair value and foreign exchange movements
(145)
74
(219)
n/a
Oil and gas
(120)
261
(381)
n/a
Electricity
(60)
(79)
19
(24)
FX and interest rate
-
-
-
n/a
Other financial instruments
34
(80)
114
n/a
FX gain/(loss) on foreign-denominated financing
1
(28)
29
n/a
Impairment, disposals, business restructuring and other
359
234
125
53
Total Items Excluded from Underlying Profit (post-tax)
214
308
(94)
(31)
Underlying Profit
1,183
747
436
58
Fair value and foreign exchange movements reflect non-cash or non-recurring fair value gains/(losses) associated with commodity hedging,
interest rate swaps and other financial instruments. These amounts are excluded from Underlying Profit to remove the volatility caused by
timing mismatches in valuing financial instruments and the underlying transactions they relate to.
•
Oil and gas derivatives manage exposure to fluctuations in the underlying commodity price to which Origin is exposed through its gas
portfolio and indirectly through Origin’s investment in APLNG. See Section 5.2.2 for details of Origin’s APLNG-related oil hedging.
•
Electricity derivatives, including swaps, options, forward purchase contracts, structured products and offtake agreements are used
to manage fluctuations in wholesale electricity and environmental certificate prices in respect of electricity purchased to meet
customer demand.
•
Foreign exchange and interest rate derivatives manage exposures associated with the debt portfolio and foreign currency denominated
transactions. A portion of debt is euro-denominated and cross-currency interest rate swaps hedge that debt to AUD.
•
Other financial instruments reflects non-derivative financial assets and liabilities held by Origin.
•
Foreign exchange on foreign-denominated financing reflects currency fluctuations on unhedged USD debt. Debt is maintained in USD to
offset the USD-denominated investment in APLNG, which delivers USD cash distributions.
Impairment, disposals, business restructuring and other are either non-cash or non-recurring items and are excluded from Underlying Profit
to better reflect the underlying performance of the business. They include the following:
FY24
($m)
Impairments
461
Business restructuring
(132)
Disposals
6
Other
24
Deferred tax liability (recognition)/utilisation - APLNG
(85)
LGC net shortfall refund/(charge)
114
Onerous contracts
(8)
Other provision
3
Impairment, disposals, business restructuring and other
359
•
Impairments: $461 million net reversal of impairment, reflecting $477 million reversal of prior impairment in Origin's equity accounted
investment in APLNG. The recent proposed scheme transaction provided an observable market price for the investment in APLNG,
which supported the full reversal of the prior impairment recorded, partly offset by $16 million impairment of the Carisbrook solar farm
development project, reflecting increased costs for the project meaning that it is considered unlikely that it can earn a suitable return
on investment;
•
Business restructuring: $132 million post-tax transaction, transformation and restructuring costs including costs relating to the Proposed
Acquisition of Origin ($60 million), transformation costs relating to the stabilisation phase of the Kraken implementation project
($39 million), and transaction costs relating to Octopus Energy's acquisition of Shell Energy in December 2023 ($11 million);
•
Disposals: $6 million disposals, reflecting the post-tax gain on sale of LPG Pacific ($8 million), partly offset by the loss on disposal following
the transfer of exploration permits in the Canning Basin to Buru Energy ($2 million);
•
Deferred tax liability - APLNG: $85 million non-cash recognition of deferred tax liability reflecting anticipated future dividends to be paid
out of APLNG's retained earnings;
20
Annual Report 2024
•
LGC net shortfall: $114 million net refund received relating to a decision in prior periods to defer the surrender of a portion of Origin’s
large-scale generation certificates. The first surrender was submitted during the year, with a total refund of $160 million received. The cost
of those certificates surrendered was $46 million;
•
Onerous contracts:
–
$8 million onerous provision relating to Octopus Energy's EV contract arrangements; and
–
A $43 million non-cash benefit reported at HY24 releasing the LNG onerous contract provision relating to the termination of the ENN
LNG agreement has been offset by a $43 million loss recognised in relation to the negative net present value of the Cameron contract,
reflecting unfavourable movements in JKM relative to Henry Hub pricing. These two items cancel out for FY24 reporting. The long-term
LNG price exposures for the Cameron contract are partly hedged by swaps with pricing linked to various oil and gas indices. These
swaps are recognised as derivatives and are measured and reported separately from the onerous contract provision.
The nature of Items Excluded from Underlying Profit set out in the above table have been reviewed by our auditor for consistency with the
description in Note A1 of the Financial Statements.
4.2 Underlying Profit
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Energy Markets
1,655
1,038
617
59
Share of Octopus Energy
55
240
(185)
(77)
Integrated Gas - Share of APLNG
1,936
2,246
(310)
(14)
Integrated Gas - Other
15
(327)
342
n/a
Corporate
(133)
(90)
(43)
48
Underlying EBITDA
3,528
3,107
421
14
Underlying depreciation and amortisation (D&A)
(521)
(527)
6
(1)
Underlying share of ITDA of equity accounted investees
(1,066)
(1,163)
97
(8)
Underlying EBIT
1,941
1,417
524
37
Underlying interest income
46
51
(5)
(10)
Underlying interest expense
(169)
(185)
16
(9)
Underlying profit before income tax and non-controlling interests
1,818
1,283
535
42
Underlying income tax expense
(635)
(533)
(102)
19
Non-controlling interests’ share of Underlying Profit
-
(3)
3
(100)
Underlying Profit
1,183
747
436
58
Underlying EPS
68.7cps
43.4cps
25.3cps
58
Underlying ROCE - rolling 24 month
15.2%
9.6%
5.6%
See Sections 5.1, 5.2 and 5.3 respectively for Energy Markets, Integrated Gas, and Share of Octopus Energy analysis.
Corporate costs increased by $43 million, primarily reflecting a non-cash increase in Legacy Sites remediation provisions ($35 million)
attributable to higher material, contractor and consultant rates and increased scope for remediation activity, as well as higher employee costs
partly offset by lower IT and project spend.
Underlying share of ITDA decreased $97 million, driven by lower ITDA from APLNG ($83 million), and lower ITDA from Origin’s equity share
of Octopus Energy ($13 million). Refer to Sections 5.2.1 and 5.3 for further details.
Underlying income tax expense increased $102 million, reflecting increased earnings from Energy Markets partly offset by lower dividends
from APLNG.
21
Operating and Financial Review
4.3 Cash flows
Operating cash flow
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Underlying EBITDA
3,528
3,107
421
14
Underlying equity accounted share of EBITDA (non-cash)
(1,993)
(2,487)
494
(20)
Other non-cash items in Underlying EBITDA
221
183
38
21
Underlying EBITDA adjusted for non cash items
1,756
803
953
119
Change in working capital
(15)
(771)
756
(98)
Energy Markets
45
(671)
716
n/a
Integrated Gas - excluding APLNG
(41)
(113)
72
(64)
Corporate
(19)
13
(32)
n/a
Futures exchange collateral
(52)
(290)
238
(82)
Other
53
(182)
235
n/a
Tax paid
(628)
(193)
(435)
225
Cash flow from operating activities
1,114
(633)
1,747
n/a
Operating cash flow includes the cash flow from Integrated Gas hedging activities and the tax associated with unfranked dividends from
APLNG, however it excludes those dividends received from APLNG. Distributions from APLNG are included in investing activities, and
decreased $399 million from FY23.
Operating cash flow increased $1,747 million, reflecting:
•
higher earnings from Energy Markets ($617 million);
•
higher earnings from Integrated Gas - Other ($342 million);
•
favourable working capital cash flows ($756 million) reflecting an outflow of $15 million in FY24, compared with an outflow of $771 million
in the prior period. Current year cash outflow was driven by:
–
Energy Markets working capital balances decreased by $45 million primarily driven by:
–
retail net debtors (+$232 million) reflecting ~$600 million received in advance from the Queensland Government relating to the
FY25 Energy Bill Relief, partly offset by higher bills (volumes and rates) and as well as slower collections from residential and small
business customers due to cost of living pressures, additional compliance measures and delay in full system functionality due to
Kraken stabilisation.
–
wholesale net creditors (+$63 million) due to higher June 2024 electricity volumes and prices;
–
increased coal stockpile (-$46 million); and
–
green certificate inventory (-$232 million) primarily driven by opportunistic purchases of green certificates for future obligations
beyond FY24;
–
Integrated Gas working capital balances increased by $41 million during the period primarily reflecting the cash settlement timing of
LNG trading activities; and
–
Futures collateral outflow of $52 million reflecting cash collateral paid associated with the mark to market valuation of gas and electricity
hedge contracts.
•
Other ($53 million), primarily reflects a net refund on the LGC shortfall strategy ($114 million) and non-cash increase in provisions included
in Underlying EBITDA ($108 million), partly offset by transaction, transformation and restructuring costs excluded from Underlying Profit
(-$173 million); and
•
partly offset by increased income tax paid ($435 million) reflecting higher earnings and partially franked dividends received from APLNG
Underlying equity accounted share of EBITDA (non-cash) reflects share of APLNG ($1,936 million) and share of Octopus Energy ($55 million).
Other non-cash expenses include provisions for bad and doubtful debts ($198 million) and share-based remuneration ($22 million).
22
Annual Report 2024
Investing cash flow
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Capital expenditure
(653)
(475)
(178)
37
Government grants received
6
-
6
n/a
Distribution from APLNG
1,384
1,783
(399)
(22)
Interest received from other parties
33
43
(10)
(23)
Investments/acquisitions
(844)
(205)
(639)
312
Disposals
58
72
(14)
(20)
Cash flow from investing activities
(16)
1,218
(1,234)
n/a
FY24 capital expenditure was $653 million, an increase of $178 million, including spend at Eraring on maintenance activities, progress on the
Eraring and Mortlake Batteries, and pre-FID projects. Capital expenditure comprises:
•
generation maintenance and sustaining capital ($252 million), primarily at Eraring Power Station ($167 million) due to the Unit 2
maintenance outage ($68 million), costs associated with the Ash Dam ($54 million) and other maintenance activities; as well as Mortlake
Power Station major inspection ($29 million) and Darling Downs Power Station outage ($16 million);
•
other sustaining capital ($71 million) including LPG ($32 million), CES ($10 million); and
•
productivity/growth ($330 million) including Eraring Battery ($169 million), Northern Tablelands land purchase ($39 million), Mortlake
Battery ($27 million), Origin Zero Electric Vehicles initiatives ($25 million), CES ($13 million).
Government grants represent amounts received from the Australian Government associated with funding to develop the proposed Hunter
Valley Hydrogen Hub (HVHH). The grant funding is conditional and contingent upon the Group making a project Final Investment Decision
for the HVHH project and complying with the reporting requirements and conditions of the grant agreement.
Cash distributions from APLNG amounted to $1,384 million including the equivalent of $132 million fully franked dividends, down from
$1,783 million unfranked dividends in FY23.
Investments include additional investment in Octopus Energy to increase our interest to ~23 per cent ($540 million), retail aggregator
acquisitions ($136 million), and upfront payment for the acquisition of the Yanco Delta Wind Farm development project ($125 million), along
with early stage renewable projects, investment in the Golden Beach Energy Storage ($20 million) and acquisition of a 20 per cent interest
in Climatech Zero.
Disposals reflect the net proceeds from the sale of the LPG Pacific business.
Financing cash flow
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Net proceeds/(repayment) of debt
173
(215)
388
n/a
Operator cash call movements
(9)
66
(75)
n/a
AEMO cash deposits
-
290
(290)
(100)
On-market purchase of shares
(55)
(4)
(51)
n/a
Settlement of foreign currency contracts
-
(48)
48
(100)
Interest and transaction costs
(170)
(163)
(7)
4
Payment of lease liabilities
(73)
(71)
(2)
3
Dividends paid
(819)
(576)
(243)
42
Total cash flow from financing activities
(953)
(721)
(232)
32
Effect of exchange rate changes on cash
(3)
(1)
(2)
200
Operator cash call movements represent the movement in funds held and other balances relating to Origin's role as the upstream operator
of APLNG.
Australian Energy Market Operator (AEMO) cash deposits relate to cash security deposits placed with AEMO to support Origin's energy
purchases from national electricity and gas markets. The obligation is typically satisfied by bank guarantees; however the obligation was
partially met with cash in FY22, and subsequently refunded to Origin in FY23.
On-market purchase of shares represents the purchase of shares connected with employee share remuneration schemes. The employee
share plan terminated in March 2023 due to the Proposed Acquisition of Origin and was reinstated following the scheme meeting in
December 2023.
Settlement of foreign currency contracts represents the partial closure of contracts executed in prior periods to monetise the value in certain
cross-currency interest rate swap contracts. These foreign currency contracts were settled in full during FY23.
23
Operating and Financial Review
Free Cash Flow
Free Cash Flow represents cash flow available to pay dividends, repay debt, invest in major growth projects or return surplus cash to
shareholders. This is prepared on the basis of equity accounting of APLNG and Octopus Energy. Specific items may be excluded from Free
Cash Flow, to better represent cashflows from the underlying business and is reported as Adjusted Free Cash Flow.
Major growth spend ($916 million) comprising additional investment in Octopus Energy ($540 million), investment in the Eraring
($169 million) and Mortlake ($27 million) batteries, upfront payment for the acquisition of the Yanco Delta Wind Farm development
project ($125 million) and costs associated with the stabilisation phase of the Kraken implementation ($55 million) has been excluded from
FY24 Adjusted Free Cash Flow.
In addition, funds received in advance from the Queensland Government of ~$600 million associated with the FY25 bill relief, have been
excluded from FY24 Adjusted Free Cash Flow as these funds are associated with cash flows to be reported in FY25.
Energy Markets
Share of
Octopus Energy
Integrated Gas
- Share
of APLNG
Integrated
Gas - Other
Corporate
Total
($m)
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
Underlying EBITDA
1,655
1,038
55
240
1,936
2,246
15
(327)
(133)
(90)
3,528
3,107
Non-cash items
204
133
(55)
(240)
(1,936)
(2,246)
3
49
12
-
(1,772)
(2,304)
Change in working capital
45
(671)
-
-
-
-
(41)
(113)
(19)
13
(15)
(771)
Futures exchange collateral
(52)
(290)
-
-
-
-
-
-
-
-
(52)
(290)
Other
65
(162)
-
-
-
-
(1)
-
(11)
(20)
53
(182)
Tax paid
-
-
-
-
-
-
-
-
(628)
(193)
(628)
(193)
Operating cash flow
1,917
48
-
-
-
-
(24)
(391)
(779)
(290)
1,114
(633)
Capital expenditure
(647)
(454)
-
-
-
-
(4)
(19)
(2)
(2)
(653)
(475)
Government grants received
-
-
-
-
-
-
6
-
-
-
6
-
Cash distribution from APLNG
-
-
-
-
-
-
1,384
1,783
-
-
1,384
1,783
(Acquisitions)/disposals
(246)
(29)
(540)
(173)
-
-
-
69
-
-
(786)
(133)
Interest received
-
-
-
-
-
-
-
-
33
43
33
43
Investing cash flow
(893)
(483)
(540)
(173)
-
-
1,386
1,833
31
41
(16)
1,218
Interest and transaction costs
-
-
-
-
-
-
-
-
(170)
(163)
(170)
(163)
Free Cash Flow
1,024
(435)
(540)
(173)
-
-
1,362
1,442
(918)
(412)
928
422
Major growth spend
376
80
540
173
-
-
-
-
-
-
916
253
Queensland Government
funds received in advance
(600)
-
-
-
-
-
-
-
-
-
(600)
-
Futures exchange collateral
52
290
-
-
-
-
-
-
-
-
52
290
Adjusted Free Cash Flow
852
(65)
-
-
-
-
1,362
1,442
(918)
(412)
1,296
965
24
Annual Report 2024
4.4 Capital management
During FY24, the following capital management initiatives were completed:
•
extended the tenor of A$1,572 million bank facilities from FY25 to FY28/FY29, and increased facility capacity by A$173 million to
A$1,745 million;
•
extended the tenor of A$300 million bank guarantee facilities from FY25 to FY27, and increased facility capacity by A$50 million to
A$350 million;
•
extended the tenor of US$200 million bank guarantee facilities from FY25 to FY28.
•
entered a new A$300 million Asian Term Loan maturing in FY31; and
•
repaid US$85 million (A$127 million) USPP with a 5.0 per cent fixed interest rate.
Adjusted Net Debt
Movements in Adjusted Net Debt ($m)
2,877
2,877
(1,114)
(1,114)
(1,384)
(1,384)
653
653
780
780
137
137
819
819
65
65
2,833
2,833
30 June 2023
Operating cash
flow
Net cash from
APLNG
Capex
Net acquisitions /
disposals / grants
Net interest
payments
Dividend
FX/Other
30 June 2024
Adjusted Net Debt decreased $44 million, reflecting positive operating cash flow and distributions received from APLNG, largely offset by
capex and investments, and dividends paid to shareholders.
Origin aims to maintain an Adjusted Net Debt/Adjusted Underlying EBITDA ratio of 2.0 - 3.0x and a gearing11 target of 20 per cent to 30 per
cent. At 30 June 2024, these ratios were 1.0x and 23 per cent respectively.
We expect the Adjusted Net Debt/Adjusted Underlying EBITDA to increase and return to the lower end of the target range of 2.0-3.0x with
planned capital investment.
Our long-term credit profile is Baa2 (stable) from Moody’s.
11
Gearing is Adjusted Net Debt divided by Adjusted Net Debt plus Equity.
25
Operating and Financial Review
Debt portfolio management
Average term to maturity increased from 3.6 years at 30 June 2023
to 3.8 years at 30 June 2024. The rolling 12-month average interest
rate on drawn debt remained stable between FY23 and FY24 at 5.0
per cent.
As at 30 June 2024, Origin held $0.5 billion12in cash and $2.9 billion
in committed undrawn debt facilities. This liquidity position of
$3.4 billion is held to meet medium-term debt maturities and capital
requirements as part of Origin's energy transition, and to maintain
a sufficient liquidity buffer.
APLNG funding
APLNG partially funded construction via US$8.5 billion (100 per cent APLNG) in project finance facilities executed in FY12. These facilities
were partially refinanced in FY19. The outstanding balance at 30 June 2024 was US$4,313 million (A$6,512 million), net of unamortised debt
fees of US$27 million (A$41 million). APLNG’s average interest rate associated with its project finance debt portfolio for FY24 was 4.7 per cent.
Gearing13 in APLNG was 19 per cent as at 30 June 2024, down from 20 per cent at 30 June 2023.
APLNG project finance debt amortisation profile
Closing balance as at 30 June
(US$m)
2024
2025
2026
2027
2028
2029
2030
Bank loan (variable)
1,153
871
587
265
-
-
-
US Exim
1,247
965
679
382
162
-
-
USPP
1,940
1,887
1,787
1,690
1,437
930
297
Total
4,340
3,722
3,052
2,337
1,599
930
297
4.5 Shareholder returns
The Board has determined a fully franked final dividend of 27.5 cents per share. This brings Origin’s total distributions to shareholders for
FY24 to 55 cents per share, representing 73 per cent of Adjusted Free Cash Flow. The final dividend will be paid on 27 September 2024 to
shareholders registered as at 6 September 2024.
Origin will seek to deliver sustainable shareholder returns through the business cycle and will target an ordinary dividend payout in each
financial year of a minimum of 50 per cent of Adjusted Free Cash Flow per annum. Adjusted Free Cash Flow is defined as cash from operating
activities and investing activities (excluding major growth projects), less interest paid.
Excess cash flow after ordinary dividends will be applied to maintaining a strong capital structure, value accretive organic growth and
acquisition opportunities and/or additional shareholder distributions. The Company is expected to generate significant franking credits over
the foreseeable future, and any additional shareholder distributions are expected to be in the form of fully franked dividends.
The Board maintains discretion to adjust shareholder distributions based on economic and business conditions.
Debt maturity profile
- excluding lease liabilities (A$bn)
Capital Markets
Debt & Term Loan
Loans and Bank
Guarantees - Drawn
Loans and Bank
Guarantees -
Undrawn
FY25
FY26
FY27
FY28
FY29
FY30
FY31
FY32
FY33 FY34+
0
0.5
1.0
1.5
2.0
2.5
12
Excludes $76 million cash held on behalf of APLNG as upstream operator.
13
Gearing is defined as project finance debt less cash, divided by project finance debt less cash plus equity.
26
Annual Report 2024
5 Review of segment operations
5.1 Energy Markets
Fuel Supply
•
•
•
Gas
Coal
LPG
Transportation
• Flexible contracted
gas transport
arrangements
Generation
•
•
•
1 black coal generator
Australia’s largest
gas-fired fleet
Growing renewables
and storage, both owned
and contracted
•
•
•
Retail (consumer and SME)
Business (commercial
and industrial)
Wholesale
Networks
• Regulated
Customers
Origin’s Energy Markets business comprises Australia’s largest energy retail businesses by customer accounts, Australia’s largest fleet of
gas-fired peaking power stations supported by a substantial contracted fuel position, a growing supply of owned and contracted renewables
and storage, and Australia’s largest power station, the black coal fired Eraring Power Station.
The business reports on an integrated portfolio basis. Electricity and Natural Gas Gross Profit and cost to serve are reported separately, as are
the EBITDA of the LPG, Solar and Energy Services and Future Energy divisions.
5.1.1 Financial summary
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Electricity Gross Profit1
1,654
532
1,122
211
Natural Gas Gross Profit
680
943
(263)
(28)
Electricity and Natural Gas cost to serve1
(748)
(534)
(214)
40
LPG EBITDA2
69
96
(28)
(29)
Solar and Energy Services EBITDA
52
55
(3)
(5)
Future Energy EBITDA
(51)
(54)
3
(5)
Underlying EBITDA
1,655
1,038
617
59
Underlying EBIT
1,151
534
617
115
1
Commission costs have been reclassified from Cost to Serve to Electricity Gross Profit from FY24. FY23 has been restated for comparison purpose ($42 million).
2 Reflects the divestment of the LPG Pacific business completed during the September 2023 quarter.
Movements in Underlying EBITDA ($m)
1,655
(320)
(63)
(129)
(214)
(28)
940
258
(105)
28
250
FY23
Customer tariffs
Fuel costs
Procurement costs
Volumes
Customer tariffs
Procurement
costs
JKM and oil price
movements
Volumes
Cost to serve
S&ES, LPG, Future
Energy
FY24
Electricity +$1,121 million
Gas -$263 million
1,038
27
Operating and Financial Review
5.1.2 Electricity
Volume summary
Volumes sold
(TWh)
FY24
FY23
Change
(TWh)
Change
(%)
Retail
Business
Total
Retail
Business
Total
New South Wales1
7.3
7.8
15.1
7.2
7.9
15.2
(0.1)
(0.5)
Queensland
4.4
3.8
8.2
4.0
4.3
8.4
(0.1)
(1.7)
Victoria
3.2
5.1
8.3
3.0
5.2
8.2
0.1
1.8
South Australia
1.4
2.8
4.2
1.3
2.8
4.2
0.1
1.2
Total volumes sold
16.3
19.5
35.8
15.6
20.2
35.8
(0.0)
(0.1)
1
Australian Capital Territory customers are included in New South Wales.
Gross Profit summary
FY24
FY23
Change
(%)
Change
($/MWh)
$m
$/MWh
$m
$/MWh
Revenue
8,866
247.5
7,755
216.3
14.3
31.2
Retail (residential/SME)
5,603
343.3
4,391
281.4
27.6
62.0
Business
3,262
167.3
3,365
166.2
(3.0)
1.1
Cost of goods sold
(7,212)
(201.3)
(7,224)
(201.5)
0.2
0.2
Network and other costs1
(3,360)
(93.8)
(3,200)
(89.3)
(5.0)
(4.5)
Energy procurement costs
(3,852)
(107.5)
(4,024)
(112.2)
4.3
4.7
Gross Profit
1,654
46.2
532
14.8
211.0
31.3
Gross margin %
18.7%
6.9%
172.0
1
Commission costs have been reclassified from Cost to Serve to Electricity Gross Profit from FY24. FY23 has been restated for comparison purpose ($42 million).
Electricity Gross Profit increased by $1,122 million to $1,654 million:
•
$940 million primarily relating to higher wholesale prices flowing
into retail and business customer tariffs, reflecting the recovery of
higher costs associated with the current and prior periods;
•
$258 million due to lower generation fuel costs. Unit fuel costs
decreased from $87.8/MWh to $73.4/MWh. Eraring coal cost
benefited from the legislated coal price cap of $125/t, which
included compensation from the NSW Government for prior
coal contracts struck above $125/tonne for coal delivered after
22 December 2022, and a cap on new contracts for deliveries
until 30 June 2024. Gas procurement cost increased from supply
contracts repricing and higher JKM linked supply costs;
•
-$105 million due to higher other electricity procurement
costs. Capacity hedge contract costs were higher as more cap
contracts were purchased in preference to market contracts
(primarily swaps) and also to manage the risk of volatile spot
prices on an increased net short position. Solar feed-in-tariffs
were higher reflecting higher volumes and a competitive market
for solar customers. Bundled renewable PPA cost was higher due
to inflationary increases. This was partially offset by lower net
pool costs on an increased net short position as unit pool costs
decreased from $106.2/MWh to $76.0/MWh and lower market
contracts costs due to lower swap prices and increased Eraring
volumes leading to a lower volume of swap purchases;
•
$28 million from increased volumes. Overall volumes were steady
on the prior year as higher margin retail sales were partially offset
by a decrease in lower margin business volumes.
Owned and contracted generation output of 21.7 TWh, was higher
by 2.6 TWh on FY23, primarily driven by higher Eraring generation
output (+2.1 TWh) to support Government policy aiming to increase
generation to help put downwards pressure on FY25 customer
tariffs. Renewable PPAs volumes increased by 0.2 TWh due to
higher Stockyard Hill Wind Farm volumes. Refer to the Electricity
Supply table below.
Sources and uses of electricity (TWh)1
Solar FiT
Renewables
Coal (Eraring)
Gas
Other
Swap contracts
Short position
Retail
Business
Losses
FY23
Sources
FY24
Sources
FY23
Uses
FY24
Uses
0
10
20
30
40
1
Solar FiT relates to solar export volumes Origin purchases from customers and then
on-sells in the portfolio.
28
Annual Report 2024
Wholesale energy costs
FY24
FY23
$m
TWh
$/MWh
$m
TWh
$/MWh
Fuel cost1
1,321
18.0
73.4
1,368
15.6
87.8
Generation operating costs
322
18.0
17.9
292
15.6
18.7
Owned generation1
1,643
18.0
91.4
1,660
15.6
106.5
Net pool costs2
429
5.6
76.0
542
5.1
106.2
Bundled renewable PPA costs3
332
3.7
90.5
293
3.4
85.3
Market contracts4
210
5.6
37.4
630
10.0
62.8
Solar feed-in tariff
259
3.3
77.5
135
2.3
60.0
Capacity hedge contracts
412
217
Green schemes (excl. PPAs)
522
501
Other
45
46
Energy procurement costs
3,852
36.25
106.3
4,024
36.45
110.5
1
Includes volume from internal generation and contracted from Pelican Point.
2 Net pool costs includes gross pool purchase costs net of pool revenue from generation, gross and net settled PPAs, and other contracts.
3 Bundled PPAs includes cost of electricity and renewable certificates.
4 Market contracts include swap and energy hedge contracts.
5 Volume differs from sales volume due to energy losses of 0.4 TWh (FY23: 0.6 TWh).
Electricity supply
FY24
FY23
Change
Nameplate
capacity
(MW)
Type1
Output
Pool revenue
Output
Pool revenue
Output
Pool revenue
(GWh)
($m)
($/MWh)
(GWh)
($m)
($/MWh)
(GWh)
($m)
($/MWh)
Eraring
2,922
Units 1 - 4
2,880
Black Coal
14,264
1,554
109
12,150
2,024
167
2,114
(470)
(58)
Gas Turbine
42
OCGT
-
-
-
-
-
-
-
-
-
Darling Downs
644
CCGT
1,253
199
159
1,162
305
263
92
(106)
(104)
Osborne2
180
CCGT
363
68
186
431
115
267
(68)
(47)
(81)
Uranquinty
692
OCGT
419
138
329
132
57
429
286
81
(100)
Mortlake
584
OCGT
440
89
203
432
123
284
8
(34)
(82)
Mount Stuart
423
OCGT
33
25
750
15
12
758
18
13
(8)
Quarantine
234
OCGT
120
25
210
196
53
268
(76)
(27)
(58)
Ladbroke Grove
80
OCGT
57
15
263
61
19
314
(3)
(4)
(51)
Roma
80
OCGT
21
9
403
21
11
492
(0)
(2)
(89)
Shoalhaven
240
Pumped
Hydro
105
39
371
211
54
256
(107)
(15)
115
Internal generation
6,079
17,075
2,160
127
14,811
2,772
187
2,264
(612)
(61)
Pelican Point
240
CCGT
908
770
139
Renewable PPAs
1,5153 Solar / Wind
3,668
3,439
229
Owned and
contracted
generation
7,834
21,651
19,019
2,632
1
OCGT stands for open cycle gas turbine; CCGT stands for combined cycle gas turbine.
2 Origin has a 50 per cent interest in the 180 MW plant and contracts 100 per cent of the output.
3 Nameplate capacity includes Stockyard Hill. Origin received 50 per cent of its production output during HY23, then 100 per cent from 1 January 2023.
29
Operating and Financial Review
5.1.3 Natural Gas
Volume summary
FY24
FY23
Change
(PJ)
Change
(%)
Volume sold (PJ)
Retail
Business
Total
Retail
Business
Total
New South Wales1
10.4
23.8
34.2
12.3
24.5
36.9
(2.7)
(7)
Queensland
3.0
59.8
62.8
3.1
66.9
70.1
(7.3)
(10)
Victoria
19.9
32.4
52.3
24.1
39.5
63.6
(11.3)
(18)
South Australia2
4.8
6.9
11.7
5.7
10.3
16.0
(4.3)
(27)
External volumes sold
38.1
122.8
160.9
45.2
141.3
186.5
(25.6)
(14)
Internal sales (generation)
35.5
30.6
4.9
16
Total volumes sold
196.4
217.1
(20.8)
(10)
1
Australian Capital Territory customers are included in New South Wales.
2 Northern Territory and Western Australia customers are included in South Australia.
Gross Profit summary
FY24
FY23
Change
(%)
Change
($/GJ)
$m
$/GJ
$m
$/GJ
Revenue
3,244
20.2
3,510
18.8
(8)
1.3
Retail (residential/SME)
1,402
36.8
1,397
30.9
0
5.9
Business
1,842
15.0
2,114
15.0
(13)
0.0
Cost of goods sold
(2,564)
(15.9)
(2,567)
(13.8)
0
(2.2)
Network costs
(784)
(4.9)
(783)
(4.2)
(0)
(0.7)
Energy procurement costs
(1,780)
(11.1)
(1,784)
(9.6)
0
(1.5)
Gross Profit
680
4.2
943
5.1
(28)
(0.8)
Gross margin %
21.0%
26.9%
(22)
Natural Gas Gross Profit decreased by $263 million to $680 million
driven by:
•
+$187 million due to retail and business customer tariffs repricing
(excluding oil and JKM linked sales), reflecting the recovery
of higher costs associated with the current and prior period
(+$250 million), partially offset by higher procurement costs
(excluding oil and JKM linked purchases), due to contract
repricing, CPI adjustments on fixed price contracts and higher
priced market purchases (-63 million);
•
-$320 million due to non-repeat of trading gains achieved in the
prior period reflecting JKM price movements as well as the timing
of JKM hedge execution, as majority of the JKM exposure in
current year was hedged at higher prices; and
•
25.6 PJ decrease in external sales volume (-$129 million) due to
lower business volumes on lower short term trading sales and
expiration of customer contracts, as well as lower retail volumes
primarily driven by warmer weather.
Sources and uses of gas (PJ)1
APLNG - fixed price
Other fixed price
Oil/JKM linked
Retail
Business - C&I
Business - Wholesale
Generation
FY23
Sources
FY24
Sources
FY23
Uses
FY24
Uses
0
50
100
150
200
250
1
Fixed price contracts are subject to CPI adjustments.
30
Annual Report 2024
5.1.4 Electricity and Natural Gas cost to serve
FY24
FY23
Change
($)
Change
(%)
Cost to maintain ($ per average customer)1
(173)
(122)
(50)
41
Cost to acquire/retain ($ per average customer)1
(35)
(26)
(9)
33
Electricity and Natural Gas cost to serve ($ per average customer)1
(208)
(149)
(59)
40
Maintenance costs ($m)
(621)
(439)
(182)
41
Acquisition and retention costs ($m)2
(127)
(95)
(32)
34
Electricity and Natural Gas cost to serve ($m)3
(748)
(534)
(214)
40
1
Represents cost to serve per average customer account, excluding CES accounts.
2 Customer wins (FY24:564,000; FY23: 465,000) and retains (FY24: 991,000; FY23: 907,000).
3 Commission costs have been reclassified from Cost to Serve to Electricity Gross Profit from FY24. FY23 has been restated for comparison purpose ($42 million).
FY24
($m)
FY23
($m)1
Change
($)
Change
(%)
Labour
(203)
(153)
(50)
33
Bad and doubtful debts
(190)
(132)
(57)
43
Other variable costs
(169)
(98)
(72)
74
Retail and Business
(562)
(383)
(179)
47
Wholesale
(77)
(64)
(13)
20
Corporate services
(109)
(88)
(22)
25
Electricity and Natural Gas cost to serve2
(748)
(534)
(214)
40
1
Classifications restated where applicable to align with FY24, with certain costs classified as direct business costs rather than corporate service costs.
2 Commission costs have been reclassified from Cost to Serve to Electricity Gross Profit from FY24. FY23 has been restated for comparison purpose ($42 million).
Electricity and Natural Gas cost to serve is up $214 million including $57 million higher bad and doubtful debt provision due to higher bill sizes,
and slower collections driven by cost of living pressures, additional compliance measures and delay in reaching full system functionality in
Kraken. Labour increase of $50 million is largely driven by additional temporary resources whilst the Retail business focuses on operational
efficiency post migration. Higher variable cost reflects higher regulatory and compliance costs, higher IT spend on security and enhancing
data and analytics capabilities as well as the growth investment for new developing functions such as Origin Zero. FY24 cost to serve also
included investment in customer acquisition and retention, resulting in ~ 70,000 growth in mass market electricity, gas and Home Assist
customer accounts, excluding CES and Broadband.
In the first half of FY24, we focused on business stabilisation post the Kraken migration and in the second half turned the focus to operational
efficiency. As a result the business has operated with a temporarily higher workforce in FY24. Through ongoing delivery of functionality, the
Retail workforce has reduced by 16.5 per cent from the peak in the first half of FY24 and we expect this trend to continue into FY25. We
continue to pursue further improvements to our cost to serve and expect modest improvement in FY25, with further improvements in FY26.
Based on current market conditions we are targeting a $100 -$150 million reduction from FY24 to FY26.
Bad debt expense as a percentage of total Electricity and Natural Gas revenue increased to 1.57 per cent from 1.18 per cent in FY23.
31
Operating and Financial Review
Customer accounts
Customer accounts ('000) as at
30 June 2024
30 June 2023
Change
Electricity
2,763
2,742
21
New South Wales1
1,155
1,157
(1)
Queensland
691
687
4
Victoria
645
634
11
South Australia2
272
264
8
Natural Gas
1,323
1,282
41
New South Wales1
402
386
16
Queensland
179
176
3
Victoria
520
501
19
South Australia2
222
220
3
Total electricity and natural gas
4,0863
4,0243
63
Broadband
152
96
56
LPG
359
368
(9)
Home Assist
60
37
23
Total customer accounts
4,657
4,525
132
1
Australian Capital Territory customer accounts are included in New South Wales.
2 Northern Territory and Western Australia customer accounts are included in South Australia.
3 Includes 464,000 Community Energy Service customer accounts (FY23: 442,000).
Our churn differential advantage to market continues to widen, with
Origin's churn at 13.2 per cent (FY24 12 month average), 6.9 percent
lower than the market churn of 20.1 percent.
FY24 was a period of significant customer growth, with an overall
increase of 132,000 customer accounts. Electricity customer
accounts rose by 21,000, with increases in every state other than
New South Wales which was stable. Natural Gas customer accounts
grew by 41,000, with growth in share across all states. Broadband
customer accounts grew by 56,000, reaching a total of 152,000
customer accounts, while Home Assist customer accounts grew
by 23,000, totalling 60,000. LPG customer accounts decreased
9,000, attributable to the sale of the LPG Pacific business.
5.1.5 LPG
FY24
FY23
Change
Change (%)
Volumes (kT)
331
374
(43)
(11)
Revenue and Other Income ($m)
623
749
(126)
(17)
Cost of goods sold ($m)
(428)
(511)
83
(16)
Gross Profit ($m)
195
238
(43)
(18)
Operating costs ($m)
(126)
(142)
16
(11)
Underlying EBITDA ($m)
69
96
(28)
(29)
Origin is one of Australia’s largest LPG and propane suppliers, procuring and distributing LPG to residential and business locations across
Australia. The sale of Origin's LPG business in the Pacific was completed during the September 2023 quarter, which included wholly-owned
operations in Vanuatu, American Samoa, Samoa and Cook Islands, and joint-venture operations in Fiji, Papua New Guinea and the
Solomon Islands.
EBITDA was lower in FY24 predominantly due to divestment of the Pacific business ($22 million impact). In the Australian business, volumes
and Gross Profit have declined year on year with mild weather and cost of living pressures impacting residential consumer behaviour and
demand across some industrial sectors. Operating costs increased with inflationary pressures partially mitigated by ongoing cost optimisation
initiatives and unrealised foreign exchange gains on USD denominated shipping lease liabilities.
Monthly Churn (%)
Origin
Market
Jul-2022
Sep-2022
Nov-2022
Jan-2023
Mar-2023
May-2023
Jul-2023
Sep-2023
Nov-2023
Jan-2024
Mar-2024
May-2024
32
Annual Report 2024
5.1.6 Solar and Energy Services
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Revenue and Other Income
681
564
117
21
CES Gross Profit
139
148
(8)
(6)
Solar Gross Profit
26
23
3
12
Broadband and Other Gross Profit
8
(2)
10
(500)
Gross Profit
174
169
4
3
Operating costs
(122)
(114)
(7)
6
Underlying EBITDA
52
55
(3)
(5)
The Community Energy Services (CES) business provides serviced hot water, natural gas and electricity via embedded networks and
other related services such as communal solar and battery systems to apartment blocks. The Solar business provides installation of solar
photovoltaic (PV) systems and batteries to residential and business customers, and ongoing support and maintenance services.
Underlying EBITDA decreased $3 million. CES Gross Profit decreased $8 million from lower average consumption due to weather and higher
cost of energy as legacy contracts rolled off. Broadband and Other Gross Profit increased $10 million from acquisition of Retail aggregators
partly offset by NBN as we continue to invest in growing the business, with customer accounts up 56,000 to 152,000. Operating costs
increased $7 million mainly due to Retail aggregators, partly offset by efficiencies integrating the WINconnect acquisition.
5.1.7 Future Energy
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Gross margin and other income
11
2
9
535
Operating costs - Origin 360 EV
(17)
(12)
(5)
44
Operating costs - Other
(46)
(44)
(1)
3
Total operating costs
(62)
(56)
(7)
12
Underlying EBITDA
(51)
(54)
3
(5)
Net (investments) / disposals1
(2)
(2)
0
(4)
1
Relates to investments in future energy technology focused private equity funds.
Future Energy activities and associated expenditure reflects the transition from the incubation phase to scaling of various initiatives.
Gross margin and other income increased $9 million reflecting the business growth including Origin 360 EV and returns on investments in
private equity funds focused on future energy technology.
Operating costs for Origin 360 EV increased in line with increased business activity. Other operating expenditure was stable.
Origin Loop
Origin Loop, our in-house Virtual Power Plant, provides connected solutions to customers across multiple products and services. An
increasing variety of distributed assets are aggregated, controlled and dispatched in response to market and portfolio positions. Benefits
from Origin Loop are derived through lower energy procurement costs which is recognised in Electricity Gross Profit, and higher customer
engagement which improves churn, lowering cost to serve.
Assets connected to Origin Loop have grown by approximately 70 per cent, from 815 MW to 1,385 MW in FY24. The load growth was
primarily driven by additions to Origin’s hot water orchestration program, which represents an attractive opportunity to lower wholesale
electricity costs by moving hot water heating load from overnight to the middle of the day, while actively managing customer requirements
to maintain hot water amenities.
Spike is our behavioural demand response program that rewards customers for reducing energy usage during periods of peak market demand.
In FY24, we shifted focus from customer acquisition to retention and engagement. We had 105,000 Spike customers as at 30 June 2024
(30 June 2023: 94,000
14).
Batteries connected to Loop grew 135 per cent across FY24, with the highest growth towards the end of the year following close collaboration
with key industry partners. We successfully launches the 'EV Power Up' tariff was successfully launched in May 2024, and grew to 2,200
customers by 30 June 2024. Customer uptake and satisfaction has exceeded expectations, and this class of asset is expected to be a key
contributor of further growth as the range of eligible vehicles and home-chargers increases.
14 Restated to align with FY24. Now only includes active customers, rather than all customers who have connected previously.
33
Operating and Financial Review
Origin 360 EV
Origin 360 EV, our e-mobility business, provides a full suite of end-to-end solutions to both commercial and residential customers. We
continue to accelerate our growth by scaling our Fleet, Subscription and Charging solutions. EVs under management across Origin's salary
sacrifice subscription product grew to 900 as at 30 June 2024, and is expected to continue to grow with a number of large organisations
joining the program throughout FY25. Charging infrastructure sales and installations also continue to grow strongly.
34
Annual Report 2024
5.2 Integrated Gas
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Share of APLNG (see Section 5.3.1)
1,936
2,246
(310)
(14)
Integrated Gas - Other (see Section 5.3.2)
15
(327)
342
(105)
Underlying EBITDA
1,951
1,919
32
2
Underlying depreciation and amortisation
(20)
(22)
2
(9)
Underlying share of ITDA from APLNG
(976)
(1,060)
84
(8)
Underlying EBIT
955
837
118
14
5.2.1 Share of APLNG
Exploration and
appraisal
Drilling and
gathering
Processing and
transportation
Domestic
customers
Liquefaction and
export customers
Origin holds a 27.5 per cent shareholding in APLNG, an equity accounted incorporated joint venture. APLNG operates Australia’s largest
CSG to LNG export project (by nameplate capacity) with the country’s largest 2P CSG reserves.15 Origin is the operator of the upstream CSG
exploration and appraisal, development and production activities. ConocoPhillips is the operator of the 9 mtpa two-train LNG liquefaction
facility at Gladstone in Queensland.
As APLNG is an equity accounted incorporated joint venture, Integrated Gas reports its share of APLNG EBITDA. The share of APLNG ITDA
is recorded as a line item between EBITDA and EBIT.
APLNG acquired various CSG interests from Tri-Star in 2002 that are subject to reversionary rights and an ongoing royalty interest in favour of
Tri-Star. These interests represent approximately 19 per cent of APLNG’s 2P CSG reserves and approximately 18 per cent of 3P (proved plus
probable plus possible) CSG reserves (as at 30 June 2024). Refer to Section 7 for disclosure relating to Tri-Star litigation associated with these
CSG interests.
Under the terms of the LNG SPA between APLNG and Sinopec, either party may issue a price review notice in the second quarter of FY25.
Financial summary – APLNG
FY24
FY23
($m)
APLNG
100%
Origin
share
APLNG
100%
Origin
share
Commodity revenue and other income
9,981
2,745
11,259
3,096
Operating expenses
(2,940)
(809)
(3,091)
(850)
Underlying EBITDA
7,041
1,936
8,168
2,246
Depreciation and amortisation
(1,721)
(473)
(1,659)
(456)
Project finance interest expense
(351)
(97)
(339)
(93)
Other financing expense
(114)
(31)
(101)
(28)
Interest income
119
32
87
24
Income tax expense
(1,492)
(410)
(1,850)
(509)
Underlying ITDA1
(3,559)
(979)
(3,862)
(1,062)
Underlying Profit
3,482
957
4,306
1,184
1
See Origin Financial Statements note B2.1 for details relating to a $3 million difference between APLNG ITDA and Origin's reported share in FY24. (FY23: $2 million)
15
As per EnergyQuest EnergyQuarterly, June 2024.
35
Operating and Financial Review
1,936
(3)
95
8
41
FY23
LNG volume
LNG price
Domestic revenue
Other income
Opex
FY24
Commodity revenue and other income
-$351 million
2,246
(451)
Movements in Underlying EBITDA ($m)
Origin’s FY24 share of APLNG Underlying EBITDA was lower by $310 million, primarily due to lower realised oil prices.
•
Commodity revenue and other income decreased by $351 million, primarily reflecting a lower realised oil price of US$86/bbl (A$132/bbl)
compared to US$103/bbl (A$154/bbl) in FY23 and lower domestic revenue from lower market linked short term contract prices, partially
offset by higher LNG volumes.
•
Operating expenses decreased by $41 million, reflecting lower purchases/swaps compared to FY23 and one-off exploration write off in
FY23, offset by higher power costs and higher workover activity.
Origin's share of depreciation and amortisation increased by $17 million, mainly reflecting foreign exchange impact and higher spend in capital
expenditure program including sustain and non-operated.
APLNG volume summary
FY24
FY23
APLNG
100%
Origin
share19
APLNG
100%
Origin
share19
Volumes (PJ)
Operated
555
153
534
147
Non-operated
139
38
140
38
Total production
694
191
674
185
Purchases
17
5
21
6
Changes in upstream gas inventory/other
(8)
(2)
(6)
(2)
Liquefaction/downstream inventory/other
(38)
(10)
(44)
(12)
Total sales
665
183
645
177
Commodity revenue ($m)
Domestic gas
1,272
350
1,283
353
LNG
8,608
2,367
9,903
2,723
Sales mix (PJ)
Domestic gas
163
45
150
41
LNG contract
446
123
468
129
LNG spot
57
16
27
7
Realised price
Domestic gas (A$/GJ)
7.83
8.54
LNG (A$/GJ)
17.14
20.01
LNG (US$/mmbtu)
11.85
14.20
APLNG total production increased 3 per cent or 20 PJ in FY24, primarily driven by the ongoing effective well and field optimisation activities
and fewer scheduled maintenance disruptions. Well workover execution in FY24 focused on reducing the well workover inventory backlog.
Operated production in FY24 was reduced by the unplanned turndown of approximately 9 PJ associated with the LNG vessel power outage
at the APLNG Curtis Island LNG facility in November 2023. Production returned to pre-event levels by mid-December 2023.
APLNG sales volumes increased 3 per cent during FY24, reflecting higher production.
36
Annual Report 2024
The average realised LNG price decreased 14 per cent to A$17.14/GJ driven by lower realised export oil linked prices. The average realised
domestic gas price decreased 8 per cent to $7.83/GJ, primarily driven by lower market-linked short-term contract prices. The average realised
domestic gas sale price remains below the international netback price.
Cash flow – APLNG 100%
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Underlying EBITDA
7,041
8,168
(1,127)
(14)
Non-cash items in underlying EBITDA
(10)
(40)
30
(75)
Change in working capital
165
56
109
195
Tax paid
(208)
-
(208)
n/a
Operating cash flow
6,988
8,184
(1,196)
(15)
Capital expenditure
(672)
(481)
(191)
40
Acquisitions/disposals
-
1
(1)
(100)
Interest income
120
82
38
46
Investing cash flow
(552)
(398)
(154)
39
Project finance interest and transaction costs
(347)
(311)
(36)
12
Repayment of project finance
(908)
(813)
(95)
12
Repayment of lease liabilities
(62)
(64)
2
(3)
Interest on lease liabilities
(26)
(27)
1
(4)
Ordinary dividends paid
(5,032)
(6,483)
1,451
(22)
Financing cash flow
(6,375)
(7,698)
1,323
(17)
Net increase/(decrease) in cash and cash equivalents
61
88
(27)
(31)
Effect of exchange rate changes on cash
72
88
(16)
(18)
Net increase/(decrease) in cash and cash equivalents including
FX movement
133
176
(43)
(24)
APLNG paid dividends to shareholders of $5,032 million in FY24, down from $6,483 million in line with lower revenue. APLNG distributed
$1,384 million cash to Origin including the equivalent of $132 million fully franked dividends in FY24, down from $1,783 million unfranked
dividends in the prior year. APLNG fully utilised its remaining tax losses in FY24, and commenced paying tax in the last quarter.
The net cash inflow of working capital of $165 million is primarily due to higher contract payables associated with timing of LNG
cargo deliveries.
Increase in capital expenditure of $191 million reflects an increase in non-operated development activities, an increase in operated well
delivery activity, and exploration activities.
The project finance facility requires APLNG to hold an amount of cash to service near-term operational and project finance obligations. As at
30 June 2024, APLNG held $1,853 million of cash, up from $1,720 million at 30 June 2023.
37
Operating and Financial Review
Operating expenditure – APLNG 100%
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Purchases/swaps
(186)
(280)
94
(34)
Royalties and tariffs1
(881)
(933)
52
(6)
Upstream operated opex
(1,192)
(1,112)
(80)
7
Upstream non-operated opex
(315)
(294)
(21)
7
Downstream opex
(296)
(334)
38
(11)
APLNG Corporate/other
(70)
(138)
68
(49)
Total operating expenses per Profit and Loss
(2,940)
(3,091)
151
(5)
Other cash items
(69)
(3)
(66)
2,214
Total operating cash costs
(3,009)
(3,094)
85
(3)
1
Reflects actual royalties paid. At breakeven price, royalties and tariffs would have amounted to $209 million (FY23: $211 million)
Operating expenses reduced $151 million. Purchases/swaps costs decreased $94 million reflecting lower levels of gas swaps in FY24. Gas
swap arrangements with other major producers were utilised in FY23 to manage major downstream maintenance activity.
Royalties and tariffs were lower by $52 million, reflecting reduced commodity revenue.
Upstream operated opex increased $80 million, mainly due to higher power costs and higher workover activity focused on investing in well
optimisation technologies and clearing wet weather inventory backlog. Upstream non-operated opex increased by $21 million due to higher
workover activity and broad inflationary pressures.
Downstream opex decreased by $38 million reflecting major downstream maintenance activity in FY23. APLNG Corporate/other decreased
by $68 million following a one-off $77 million exploration write off in FY23.
Capital expenditure – APLNG 100%
FY24
FY23
Change
Change
($m)
($m)
($m)
(%)
Operated upstream - Sustain
(352)
(280)
(72)
26
Operated upstream - Infrastructure
(24)
(29)
5
(17)
Exploration and appraisal
(66)
(38)
(28)
74
Downstream
(23)
(24)
1
(4)
Non-operated
(230)
(149)
(81)
54
Total capital expenditure
(695)
(521)
(174)
33
Capital expenditure increased $174 million. Operated upstream - Sustain costs increased $72 million reflecting an increase in operated
well delivery.
Operated upstream - Sustain includes expenditure for drilling, completions, fracture stimulation, gathering network, surface connection,
capital improvements and land access which occurs over multiple years. In FY24, 85 operated wells were drilled (FY23: 64), 27 wells were
fracture stimulated (FY23:42) and 89 operated wells were commissioned (FY23: 71).
Non-operated expenditure increased $81 million due to increased activity in Fairview and Angry Jungle development programs operated by
GLNG and Kenya and Bellevue drilling programs operated by QGC.
38
Annual Report 2024
5.2.2 Integrated Gas – Other
This segment comprises Origin Integrated Gas activities that are separate from APLNG, including exploration interests in the Cooper-
Eromanga Basin, interest in the Hunter Valley Hydrogen Hub Project on Kooragang Island and commodity hedging and trading activities.
Cooper-Eromanga Basin (Queensland)
In June 2023, Origin executed an agreement to transfer its 75 per cent interest and operatorship of five permits back to Bridgeport. The
transfer is pending approval from the Queensland Government.
Hunter Valley Hydrogen Hub
Origin completed FEED in FY24 for the Hunter Valley Hydrogen Hub project and is targeting FID in FY25. Strong financial and development
support has been received from the Australian and NSW Governments, with a $70 million grant Funding Agreement from the Australian
Government and $45 million in funding from the NSW Government awarded. The Project is currently being assessed under the Australian
Government's Hydrogen Headstart program.
This segment also includes overhead costs (net of recoveries) incurred as upstream operator and corporate service provider to APLNG, costs
associated with growth initiatives such as hydrogen and carbon, and costs incurred in managing Origin’s exposure to LNG pricing risk and
impacts of its LNG trading positions.
Financial summary
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Origin only commodity hedging and trading
70
(235)
305
(130)
Other Origin only costs
(55)
(91)
36
(40)
Underlying EBITDA
15
(327)
342
(105)
Underlying depreciation and amortisation/ITDA
(17)
(20)
3
(15)
Underlying Profit/(Loss)
(2)
(347)
345
(99)
Other Origin only costs decreased $36 million, primarily reflecting exit from exploration acreage in FY23.
Refer to the following table for a breakdown of Origin only commodity hedging and trading costs.
39
Operating and Financial Review
Commodity hedging and trading summary
FY24 hedge positions realised a $70 million net gain, compared to a $235 million loss in FY23.
Based on current forward market prices16, we estimate a net loss on oil, gas and FX hedging in FY25 of $95 million.
($m)
FY24 actual
FY23 actual
FY25 estimate1
Oil hedging premium expense
(2)
(22)
-
Gain/(loss) on oil, gas and FX hedging
(15)
(271)
(95)
Gain/(loss) on LNG trading
87
58
Total
70
(235)
1
Based on forward prices as at 2 August 2024.
Oil, gas and FX hedging
Origin has entered into oil and gas hedging instruments to manage its share of APLNG oil and gas price risk based on the primary principle
of protecting Origin's investment grade credit rating and cash flows during volatile market periods and to satisfy conditions outlined in the
Consortium's acquisition proposal. The hedging portfolio comprises hedge instruments over FY25 to FY27 and is detailed below. No further
hedging activity has taken place since 30 June 2023.
For FY25, Origin's share of APLNG related JCC oil and JKM gas price exposure is estimated to be approximately 17 MMBoe and 20 tBtu
respectively. As at 2 August 2024, we estimate that 41 per cent of JCC and 28 per cent of JKM have been priced (based on LNG contract
lags) at approximately US$87/bbl and US$12/MMBtu respectively before any hedging.
As at 2 August 2024, Origin has separately hedged to provide downside protection for FY25 using the following instruments:
•
6.2 MMbbl of JCC USD swaps hedged at a fixed price of US$76/bbl;
•
2.3 tBtu of JKM futures hedged at a fixed price of US$14/MMBtu; and
•
US$579 million FX forwards hedged at a fixed price of 0.67.
As at 2 August 2024, 2.7 MMbbl of JCC oil hedging and 0.3 tBtu of JKM hedging have been priced at US$76/bbl and US$16/MMBtu
respectively. The effective prices of the remaining 3.5 MMbbl of oil and 2.0 tBtu JKM hedging are US$75/bbl and US$14/MMBtu respectively.
Based on a forward oil price of US$82/bbl and forward JKM price of US$14/MMBtu, the effective oil price on the company's FY25
approximate 17 MMBoe and 20 tBtu JCC and JKM exposures are US$80/bbl and US$14/MMBtu including hedges.
No premium expense has been incurred in relation to this position.
The hedge position for FY26 onwards is summarised in the table below:
Hedge instruments
FY26
FY27
Volume
Fixed price
Volume
Fixed price
JCC USD swaps
4.6 MMbbl
US$72/bbl
1.1 MMbbl
US$70/bbl
FX forwards
US$84m
0.69
The 3.2tBtu JKM futures at fixed price of US$11/MMBtu previously shown as part of the FY26 position now forms part of the LNG hedging
and trading, and will be reported as part of that portfolio.
LNG hedging and trading
In 2013, Origin established a Henry Hub linked contract to purchase 0.25 mtpa from Cameron LNG for a period of 20 years, with the first cargo
delivered to Origin in June 2020. In practice, Origin on sells this volume at either European TTF-linked or Asian JKM-linked prices.
Origin manages the price risk associated with the Cameron contract through a range of contracts and derivative hedge instruments. In
2016, Origin established a medium-term contract with ENN LNG Trading Company Limited to sell ~0.28 mtpa linked to Brent oil prices and
commencing in FY19. This contract terminated effective 31 December 2023.
During 2022, opportunistic hedging of future Cameron volumes at higher European sale prices was undertaken, creating significant value for
volumes over FY25 and FY26. The FY25 LNG trading EBITDA is expected to be between $400 to 450 million. In FY26, the total LNG trading
EBITDA is expected to be between $50 to 150 million. This outlook remains subject to market prices on unhedged volumes, operational
performance and delivery risk of physical cargoes, and shipping and regasification costs.
There is an opportunity to continue to optimise value from the Cameron contract out to 2039 by capturing future market dislocations between
Henry Hub priced Cameron LNG volumes and European or Asian prices. Significant value has also been created through optimising cargo
sizes and transport destination flexibility and we expect to continue this activity.
16 As at 2 August 2024.
40
Annual Report 2024
5.3 Octopus Energy
22.7 per cent Origin share
FY24
($m)
FY23
($m)
Change
($m)
Change
(%)
Revenue - energy
4,856
4,828
28
1
Revenue - licensing1
64
37
27
73
Cost of sales
(4,601)
(4,481)
(120)
3
Gross Profit
319
384
(65)
(17)
Operating costs1
(265)
(144)
(121)
84
Underlying EBITDA
55
240
(185)
(77)
Underlying ITDA
(88)
(101)
13
(13)
Underlying Profit
(33)
139
(172)
n/m
1
Licensing revenue and operating costs disclosed here includes fees for Octopus Energy customers using the platform. These are eliminated on consolidation in Octopus
Energy’s statutory financial reporting.
100 per cent Octopus customer accounts ('000) as at
30 June 2024
30 June 2023
Change
UK customer accounts
12,403
9,176
3,227
International customer accounts
1,403
481
922
Contracted Kraken platform customer accounts
51,493
32,158
19,335
Origin’s share of Octopus Energy Underlying EBITDA17 for the period was $55 million, a decrease of $185 million from FY23. The result reflects
lower earnings from the UK Retail business and higher earnings for the Kraken licensing business, offset by negative contributions from the
International Retail and Energy Services businesses as investments are made in scaling those businesses.
The lower earnings from the UK Retail business reflected a non-repeat of the lagged recovery of higher wholesale prices in FY23 and higher
costs associated with the Renewable Energy Guarantees of Origin (REGO) Scheme and Energy Company Obligation (ECO). The REGO
scheme was established to provide transparency to consumers about the proportion of electricity that suppliers source from renewable
electricity and to further support renewable investment in the UK. From March 2023, the price of REGOs increased significantly, driven by
a reduction in supply as Ofgem changed the rules so that European Guarantees of Origin were no longer able to be used to support green
credentials in the UK. The ECO scheme is an energy efficiency scheme administered by Ofgem with funding coming from medium and large
gas and electricity suppliers, including Octopus Energy. Retailers accumulate ECO units by installing energy efficient measures to vulnerable
households. The ECO costs increased by ~£5 per unit from FY23 to ~£25 per unit in FY24 which is in excess of the current price cap allowance.
The non-repeat of wholesale cost recovery and higher REGO and ECO costs were partly offset by strong customer growth, which included a
full year contribution from the customers acquired from Bulb, a part year contribution from the customers acquired from Shell, coupled with
strong organic growth.
Customer accounts grew by 43 per cent in FY24 overall and International Retail customer accounts grew by almost 1 million during the period
across seven non-UK countries. Octopus completed the migration of the 1.2 million customers acquired from Shell (2.2 million accounts) in
March 2024 with a record of 51 working days. Organic growth continued to be strong with a net 600,000 customers choosing to switch to
Octopus Energy in FY24.
Octopus' market-leading Kraken enterprise software has continued to demonstrate its growing appeal as the preferred technology platform
for energy and other utilities globally. ~51 million accounts are now contracted globally, positioning Octopus more than half-way to its
target of 100 million customers contracted to Kraken by 2027. The licensing business improved its contribution, reflecting more paying
customers. Kraken earns recurring revenue from licensing the platform to utilities as well as one-off fees earned through the period of
customers migration. Recurring revenue continues to grow as accounts are migrated onto the platform, while the business maintains strong
profit margins.
Octopus increased its investment in the Energy Services business as it rapidly grows scale. The business supports customers in electrifying
their homes by installing distributed assets. It manages £6.7 billion generation assets and 17,600 electric vehicles as a major leasing provider
in the UK. Additionally, it executed ~780,000 smart meter and ~30,000 EV charger installations in FY24. With a significant trend towards
electrifying heating in the UK and Germany, Octopus began manufacturing heat pumps.
Operating costs increased $121 million primarily driven by strong customer growth also investment made in scaling International Retail and
Energy Services businesses.
In December 2023, Origin increased interest in Octopus Energy to 22.7 per cent up from 20 per cent with an additional investment of
£280 million ($540 million). In May 2024, the valuation of Octopus Energy increased by 15 per cent to US$9 billion (£7.2 billion) with
Generation Investment Management (GIM) and the Canada Pension Plan Investment Board (CPP Investments) investing ~£300 million to
increase their interests.
17
Origin’s interest increased to 22.7 per cent, following the additional £280 million ($540 million) investment in Octopus Energy, announced in December 2023 and completed
on 11 April 2024.
41
Operating and Financial Review
6 Risks related to Origin’s future financial prospects
The scope of Origin's operations and activities means the company is exposed to risks that can have a material impact on future financial
prospects. Material risks, and the Company’s approach to managing them, are summarised below.
Risk management framework
Overseen by the Board and the Audit and Risk Committee, Origin’s risk management framework supports the identification, management
and reporting of material risks. Risks are identified that have the potential to impact the delivery of business plans and objectives. Risks are
assessed to determine the level of consequence and likelihood of occurrence using consistent risk assessment criteria.
The risk framework incorporates the principles of a ‘three lines’ model for managing risks and controls in areas with health and safety,
operational, environment, climate change, financial, reputation and brand, legal and compliance or social impacts. All employees are
responsible for making risk-based decisions in line with the company’s values, objectives and risk appetite.
The Board and Executive review Origin’s most material risks regularly and assesses the effectiveness of the Company’s risk management
framework annually in accordance with the ASX Corporate Governance Principles and Recommendations.
Three lines of defence
Line of defence
Responsibility
Primary accountability
First line
Lines of business
Identifies, assesses, records, prioritises, manages and monitors risks.
Management
Second line
Oversight functions
Provides the risk management framework, tools and systems to
support effective risk management.
Management
Third line
Internal audit
Provides assurance on the effectiveness of governance, risk
management and internal controls.
Board, Board Committees
and Management
Origin identifies and manages emerging risks and escalating threats. During FY24, the accelerating energy transition, as well as ongoing
geopolitical risks, inflationary pressures, and international supply chain disruptions were continuing threats to operational and financial
performance. These threats have required ongoing monitoring, response and management across our existing material risks to minimise
impacts. Our priorities remain ensuring the continuity of operations and supporting activities to provide essential services to our customers,
and to maintain our financial resilience to respond to changes in global markets.
Material risks
The risks identified in this section have the potential to materially affect Origin’s ability to meet our business objectives and impact its future
financial prospects. These risks are not exhaustive and are not arranged in order of significance.
Strategic risks
Strategic risks arise from uncertainties that may emerge in the medium to longer term and, while they may not necessarily impact on short-
term targets, can have an immediate impact on the value of the Company. These strategic risks are managed through continuous monitoring
and reviewing of emerging and escalating risks, ongoing planning and the allocation of resources, and evaluation from management and
the Board.
Risk
Consequences
Management
Competition
Origin operates in a highly competitive retail environment which
can result in pressure on margins and customer losses.
Competition also impacts Origin’s wholesale business, with
generators competing for capacity and fuel and the potential
for gas markets to be impacted by new domestic gas resources,
LNG imports and the volume of gas exports.
Origin is well placed to respond to prevailing headwinds
due to the diversified nature of our business, however Origin
is exposed to coal supply challenges relative to vertically
integrated organisations with coal businesses or those with long
term legacy coal contracts.
•
Our strategy to mitigate the impact of this risk on our retail
business is to provide customers with value for money
and exceptional service, while continuously focusing on
maintaining our cost leadership and innovation.
•
We endeavour to mitigate the impact of this risk on
our wholesale business by sourcing competitively priced
fuel to operate our generation fleet and through efficient
operations to optimise flexibility in our fuel, transportation
and generation portfolio.
42
Annual Report 2024
Risk
Consequences
Management
Technological
developments /
disruption
Origin is exposed to risks and opportunities relating to new digital
and low-carbon technologies. These risks could materialise
in two ways – reducing our existing demand through new
technologies that further support customers (both mass market
and C&I) to generate and store electricity behind the meter;
and potentially stranding existing grid scale assets as new
technologies emerge at lower cost points.
In addition, technology is allowing consumers to understand
and manage their power usage through smart appliances,
having the potential to disrupt the existing utility relationship
with consumers.
Technology also allows customers to have increased awareness
of the impact of when they consume energy and the source of
that energy.
Advances in technology and the abundance of low-cost data
acquisition, communication and control have the potential to
create new business models and introduce new competitors.
Rapid advances in Artificial Intelligence (AI) is an emerging
area of exposure for Origin, and offers both opportunities for
innovation and potential threats to our business. This advancing
technology also exposes Origin to increased risks around data
security, ethics and fairness.
•
Origin actively monitors new technologies, participates
and invests in technological developments through local
and global start-up accelerator programs, trialling new
energy technology and new products and business
models; and feeds this information into future portfolio
growth strategies.
•
Origin works collaboratively with its customers to develop
and progress behind the meter solutions in which Origin
has an ongoing role.
•
In parallel, Origin is growing its distributed generation
and home energy services businesses and endeavouring
to mitigate the impact of this risk on our core energy
businesses by offering superior service and innovative
products and reducing cost to serve.
•
Origin is pursuing opportunities in low-carbon
technologies such as hydrogen, e-mobility, and
carbon management.
•
Origin is actively monitoring and trialling new
AI technologies, while also developing governance
processes that ensure all AI technology is developed
following Responsible AI guidelines and best practice.
Changes in
demand for energy
The volume or source of energy demanded by customers
could change due to price, consumer behaviour,
community expectations, mandatory energy efficiency
schemes, Government policy, economic outlook, weather and
other factors.
Demand for energy is also expected to grow due to increased
electrification, e.g., hydrogen, e-mobility, data centre growth
and distributed infrastructure as a service, providing new
market opportunities.
The current global energy market environment may impact the
supply and cost of energy to our customers, and this could
have an adverse impact on our reputation with customers and
the community.
Any change in demand for energy could impact Origin’s
revenues and future financial performance.
•
Our strategy of increasing renewable energy in our
portfolio and investing in new technology and products,
such as storage, the virtual power plant (VPP) and lower
carbon customer solutions, supports Origin’s ability to
meet future increase in energy demand.
•
We use the flexibility in our gas supply and peaking
generation capacity, as well as the flexibility of Eraring
Power Station, to manage the intermittency of renewables
and maintain reliable supply for customers.
•
Origin is partially mitigating the impact of this risk
by developing data-based customer propositions and
better predicting customer demand through our artificial
intelligence orchestration platform, or VPP, which
connects and controls distributed assets and Internet of
Things (IoT) devices, and by applying advanced data
analytics capability.
Regulatory policy
Origin has broad exposure to regulatory policy change and
other government interventions. Changes to policy and other
government interventions can have an impact on financial
outcomes and, in some cases, change the commercial viability
of existing or proposed projects or operations. Specific areas
subject to review and development include government
subsidies for building new generation or transmission capacity,
direct government investment in generation, energy market
design, domestic and international climate change policies,
domestic gas market interventions, wholesale and retail price,
consumer protection regulation, royalties and taxation policy,
and industrial relations.
•
Origin contributes to the policy process with federal,
state and territory governments by actively participating
in public policy debate, proactively engaging with policy
makers and participating in public forums, industry
associations, think tanks and research.
•
Origin advocates directly with key members of
governments, opposition parties and bureaucrats to
achieve sound policy outcomes aligned with our
strategy, Purpose and commercial objectives. Origin
also makes formal submissions to relevant government
policy inquiries.
•
Origin actively and publicly promotes the customer
and economic benefits that flow from our activities in
deregulated energy markets.
43
Operating and Financial Review
Climate risks
Climate change risk is considered a strategic risk for Origin. Under the Task Force on Climate-related Financial Disclosures (TCFD) framework,
Origin’s climate-related risks can be classified as transitional or physical. Many of Origin’s climate-related risks are managed within our existing
risks. The table below provides a summary of our climate-related risks under the categories used in the TCFD framework.
TCFD Risk Type
Consequences
Management
Transition Risks
Policy and Legal
Risk time horizon:
Short – Medium
Changes to government policy and regulation in relation to,
and resulting from, climate change may present risks and
opportunities for Origin, including:
•
regulatory intervention in the national electricity and
gas markets;
•
carbon pricing (including carbon markets, border adjustment
and taxes);
•
the emergence of new climate-related legislation or
reporting requirements;
•
government investment in energy infrastructure and
generation including partnerships;
•
government grants and subsidies to innovate and incentivise
market development; and
•
development approvals and planning and zoning laws.
These changes may have an impact on Origin’s asset values,
operating costs, or investment decisions.
There is an increased risk of climate change-related litigation
globally and in Australia. Any litigation would incur legal
costs and potential reputation impacts and, if successful,
may result in potential penalties, compensation payments or
settlement costs and may directly or indirectly influence future
operational strategy.
•
Origin continues to advocate for coordinated and long-
term energy policy at the national level to give industry
the confidence to invest in new electricity generation and
gas supply.
•
We engage proactively with all levels of government
and regulatory bodies on energy and climate policy,
including through policy submissions, participating in
think tanks, research and various industry associations.
This consultation helps to support government responses
in a rapidly evolving landscape.
•
Climate-related commitments and disclosures are
regularly reviewed and updated to take into consideration
up to date science, regulatory requirements and
stakeholder expectations.
•
Origin monitors and reviews developments in climate
change-related laws and litigation.
•
Origin carries out scenario-based planning and portfolio
assessment that considers potential changes to
government policy and regulation.
Technology
Risk time horizon:
Short – Long
The development of new technologies may be required to assist
Origin to meet its medium to long-term emissions reduction
targets and ambitions, however there is uncertainty regarding
the efficacy, timing, cost and availability of those technologies.
The growth of low emissions technologies, distributed
generation, and demand management enabled by technologies
could result in lower demand (and revenue) for existing products,
however these also present new market opportunities and
potential revenue streams.
•
Origin monitors new technologies and participates in local
and global start-up accelerator programs, trialling new
energy technology and exploring investments in new
products or business models.
•
We are growing our offerings in emerging technologies
and markets.
•
More details are in the ‘Technological developments /
disruption’ strategic risk above.
Market
Risk time horizon:
Short - Medium
The energy transition represents a period of significant change
and volatility which presents both risks and opportunities to
Origin. The ongoing decarbonisation of energy markets and
lower demand for fossil fuels in some markets could result in:
•
the reduced lifespan of existing carbon-intensive assets and
potential for stranded assets;
•
the continued electrification of some sectors that currently
depend on fossil fuels, with potential to increase overall
demand for electricity;
•
a change in the competitive landscape and the development
of new markets and business models that Origin can
participate in, as cleaner fuels, renewables, storage, and
distributed generation markets evolve; and
•
energy market price volatility and higher instances of prices
below our short run marginal costs, as both the volume and
source of energy supply and demand shift.
Origin's response to these market changes may have a positive or
negative influence on our future financial prospects including our
earnings, asset values, and investments.
As Origin embarks upon the significant transition of its wholesale
generation portfolio and seeks to invest in new generation
capacity, there is risk associated with execution of this strategy
which involves development and construction of large-scale,
complex infrastructure projects which could cost more and take
longer to develop than planned.
•
Our ambition is to lead the energy transition
through cleaner energy and customer solutions, and
we are strategically positioned to benefit from the
energy transition.
•
Origin is focused on growing its offering of lower
carbon solutions, including solar and batteries, electric
vehicles and demand management, that help our
customers decarbonise. We are also accelerating
growth in renewables and cleaner energy and aim
to grow our portfolio of renewables and storage to
4-5 GW by 2030. This may come from Origin-owned
installations or contracted sites, and from a combination
of direct investment and accessing third-party capital
where appropriate.
•
We have committed to approximately 1.5 GW of owned
and tolled battery projects so far and have acquired
a number of wind development opportunities during
FY24, including the 1.5 GW Yanco Delta Wind Farm
development project and 800 MWh battery development
opportunity in NSW. We are also exploring both domestic
and export market opportunities for renewable hydrogen.
•
We believe there will continue to be a long-term role for
natural gas to maintain energy security and support the
energy transition. Our portfolio of gas-fired peaking plants
will continue to have an important role to play in Australia’s
energy transition to support variable renewable output and
maintain reliable electricity supply.
44
Annual Report 2024
TCFD Risk Type
Consequences
Management
Transition Risks
Origin's financial performance during the energy transition will
also be influenced by the timely and affordable access to:
•
capital to support our strategy and growth aspirations;
•
land and infrastructure, including the necessary network
transmission capacity to enable investment in renewables and
other third-party infrastructure; and
•
the necessary inputs including skills, commodities, and
other critical supplies to develop renewable and cleaner
energy assets.
Development of new generation capacity is expected to be
capital intensive. Origin may need to consider the funding
of some projects utilising its own balance sheet and funding
sources and as such, there is a risk that this could impact debt
levels, dividends, or funding capacity to invest in other growth
initiatives more generally.
•
We intend to ensure that our capital expenditure portfolio
is consistent with our strategy and emissions reduction
targets. Relevant investments in growth projects will be
evaluated against our emissions reduction targets and
our ambition to be net zero emissions by 2050. Climate
change scenario analysis plays a role in our assessment of
the assets we should hold, invest in, dispose of and acquire.
•
Planning for renewable generation and energy storage
investments considers the required labour skills,
commodities and supply chains.
•
Origin is investing in new technology to support our ability
to manage the supply / demand balance in the electricity
market. This includes scaling an artificial intelligence
orchestration platform, or VPP, which connects, and
controls distributed assets and IoT devices, and applies
advanced data analytics capability to smart meter data to
better predict customer demand and develop data-based
customer propositions. The VPP provides Origin with an
important tool to manage the supply / demand balance in
the electricity market.
Reputation
Risk time
horizon: Short
Our strategy, emissions reduction targets and ambitions may fail
to meet stakeholder expectations. This includes the timing and
alignment of our portfolio decisions, and how we set, measure
and report on climate change targets. We may also fail to meet
the ambitions or targets we set for Origin. These failures, if
realised, could result in:
•
increased cost of, or restricted access to, debt and equity
capital and insurance;
•
adverse impacts to our social licence to operate and our
reputation among our communities, customers, suppliers and
other stakeholders; and
•
challenges in attracting and retaining talent.
Our path through the energy transition will have an impact on our
people, communities and customers as our business changes,
including the planned closure of the Eraring coal-fired power
station as early as August 2027. There is a risk we fail to meet
stakeholder expectations in relation to a “just energy transition”.
•
Origin released its Climate Transition Action Plan in
2022, outlining our ambition to lead the energy transition
through cleaner energy and customer solutions. Included
in the plan are short and medium-term targets for
emissions reduction across Origin, towards our long-term
ambition to be net zero in Scope 1, 2 and 3 emissions by
2050. We believe our medium-term emissions intensity
target and our long-term net zero emissions ambition are
consistent with the goals of the Paris Agreement to limit
the increase in the average global temperature to 1.5°C
above pre-industrial levels .
•
Origin has been using the TCFD as the framework for our
external climate disclosures since 2018.
•
Origin proactively engages with our capital providers
and other financial stakeholders to ensure they are
well informed of our climate change strategy, targets
and ambitions.
•
We engage with communities to understand, mitigate,
and report on environmental risks associated with
our projects and operations, including relating to
climate change.
•
We have principles for a just energy transition which guide
our approach and are underpinned by open inclusive and
transparent engagement.
•
We have a dedicated team to support our people through
Eraring’s transition and to contribute to its safe and
reliable operations.
Physical Risks
Chronic
Risk time horizon:
Short – Long
Changing weather patterns may influence the demand for
energy, which could impact Origin’s revenues and future
financial performance.
•
Origin is applying advanced data analytics capability
to better predict customer demand and increasing our
supply of renewables and flexible capacity to meet
changes in demand.
•
More details are in the ‘Changes in demand for energy’
strategic risk above.
Acute
Risk time horizon:
Short – Long
Changing and more frequent and severe weather conditions,
including floods, droughts, bushfires, and extreme temperature
events could disrupt our operations or impact the efficacy
of our assets, and supporting distribution and transmission
infrastructure, leading to increased operating costs, increased
maintenance and capital expenditure, the risk of environmental
incidents and higher insurance costs or restrictions on the ability
access insurance.
•
Origin has extreme weather event preparation processes
including comprehensive seasonal readiness activities and
emergency response plans.
•
Our operational planning and design processes
incorporate extreme weather events, while investment
decisions for major growth projects incorporate potential
financial losses from natural disasters.
Time horizons: Short-term: up to three years; Medium-term: three to 10 years; Long-term: beyond 10 years
45
Operating and Financial Review
Financial risks
Financial risks are the risks that directly impact the financial performance and resilience of Origin.
Risk
Consequences
Management
Commodity
Origin has a long-term exposure to international oil, LNG and
gas prices through the sale and purchase of domestic gas,
LNG and LPG, and its investment in APLNG. Pricing can be
volatile and driven by global macroeconomic events. Downward
price movements can impact cash flow, financial performance,
reserves and asset carrying values. Some of Origin’s long-term
domestic gas purchase agreements and APLNG’s LNG sale
agreements contain periodic price reviews. Following each
review, pricing may be adjusted upwards or downwards, or it
may remain unchanged. Under the LNG SPA between APLNG
and Sinopec, either party may issue a price review notice in the
second quarter of FY25.
The prices and volumes for wholesale electricity that Origin
sources to on-sell to customers are volatile and influenced by
many factors, including generation availability, the pricing of
generation fuels (coal and gas), and weather. Fluctuations in
coal and gas prices also impact the margins of Origin's own
generation portfolio. Energy Markets also has exposures to
supplier issues and rail logistics, which could impact supply and
result in lower output or higher costs to meet customer demand.
Different commodity prices that have historically moved in a
correlated fashion may see that correlation break down. It would
be disadvantageous for Origin if the domestic wholesale energy
costs incurred by Energy Markets were high, but the international
oil and LNG prices obtained by APLNG were low.
•
Commodity exposure limits are set by the Board to
manage the overall financial exposure that Origin is
prepared to take.
•
Origin's commodity risk management process monitors
and reports performance against defined limits
in accordance with Origin’s ‘Commodity Risk
Management System’.
•
Commodity price risk is managed using various
controls, most notably financial hedging contracts
(derivatives), which are widely available for Origin’s
international commodity exposures and wholesale
electricity exposures.
•
For each periodic price and supply review, a negotiation
strategy is developed that considers external market
advice and utilises both external and in-house expertise.
Foreign exchange
and interest rates
Origin has exposures through principal debt and interest
payments associated with foreign currency and Australian dollar
borrowings, through the sale and purchase of gas, LNG and LPG,
and through its investments in APLNG and Octopus. Interest rate
and foreign exchange movements could lead to a decrease in
revenues or increased payments in Australian dollar terms.
•
Risk limits are set by the Board to manage the
overall exposure.
•
Origin’s treasury risk management process monitors and
reports performance against defined limits.
•
Foreign exchange and interest rate risks are
managed through a combination of physical positions
and derivatives.
Liquidity and
access to
capital markets
Origin’s business, prospects and financial flexibility could be
adversely affected by a failure to appropriately manage its
liquidity position, or if markets are not available at the time of any
financing or refinancing requirement.
•
Origin actively manages its liquidity position through cash
flow forecasting and maintenance of minimum levels of
liquidity as determined under Board approved limits.
Credit
and counterparty
Some counterparties may fail to fulfil their obligations (in whole
or part) under major contracts, which could impact Origin’s
revenues and business activities.
•
Counterparty risk assessments are regularly undertaken
and where appropriate, credit support is obtained to
manage counterparty risk.
•
Australian Energy Market Operator (AEMO) credit is
managed daily to ensure compliance with the market rules,
ensuring management forecast the collateral required
to continue to meet spot market obligations for all
AEMO markets.
46
Annual Report 2024
Operational risks
Operational risks arise from inadequate or failed internal processes, people or systems or from external events.
Risk
Consequences
Management
Safe and reliable
operations
Origin has exposure to reliability or major accident events
that may impact, our people, assets (including critical
infrastructure assets), our licence to operate or financial
prospects. This includes loss of containment, cyber-attack
and security incidents, unsafe operations, and natural
hazards and events that may result in harm to our people,
environmental damage, additional costs, production loss,
property damage, third party impacts, and impact to
our reputation.
A production outage or constraint, network or IT systems
outage, would affect Origin's ability to deliver electricity
and gas to its customers.
A serious incident or a prolonged outage may also damage
Origin’s financial prospects and reputation.
•
Core operations are subject to a comprehensive framework
of controls, management systems and operational performance
monitoring to manage the design, safe operations and technical
integrity of our assets and associated operational activities. Origin’s
standards and controls are designed to meet regulatory and
industry standards in all operations.
•
Origin personnel are appropriately trained and licensed to perform
their operational activities.
•
A dedicated Board Committee oversees safety and sustainability.
The Committee receives regular reporting of the highest rated
safety risks and mitigants, and reviews significant incidents and
near misses.
•
We maintain an extensive insurance program to mitigate financial
consequences by partially transferring financial risk exposure to
third parties where commercially appropriate.
Environmental
and social
An environmental incident or Origin’s failure to consider
and adequately mitigate the environmental, social
and socio-economic impacts on communities and the
environment has the potential to cause environmental
impact, community action, regulatory intervention, legal
action, reduced access to resources and markets, impacts
to Origin’s licence to operate and reputation and increased
operating costs.
Community concerns regarding environmental and social
impacts associated with our activities may also give rise
to unrest amongst community stakeholder groups and
activism which may impact the company's reputation.
A third party’s actions may also result in delay in Origin
carrying out its approved development and operational
activities. NGOs, landholders, community members and
other affected parties can seek to prevent or delay Origin’s
activities through court litigation, preventing access to
land and extending approval pathway time frames.
•
Core operations are subject to a comprehensive framework of
environmental controls, management systems and operational
performance monitoring to manage operational exposure to the
environment. Origin’s standards and controls are designed to meet
regulatory and industry standards in all operations.
•
Origin personnel are appropriately trained and licensed to perform
their operational activities.
•
Origin engages with communities to understand, mitigate and
report on environmental and social risks associated with our
projects and operations.
•
At a minimum, the management of environmental and social risks
meets regulatory requirements. Where practical, our management
extends to the improvement of environmental values and the
creation of socio-economic benefits.
•
Origin has a cultural awareness learning framework to build
awareness of Aboriginal and Torres Strait Islander cultures,
histories and achievements. Origin maintains and implements
Native Title Agreements and Cultural Heritage Management Plans
with Traditional Owners where appropriate. Engagement with
impacted groups and consideration of cultural heritage protection
is undertaken as part of ongoing operations and at project
stage gates.
•
A dedicated Board Committee oversees safety and sustainability.
The Committee receives regular reporting of the highest rated
environmental risks and mitigants, and reviews significant incidents
and near misses. The Committee also receives updates on our
engagement with Traditional Owners.
•
Origin engages with stakeholders prior to seeking relevant
approvals for its development and operational activities. This
engagement continues through the life of the project and
during operations.
Cyber security
A cyber security incident could lead to a breach of privacy,
loss of and/or corruption of commercially sensitive data,
and/or a disruption of critical business processes. This
may adversely impact customers, the Company’s business
activities and reputation and brand.
•
A cyber security strategy is in place and is regularly
updated to cater for emerging threats, security regulation and
stakeholder expectations.
•
A robust security monitoring and incident response process exists
and is exercised on a regular basis. In the event of an incident, Origin
is supported by an external incident response and forensics firm.
•
Origin undertakes regular independent security assurance to assess
the resilience of our digital channels and internal security controls.
•
Employees undertake compulsory cyber awareness training,
including how to identify phishing emails and keep data safe; and
are subject to a regular program of random testing.
47
Operating and Financial Review
Risk
Consequences
Management
APLNG gas
reserves,
resources and
deliverability
There is uncertainty about the productivity, and therefore
economic viability, of resources and developed and
undeveloped reserves. As a result, there is a risk
that actual production may vary from that estimated,
and in the longer term, that there will be insufficient
reserves to supply the full duration and volumes to meet
contractual commitments.
As at 30 June 2024 APLNG’s identified reserves and
resources are estimated to be greater than its contractual
supply commitments on a volume basis. However, given
the inherent uncertainty in forecasting future production
rates, there is a risk that the rate of gas delivery required
to meet APLNG’s committed gas supply agreements may
not be able to be met for the later years in the life of
existing contracts.
•
APLNG integrates all available subsurface data to develop insights
into regional prospectivity allowing identification and prioritisation
of plays and prospects for exploration to mature contingent and
prospective resources.
•
APLNG monitors reservoir performance and adjusts development
plans accordingly. APLNG continually takes steps to further
strengthen the supply base such as lowering costs and identifying
new plays.
•
APLNG is progressing an exploration campaign that if successful,
could increase long term supply.
•
APLNG continues to review business development opportunities
for long term gas supply, and has the ability to substitute gas or LNG
to meet contractual requirements if required.
Conduct
and compliance
Unlawful, unethical or inappropriate conduct could result
in penalties, reputational/brand damage, loss of customers
and adverse financial impacts.
Origin’s financial prospects and operations are
underpinned by our licence to operate which
requires compliance with stakeholder commitments
and expectations, regulations, and laws. For example,
requirements for dealing with vulnerable customers,
privacy, and insider trading.
Certain entities within Origin (and joint venture entities
such as APLNG) are subject to various court proceedings
and claims, as well as audits and reviews by government,
regulatory bodies or joint venture partners. In some cases,
regulatory breaches are self-reported to the applicable
regulator. In most instances, it is not possible to reasonably
predict the outcome of those matters or their impact on
the Company.
•
Origin’s people are trained on the key laws and regulations that
apply to their activities and operations or on the processes that
underpin compliance with laws and regulations.
•
Origin’s Purpose, Values, Behaviours and Code of Conduct guide
conduct and decision making across Origin.
•
All employees are trained in our Code of Conduct, and we conduct
training for insider trading, privacy and competition and consumer
law every year.
•
Conduct risk and Compliance controls specific to the different parts
of Origin’s business are the accountability of business units and are
subject to assurance activities, including internal audit.
Joint venture
Third party joint venture operators may have economic
or other business interests that are inconsistent with
Origin’s own and may take actions contrary to the
Company’s objectives, interests or standards. This may
lead to potential financial, reputational and environmental
damage in the event of a serious incident.
•
We apply a number of governance and management standards
across our various joint venture interests to provide a consistent
approach to managing them.
•
Origin actively monitors and participates in its joint
ventures through participation in their respective boards and
governance committees.
48
Annual Report 2024
7 APLNG reversion
In 2002, APLNG acquired various CSG interests from Tri-Star that
are subject to reversionary rights and an ongoing royalty in favour
of Tri-Star. If triggered, the reversionary rights require APLNG to
transfer back to Tri-Star a 45 per cent interest in those CSG interests
for no additional consideration. The reversion trigger will occur when
a calculation of the revenue from the sale of petroleum from those
CSG interests, plus any other revenue derived from or in connection
with those CSG interests, exceeds the aggregate of all expenditure
relating to those CSG interests plus interest on that expenditure,
royalty payments and the original acquisition price.
The affected CSG interests represent approximately 18 per cent of
APLNG’s 3P CSG reserves (as at 30 June 2024), and approximately
19 per cent of APLNG’s 2P CSG reserves (as at 30 June 2024).
Tri-Star served proceedings on APLNG in 2015 (‘2015 proceeding’)
claiming that reversion had been triggered. In 2017, Tri-
Star commenced separate proceedings against APLNG (‘2017
proceeding’), relating to various operating agreements among other
things. APLNG has strongly denied Tri-Star’s claims in the 2015 and
2017 proceedings and is vigorously defending those proceedings.
Since commencing these actions, Tri-Star has amended and
repleaded its claims in both proceedings on a number of occasions,
most recently in June 2024, and previously sought, unsuccessfully,
to have certain questions separately determined. APLNG has
filed amended defences and counterclaims to address the latest
amendments Tri-Star has made to its claims.
In the 2015 proceeding, Tri-Star claims that reversion occurred
on 1 November 2008, following ConocoPhillips’ investment in
APLNG, on the assertion that the equity subscription monies paid
by ConocoPhillips, or a portion of them, were revenue for purposes
of the reversion trigger. Tri-Star also claims in the alternative that
reversion occurred on or about 1 August 2022. These claims are
referred to in this document as Tri-Star’s "past reversion" claims.
Tri-Star has made other claims in the 2015 proceeding against
APLNG relating to other aspects of the reversion trigger calculation
(including as to the calculation of interest, calculation of revenue
and the nature and quantum of APLNG’s expenditures that can
be included), the calculation of the royalty payable by APLNG to
Tri-Star, rights in respect of infrastructure, and claims relating to gas
sold by APLNG following the alleged reversion dates.
If Tri-Star’s past reversion claims are successful, then Tri-Star may
be entitled to an order that reversion occurred on 1 November
2008. If the court determines that reversion has occurred, then
APLNG may no longer have access to the reserves and resources
that are subject to Tri-Star’s reversionary interests and may need
to source alternative supplies of gas (including from third parties)
to meet its contracted commitments. There are also likely to be a
number of further complex issues that would need to be resolved
as a consequence of any such finding in favour of Tri-Star. These
matters will need to be determined by the court (either in the current
or in separate proceedings) or by agreement between the parties,
and include:
•
the terms under which some of the affected CSG interests will be
operated where currently there are no joint operating agreements
in place;
•
the amount of Tri-Star’s contribution to the costs incurred by
APLNG in exploring and developing the affected CSG interests
between the date of reversion and the date of judgment, which
APLNG has stated in its amended defence and counter-claim are
in the order of $5.51 billion (as at 30 June 2023), if reversion
occurred on 1 November 2008;
•
whether Tri-Star would have sold the affected CSG interests
in 2008 or 2009 (as alleged by Tri-Star) and, if so, what
compensation might be recoverable for that ‘lost opportunity’
(Tri-Star’s estimate of this claim is $409 million, on Tri-Star's
assumption that it is not liable to pay any of the costs incurred by
APLNG in exploring and developing the affected CSG interests
between the date of reversion and the date of judgment);
•
the consequences of APLNG having dealt with the affected CSG
interests between the date of past reversion and the date of
judgment, including the gas produced from them. In this regard,
Tri-Star has claimed:
–
‘equitable compensation’, which Tri-Star asserts is to be
assessed by reference to the ‘market value’ of the gas
produced from the affected CSG interests since the alleged
reversion, either as at the date of trial or as at the date the gas
was allegedly sold by APLNG:
–
for an alleged 1 November 2008 reversion, Tri-Star’s
asserted estimate of that ‘market value’ is approximately:
–
$13.01 billion (based on a wholesale domestic gas
spot price of $12.97 per GJ) less processing and
transportation costs; or
–
alternatively, $9.25 billion (based on Tri-Star’s
calculation of historical wholesale domestic gas market
prices) less processing and transportation costs, plus
compound interest; or
–
for an alleged 1 August 2022 reversion, Tri-Star’s asserted
estimate of that ‘market value’ is approximately:
–
$1.06 billion (based on a wholesale domestic gas
spot price of $12.97 per GJ) less processing and
transportation costs; or
–
alternatively, $1.36 billion (based on Tri-Star’s
calculation of historical wholesale domestic gas market
prices) less processing and transportation costs, plus
compound interest.
Tri-Star does not quantify the deduction for processing and
transportation costs for either scenario; or
•
alternatively, an ‘account’ of the profits earned by APLNG or its
affiliates from the alleged sale of gas produced from the affected
CSG interests, which Tri-Star asserts is to be calculated as the
revenue received by APLNG or its affiliates, less the costs which
APLNG or its affiliates establish should be taken into account in
the calculation of the profits. Tri-Star’s claim asserts that:
–
since 1 November 2008, its estimate of that revenue received,
calculated by reference to the sale of gas as LNG and gas
to domestic customers, is approximately $9.16 billion (as at
31 March 2023); and
–
since 1 August 2022, its estimate of that revenue received,
calculated by reference to the sale of gas as LNG and gas
to domestic customers, is approximately $1.41 billion (as at
31 March 2023).
Tri-Star does not quantify in its claim the costs necessarily expended
by APLNG or its affiliates to produce and sell the gas and LNG which
generated that alleged revenue.
There are presently a number of uncertainties as to the quantum of
these claims, if they are able to be established by Tri-Star, including
the amount of costs to be deducted, changes to the amount claimed
to account for sales of gas up to the date of trial and the prevailing
relevant gas prices at, and ahead of, that date.
•
if reversion occurred:
–
the extent of the reversionary interests, principally with
respect to Tri-Star’s ownership of, and/or rights to use or
access, certain project infrastructure; and
–
the repayment by Tri-Star of the ongoing royalty which
has been paid by APLNG since reversion, resulting (in the
49
Operating and Financial Review
premises of Tri-Star’s claim) from APLNG’s mistake as to the
occurrence of the reversion trigger.
If APLNG is successful in defending Tri-Star’s past reversion claims in
the 2015 proceeding, the potential for reversion to otherwise occur
in the future in accordance with the reversion trigger will remain.
In the 2017 proceeding, Tri-Star makes a number of claims
relating to:
•
the nature and scope of the obligations of APLNG as operator
pursuant to the CSG joint operating agreements;
•
Tri-Star’s ownership of, and/or rights to use or access, certain
project infrastructure; and
•
APLNG’s entitlement as operator to charge (both historically and
in the future) certain categories of costs under the relevant CSG
joint operating agreements.
Origin expects that the parties will need to prepare further pleadings
(replies and rejoinders). Once that process is finalised, the Court will
make further orders for the conduct of the two proceedings.
Before the proceedings are set down for trial, the Court would
ordinarily order a number of procedural steps to be completed by
the parties, including document disclosure, evidence preparation
and exchange and pre-trial mediation. The process that will be
followed in the 2015 and 2017 proceedings (and the procedural
timetable) will depend on the decisions of the Court and is difficult
to predict at this stage.
If APLNG is not successful in defending all or some of the claims
being made in the proceedings by Tri-Star, APLNG’s financial
performance may be materially adversely impacted and the amount
and timing of cash flows from APLNG to its shareholders, including
Origin, may be significantly affected.
50
Annual Report 2024
8 Important information
Forward looking statements
This Operating and Financial Review (OFR) contains forward looking
statements, including statements of current intention, statements
of opinion and predictions as to possible future events and future
financial prospects. Such statements are not statements of fact and
there can be no certainty of outcome in relation to the matters to
which the statements relate. Forward looking statements involve
known and unknown risks, uncertainties, assumptions and other
important factors that could cause the actual outcomes to be
materially different from the events or results expressed or implied
by such statements, and the outcomes are not all within the control
of Origin. Statements about past performance are not necessarily
indicative of future performance.
This OFR also contains forward looking statements in the form
of scenario analysis. These are based on management’s current
expectations and reflect judgments, assumptions, estimates and
other information available as at the date of this OFR and/or the
date of Origin’s planning processes or scenarios analysis processes.
There are inherent limitations with scenario analysis and it is difficult
to predict which, if any, of the scenarios might eventuate. Scenarios
do not constitute definitive outcomes or probabilities, and scenario
analysis relies on assumptions that may or may not be, or prove to
be, correct and may or may not eventuate. Scenarios may also be
impacted by additional factors to the assumptions disclosed.
Neither the Company nor any of its subsidiaries, affiliates and
associated companies (or any of their respective officers, employees
or agents) (the ‘Relevant Persons’) makes any representation,
assurance or guarantee as to the accuracy, completeness or
likelihood of fulfilment of any forward looking statement any
assumption on which a forward looking statement is based. The
forward looking statements in this OFR reflect views held only at
the date of this report and except as required by applicable law, the
Relevant Persons disclaim any obligation or undertaking to publicly
update any forward looking statements whether as a result of new
information or future events.
Information on likely developments in the Company’s business
strategies, prospects and operations for future financial years
and the expected results that could result in unreasonable
prejudice to the Company (for example, information that is
commercially sensitive, confidential or could give a third party a
commercial advantage) has not been included in this OFR. The
categories of information omitted include forward-looking estimates
and projections prepared for internal management purposes,
information regarding the Company’s operations and projects,
which are developing and susceptible to change, and information
relating to commercial contracts.
Non-IFRS financial measures
This OFR and Directors’ Report refers to Origin’s financial
results, including Origin’s Statutory Profit and Underlying Profit.
Origin’s Statutory Profit contains a number of items that when
excluded provide a different perspective on the financial and
operational performance of the business. Income Statement
amounts, presented on an underlying basis such as Underlying
Profit, are non-IFRS financial measures, and exclude the impact of
these items consistent with the manner in which senior management
reviews the financial and operating performance of the business.
Each underlying measure disclosed has been adjusted to remove
the impact of these items on a consistent basis. A reconciliation and
description of the items that contribute to the difference between
Statutory Profit and Underlying Profit is provided in Section 4.1 of
this OFR.
Certain other non-IFRS financial measures are also included in
this OFR. These non-IFRS financial measures are used internally
by management to assess the performance of Origin’s business
and make decisions on allocation of resources. Further information
regarding the non-IFRS financial measures is included in the
Glossary of this OFR. Non-IFRS financial measures have not been
subject to audit or review. Certain comparative amounts from the
prior corresponding period have been re-presented to conform to
the current period's presentation.
Emissions data
Origin reports its Scope 1 and Scope 2 emissions under the
National Greenhouse and Energy Reporting Act, 2007 (NGER)18.
Origin calculates Scope 3 emissions based on the Greenhouse
Gas Protocol’s Corporate Value Chain (Scope 3) Accounting and
Reporting Standard19 and Scope 3 guidance documents20.
Due to the inherent uncertainty and limitations in measuring
emissions under the calculation methodologies used in the
preparation of such data, all emissions data or references to
emissions volumes (including ratios or percentages) in this
presentation are estimates. Where data is not available due to
timing, Origin applies a reasonable estimation methodology. Where
applicable, Origin revises prior year data to update prior estimates
and align with external reporting requirements such as NGER.
Compliance matters
Certain entities within the Group (and joint venture entities such
as APLNG) are subject to various court proceedings and claims
as well as audits and reviews by government, regulatory bodies or
other joint venture partners. In some cases regulatory breaches are
self-reported to the applicable regulator. In most instances, it is not
possible to reasonably predict the outcome of these matters or their
impact on the Group.
18 National Greenhouse and Energy Reporting NGER (cleanenergyregulator.gov.au)
19 Corporate Value Chain (Scope 3) Standard | Greenhouse Gas Protocol (ghgprotocol.org)
20 Scope 3 Calculation Guidance | Greenhouse Gas Protocol (ghgprotocol.org)
51
Directors’ Report
Directors’ Report
For the year ended 30 June 2024
In accordance with the Corporations Act 2001 (Cth), the Directors
of Origin Energy Limited (Company) report on the consolidated
entity Origin Energy Group (Origin), being the Company and its
controlled entities for the year ended 30 June 2024.
The Operating and Financial Review and Remuneration Report form
part of this Directors’ Report.
1 Principal activities, review of
operations and significant change in
state of affairs
During the year, the principal activity of Origin was the operation of
energy businesses including exploration and production of natural
gas, electricity generation, wholesale and retail sale of electricity and
gas, and sale of liquefied natural gas. There have been no significant
changes in the nature of those activities during the year and no
significant changes in the state of affairs of the Company during
the year.
The Operating and Financial Review, which forms part of this
Directors’ Report, contains a review of operations during the
year and the results of those operations, the financial position of
Origin, its business strategies, and prospects for future financial
years, including likely developments in Origin’s operations in future
financial years and the expected results of those operations.
2 Events subsequent to balance date
Other than the matters described below, no matters or
circumstances have arisen since 30 June 2024, which have
significantly affected, or may significantly affect, the Company’s
operations, the results of those operations or the Company’s state of
affairs in future financial years.
Eraring battery investment
On 24 July 2024, the Group entered into an agreement for the
supply and construction of the second stage development of a
large-scale battery at Eraring Power Station, committing to an
investment of approximately $406 million.
Dividends
On 15 August 2024, the Directors determined a fully franked final
dividend of 27.5 cents per share, on ordinary shares. The dividend
will be paid on 27 September 2024.
APLNG dividends
On 16 July 2024, the directors of APLNG determined fully
franked dividends to be paid to shareholders. Origin received fully
franked dividends from APLNG of US$72 million (A$110 million) on
29 July 2024.
On 13 August 2024, the directors of APLNG determined further
fully franked dividends to be paid to shareholders. Origin expects to
receive US$99 million on 28 August 2024.
Octopus Energy
On 31 July 2024, Octopus Energy repaid £889 million
(~A$1,779 million) of the funding agreement entered into as part
of the acquisition of Bulb Energy.
3 Dividends
a. Dividends paid during the year by the Company were as follows:
$ million
20 cents per ordinary share, fully franked, for the full year
ended 30 June 2023, paid on 29 September 2023
345
27.5 cents per ordinary share, fully franked, for the half
year ended 31 December 2023, paid on 28 March 2024
474
b. In respect of the current financial year, the Directors have
determined a final dividend as follows:
$ million
27.5 cents per ordinary share, fully franked, for the full
year ended 30 June 2024 payable 27 September 2024
474
The Dividend Reinvestment Plan (DRP) will not operate for the FY24
final dividend.
4 Directors and Company Secretary
The Directors of the Company at any time during or since the end
of the financial year, their qualifications, experience and special
responsibilities are set out on pages 6 and 7. The qualifications and
experience of the Company Secretary is also set out below:
Scott Perkins
Independent Non-executive Chair
Frank Calabria
Managing Director and Chief Executive Officer
Ilana Atlas AO
Independent Non-executive Director
Maxine Brenner
Independent Non-executive Director
Greg Lalicker
Independent Non-executive Director
Mick McCormack
Independent Non-executive Director
Steven Sargent
Independent Non-executive Director
Nora Scheinkestel
Independent Non-executive Director
Dame Joan Withers DNZM
Independent Non-executive Director
Helen Hardy
Company Secretary
Helen Hardy joined Origin in March 2010. She was previously
General Manager, Company Secretariat of a large ASX-listed
company, and has advised on governance, financial reporting
and corporate law at PwC and Freehills. Helen is a Chartered
Accountant, Chartered Secretary and a Graduate Member of the
Australian Institute of Company Directors. Helen is a Director of the
Governance Institute of Australia and a member of its Legislative
Review Committee. She holds a Bachelor of Laws and a Bachelor of
Commerce from the University of Melbourne, a Graduate Diploma in
Applied Corporate Governance and is admitted to legal practice in
New South Wales and Victoria.
52
Annual Report 2024
5 Directors’ meetings
The number of Directors’ meetings, including Board committee meetings, and the number of meetings attended by each Director during the
financial year, are shown in the table below:
Scheduled
Additional
Audit
Safety &
Sustainability Nomination
Remuneration,
People &
Culture
Risk
Directors
H1
A2
H1
A2
H1
A2
H1
A2
H1
A2
H1
A2
H1
A2
I Atlas
8
8
9
9
-
-
-
-
-
-
4
4
5
5
M Brenner
8
8
9
8
4
4
5
5
2
2
-
-
5
5
F Calabria
8
8
9
9
-
-
5
5
-
-
-
-
-
-
G Lalicker
8
8
9
9
-
-
5
5
-
-
-
-
-
-
M McCormack
8
8
9
9
4
4
5
5
-
-
4
4
-
-
S Perkins
8
8
9
9
4
4
5
5
2
2
4
4
5
5
S Sargent
8
7
9
9
-
-
5
5
2
2
4
4
5
5
N Scheinkestel
8
8
9
9
4
4
-
-
2
2
-
-
5
5
J Withers
8
8
9
8
4
4
-
-
2
2
-
-
5
5
1
Number of meetings held during the time that the Director held office or was a member of the Committee during the year.
2 Number of meetings attended.
The Board held eight scheduled meetings and nine additional meetings to deal with urgent matters. In addition, the Board also held briefings
and workshops on specific topics and conducted site visits of Company operations at various sites and met with operational management
during the year.
From time to time, the Board delegates its authority to non-standing committees of Directors to consider matters of particular relevance or
urgency. In the 12 months to 30 June 2024, eight such additional Board committee meetings were held.
6 Directors’ interests in shares, Options and Rights
The relevant interests of each Director as at 30 June 2024 in the shares and Rights over such instruments issued by the Company and other
related bodies corporate at the date of this report are set out below. There are no outstanding options over shares.
Director
Ordinary shares held
directly and indirectly
Restricted
shares
Performance Share Rights
(PSR) over ordinary shares
Restricted Share Rights
(RSR) over ordinary shares
I Atlas
50,000
-
-
-
M Brenner
28,367
-
-
-
F Calabria
940,017
472,417
508,2471
557,2431
G Lalicker
100,000
-
-
-
M McCormack
100,000
-
-
-
S Perkins
80,000
-
-
-
S Sargent
41,429
-
-
-
N Scheinkestel
33,365
-
J Withers
29,980
-
-
-
1
The exercise price for Rights is nil.
No Director other than the Managing Director and Chief Executive Officer participates in the Company’s Equity Incentive Plan.
53
Directors’ Report
Securities granted by Origin
Non-executive Directors do not receive Options or Rights as part of their remuneration. Non-executive Directors are eligible to participate in
the Non-executive Director Share Plan (NEDSP) which is a fee sacrifice plan. During the year, no new participants entered the NEDSP and no
fees were sacrificed by the existing participant in FY24.
The following securities were granted to the five most highly remunerated officers (other than Directors) of the Company during the year
ended 30 June 2024:
Restricted
Shares
(Vested LTI)1
Performance
Share Rights
(PSR) over
ordinary shares
Restricted
Share Rights
(RSR) over
ordinary shares
Matching Share
Plan Rights2
Employee Share
Plan Shares
J Briskin
89,695
23,912
-
-
111
G Jarvis
91,687
24,127
-
-
-
A Lucas
73,151
22,525
-
-
-
A Thornton
27,905
23,003
-
-
-
L Tremaine
101,355
26,734
-
-
111
1
Allocated on vesting of Performance Share Rights and Restricted Share Rights awarded in prior periods as part of the Company’s long term incentive arrangements.
2 Matching Share Plan Rights were granted in accordance with the Employee Share Plan rules and disclosed to the ASX at the time of grant. The Employee Share Plan is available
to all eligible Origin employees. The Managing Director and Chief Executive Officer is not eligible to participate in the Employee Share Plan. The Employee Share Plan was
suspended from April 2023 until February 2024. Refer to Section 3.6 of the Remuneration Report for further details.
The awards of Restricted Shares and Performance Share Rights were made in accordance with the Company’s Equity Incentive Plan as part
of the relevant Executive’s remuneration. Further details on Rights granted during the financial year, and unissued shares under Rights, are
included in Section 7 of the Remuneration Report.
No Options or Rights were granted since the end of the financial year.
Origin shares issued on the exercise of Options and Rights
Options
No Options granted under the Equity Incentive Plan were exercised during or since the year ended 30 June 2024, so no ordinary shares in
Origin were issued as a result.
Rights
1,463,093 ordinary shares of Origin were allocated from the Origin Energy Limited Employee Share Trust during the year ended 30 June
2024 on the vesting and exercise of PSRs and RSRs under the Equity Incentive Plan, and vesting and exercise of Matching Share Plan Rights
granted under the Employee Share Plan. No amounts were payable on the vesting of these PSRs, RSRs and Matching Share Plan Rights and,
accordingly, no amounts remain unpaid in respect of any of those shares.
Since 30 June 2024, 163 ordinary shares were allocated from the Origin Energy Limited Employee Share Trust on the vesting of Matching
Share Plan Rights granted under the Employee Share Plan.
All shares in the Origin Energy Limited Employee Share Trust were purchased on market. During the reporting period, 5,280,000 Origin shares
were purchased on-market for the purpose of Origin’s employee incentive plans. The average price per share purchased was $10.41.
7 Environmental regulation and performance
The Company’s operations are subject to environmental regulation under Commonwealth, State and Territory legislation. For the year ended
30 June 2024, the Company notified 21 environmental reportable incidents to the relevant regulators (Integrated Gas: 10 and Energy
Supply and Operations: 11). All of these incidents resulted in minor environmental consequences with the appropriate level of investigation
undertaken. All incidents are investigated, and lessons learned captured and shared across the Company. Integrated Gas received two Penalty
Infringement Notices, two Formal Warning Letters and two Matter of Concern Letters as a result of these incidents.
During the year ended 30 June 2024, Integrated Gas received two Prosecutions, one Penalty Infringement Notice, one Formal Warning Letter
and three Compliance Notices from the Department of Environmental Science and Department of Resources in Queensland for incidents and
other compliance related matters prior to FY24.
54
Annual Report 2024
8 Indemnities and insurance for
Directors and Officers
Under its Constitution, the Company may indemnify current and
past Directors and Officers for losses or liabilities incurred by them as
a Director or Officer of the Company or its related bodies corporate
to the extent allowed under law. The Constitution also permits
the Company to purchase and maintain a Directors’ and Officers’
insurance policy. No indemnity has been granted to an auditor of the
Company in their capacity as auditor of the Company.
The Company has entered into agreements with current Directors
and certain former Directors whereby it will indemnify those
Directors from all losses or liabilities in accordance with the terms of,
and subject to the limits set by, the Constitution.
The agreements stipulate that the Company will meet the full
amount of any such liability, including costs and expenses to
the extent allowed under law. The Company is not aware of any
liability having arisen, and no claim has been made against the
Company during or since the year ended 30 June 2024 under
these agreements.
During the year, the Company has paid insurance premiums in
respect of Directors’ and Officers’ liability, and legal expense
insurance contracts for the year ended 30 June 2024.
The insurance contracts insure against certain liability (subject to
exclusions) of persons who are or have been Directors or Officers of
the Company and its controlled entities. A condition of the contracts
is that the nature of the liability indemnified and the premium
payable not be disclosed.
9 Auditor independence
There is no former partner or director of EY, the Company’s auditors,
who is or was at any time during the year ended 30 June 2024
an officer of the Origin Energy Group. The auditor’s independence
declaration for the financial year (made under section 307C of
the Corporations Act 2001 (Cth)) is attached to and forms part of
this Report.
10 Non-audit services
The amounts paid or payable to EY for non-audit services provided
during the year was $1,046,000 (shown to the nearest thousand
dollars). Amounts paid to EY are included in note G7 to the full
financial statements.
Based on written advice received from the Audit Committee Chair
pursuant to a resolution passed by the Audit Committee, the
Board has formed the view that the provision of those non-audit
services by EY is compatible with, and did not compromise, the
general standards of independence for auditors imposed by the
Corporations Act 2001 (Cth).
The Board’s reasons for concluding that the non-audit services
provided by EY did not compromise its independence are:
•
all non-audit services provided were subjected to the Company’s
corporate governance procedures and were either below the
pre- approved limits imposed by the Audit Committee or
separately approved by the Audit Committee;
•
all non-audit services provided did not, and do not, undermine
the general principles relating to auditor independence as they
did not involve reviewing or auditing the auditor’s own work,
acting in a management or decision making capacity for the
Company, acting as an advocate for the Company or jointly
sharing risks and rewards; and
•
there were no known conflict of interest situations nor any
other circumstance arising out of a relationship between Origin
(including its Directors and Officers) and EY which may impact
on auditor independence.
11 Proceedings on behalf of the
Company
The Company is not aware of any proceedings being brought on
behalf of the Company, nor any applications having been made in
respect of the Company under section 237 of the Corporations Act
2001 (Cth).
12 Rounding of amounts
The Company is an entity to which ASIC Corporations (Rounding
in Financial/ Directors’ Reports) Instrument 2016/191 applies and,
in accordance with that instrument, amounts in the financial report
and Directors’ Report have been rounded off to the nearest million
dollars unless otherwise stated.
13 Remuneration
The Remuneration Report forms part of this Directors’ Report.
55
Remuneration Report
Remuneration
Report
For the year ended 30 June 2024
Letter from the Chair of the Remuneration, People and Culture Committee
Dear Shareholder
On behalf of the Remuneration, People and Culture Committee (RPCC) and the Board, I am pleased to present the Remuneration Report
for FY24.
The Company delivered strong financial and non-financial results in FY24 across all its businesses. These results were achieved against the
backdrop of a proposed scheme of arrangement (the Scheme) from a Consortium consisting of Brookfield and MidOcean Energy (an LNG
company managed by EIG) to acquire all the issued shares in the Company. The Scheme Implementation Deed (SID) was executed on
27 March 2023 and its terms were binding until it was terminated following a meeting of shareholders on 4 December 2023 where the
acquisition was not approved by the requisite majority. The operating and financial constraints imposed by the SID created understandable
distraction and uncertainty amongst our people. However, the CEO and leadership team remained focused on execution of the strategy and
business performance accelerated during this period. All financial metrics improved on the previous year and the performance was delivered
sustainably. Our decarbonisation strategy is on track and we are investing in the experience our customers have with the Company. The
business is positioned well for the next phase of the energy transition.
Remuneration outcomes for FY24
Remuneration outcomes in FY24 reflected the continued strength of Origin’s operational and financial performance as summarised above and
were reflected in Total Shareholder Returns (TSR) of 36.4 per cent for the year, and 164.8 per cent over the past three years (38.4 per cent
compound annual growth rate (CAGR)).
The constraints that applied during the operation of the SID meant that new equity grants to employees to satisfy obligations arising from the
Short Term Incentive Plan (STIP) and the Long Term Incentive Plan (LTIP), could not be made. As a result, those obligations were met through
Deferred Cash arrangements, with the ultimate result that FY24 incentive outcomes represent a hybrid of deferred cash and deferred equity
arrangements. Given the unique circumstances, the descriptions of the plans (sections 2.1, 2.2, 3.4 and 3.5) refer to FY25 in addition to FY24
to provide a full and proper description of the ongoing plans.
In summary:
•
Fixed Remuneration (FR): Following an annual benchmarking review, increases in FR - ranging between 3.5 and 5.5 per cent - were applied
to Executive Key Management Personnel (KMP) early in FY24.
•
STIP: Scorecard outcomes for FY24 STIP were 73.9 per cent of the maximum for the CEO (FY23: 75.3 per cent), and ranged from 69.5 to
87.0 per cent for Other Executive KMP (FY23: 74.0 to 90.2 per cent). The aggregate Executive KMP outcome was 76.7 per cent of the
maximum (FY23: 79.3 per cent), reflecting the strong and above-target results for the year. Half of the award will be paid in cash and half
will be deferred as Restricted Shares (RSs) in September 2024. Further details are provided in sections 4.2.1 to 4.2.3.
•
LTIP vesting: As foreshadowed in the FY23 Remuneration Report, Long Term Incentive (LTI) awards granted in November 2020 were
tested during the year and vested in full at the end of August 2023, subject to a further restriction and holding lock until August 2025. Half
of the grant was in Performance Share Rights (PSRs) subject to a financial market condition (TSR relative to the S&P/ASX 50 reference
group) for the performance period 1 July 2020 to 30 June 2023. Origin’s TSR over the period was independently assessed at 74.04 per
cent, ranking it at the 83rd percentile, and equivalent to 20.3 per cent p.a. CAGR; therefore, this part of the grant vested in full. The other
half of the grant was in Restricted Share Rights (RSRs) subject to a Board assessment over the same performance period across a holistic
suite of non-financial metrics (detailed in section 3.5), reflecting the Company’s underlying health, performance and sustainability. The
Board review was conducted during August 2023 and concluded that management performance across the suite was strong and without
any material deviations from its expectations. It therefore approved full vesting for that part of the grant, one third of which vested in August
2023 (the remaining two-thirds to vest in August 2024 and August 2025). Further details are provided in section 4.2.4.
•
LTI awards: At the time of determining the vesting of the LTI awards in August 2023, the SID prevented the granting of share rights, and
(as outlined in sections 2.1 and 3.5) the use of a TSR hurdle was impractical. Accordingly, and as foreshadowed in the FY23 Remuneration
Report, an award was made at 75 per cent of the normal face-value allocation, in the form of deferred cash wholly subject to the conditions
that normally attach to RSRs. This award limited the potential value to the ‘risked value of LTI' (section 3.2). In February 2024 (following
the termination of the SID on 7 December 2023), an additional award was made at 25 per cent of the normal face-value allocation. This
was in the form of PSRs subject to the normal Relative TSR (RTSR) condition (as set out in section 2.1). This restored the total allocations
to their normal face-value amount (and normal maximum potential value).
Remuneration for FY25
Fixed Remuneration and Non-executive Director fees
Market-determined FR across the Company as a whole is expected to increase by around 3.6 per cent during FY25, in addition to the 0.5 per
cent uplift for superannuation effective 1 July 2024 (total uplifts are around 4.1 per cent). Increases for Executive KMP, which are sensitive to
role comparators in ASX peer group companies, will be similar. The increase for the CEO, inclusive of the superannuation change, will be 3.7
per cent.
The Board base fees, the committee structure and committee fees, have all remained unchanged since FY20. For FY25, the number of Board
committees will be reduced by one as a result of a having a single Audit and Risk Committee, and increasing the focus of other committees
56
Annual Report 2024
on the more specialised risks within their mandates. New fee levels will be effective for FY25, which (on a like-for-like participation basis) will
represent an increase in Non-executive Director (NED) remuneration of approximately 3.7 per cent.
Long Term Incentive Plan vesting
LTI awards granted in August and October 2021 have been tested and will vest in full at the end of August 2024, subject to further restriction
and a holding lock until August 2026. Half of the grant was in PSRs, subject to a financial market condition (TSR relative to the S&P/ASX 50
peer group) for the performance period 1 July 2021 to 30 June 2024. Origin’s TSR was independently assessed to rank at number one (P100,
with a TSR of 164.8 per cent, equivalent to 38.4 per cent p.a. CAGR) and will, therefore, vest in full. The other half of the award was in RSRs,
subject to performance across a suite of non-financial metrics (section 3.5) measured over the same performance period and assessed by the
Board to vest at 100 per cent. The vest is progressive, with the first third of the RSRs vesting at the end of August 2024, the second third in
August 2025 and the final third in August 2026.
Also due to vest at the end of August 2024 is the second of the three-stage progressive vest of RSRs awarded in November 2020, for which
the vesting was determined in the prior year to be 100 per cent. In the absence of any materially significant changes having caused a further
review, this second stage will vest in full.
Changes in FY25
Two areas for change are noted for FY25.
(i)
Framework refinement. Periodically, the RPCC considers the remuneration framework’s continuing appropriateness in terms of Origin’s
strategies and priorities. It also considers the framework’s effectiveness and capacity to provide realisable remuneration that attracts and
keeps the right people, drives their focus and rewards execution.
Following a comprehensive review, the Board has integrated the Minimum Shareholding Requirement (MSR) policy for executives, with
the STIP and LTIP deferral operations to strengthen the focus on building a significant shareholding within the first four to five years of
executive employment, and, once that level has been achieved, to provide a more continuous and flexible release pattern. LTIP remains
deferred for up to five years. Until such time that the executive reaches their MSR, the whole of vested awards remains fully locked, and
they are cliff-released at year five. Where an executive has exceeded their MSR requirement, the release is progressive, at years three, four
and five (equally). Similarly, the two-year deferral remains applicable to the deferred element of STIP. However, if the executive is above
the MSR requirement, half of the deferred amount is released after the first year and half at the end of the second year. This will apply to
equity awards granted in and from FY25, with the MSR position tested prior to each grant.
(ii) One-off elevated LTI allocations for FY25 only. Origin begins FY25 with a deepened market appreciation of the strength of its assets
and the performance of its leadership team and key executives. Given the critical momentum the team carries into the next phase
of the energy transition, the Board has determined it is appropriate to make higher than normal-course-of-business LTI allocations to
selected executives. The elevated allocation (which approximates an allocation of half the normal annual allocation) will be allocated to 16
executives (including the Executive Leadership Team (ELT)) during FY25 at the same time as the normal awards (in August and October),
subject to the normal LTIP conditions and arrangements noted in section 3.5.
The Board’s view is that overall remuneration outcomes in FY24 and recent years have appropriately aligned with business performance and
shareholder experience and that the remuneration framework is flexible and fit for purpose, requiring occasional optimisation to deal with the
very dynamic business environment before us.
Steven Sargent
Chair, Remuneration, People and Culture Committee
57
Remuneration Report
Report structure
The Remuneration Report for the year ended 30 June 2024 (FY24) forms part of the Directors’ Report. It has been prepared in accordance
with the Corporations Act 2001 (Cth) (the Act) and Accounting Standards, and has been audited as required by section 308(3C) of the Act.
The Remuneration Report is divided into the following sections.
1.
Key Management Personnel
2. Remuneration link with Company performance and strategy
3. Remuneration framework details
4. Company performance and remuneration outcomes
5. Governance
6. Non-executive Director fees
7.
Statutory tables and other disclosures
1 Key Management Personnel
The Remuneration Report discloses the remuneration arrangements and outcomes for the people listed below, who are KMP, as defined by
AASB 124 Related Party Disclosures. Members of the RPCC are identified in the last column.
Name
Role
Appointed
Term as KMP
in FY24
RPCC
Non-executive
Board
S Perkins1
Chair, Independent
20-Oct-20
Full
✓
I Atlas
Independent
19-Feb-21
Full
✓
M Brenner
Independent
15-Nov-13
Full
G Lalicker
Independent
1-Mar-19
Full
M McCormack
Independent
18-Dec-20
Full
✓
S Sargent
Independent
29-May-15
Full
Chair
N Scheinkestel
Independent
4-Mar-22
Full
J Withers
Independent
21-Oct-20
Full
Executive
F Calabria
Chief Executive Officer (CEO)
19-Oct-16
Full
L Tremaine2
Chief Financial Officer (CFO)
10-Jul-17
Full
J Briskin
Executive General Manager, Retail
5-Dec-16
Full
G Jarvis
Executive General Manager, Energy Supply
and Operations
5-Dec-16
Full
A Thornton
Executive General Manager, Integrated Gas
1-Nov-21
Full
1
Mr Perkins was appointed to the Board on 1 September 2015.
2 Mr Tremaine’s future retirement was announced on 1 February 2024. He stepped down from the role of CFO on 30 June 2024, and ceased employment at the end of July
2024. As announced on 11 April 2024, Mr Anthony Lucas was appointed to the CFO role effective 1 July 2024.
The term 'Other Executive KMP' (abbreviated as 'Other in tables and charts) refers to Executive KMP excluding the CEO.
‘Executive team’ is a broader reference to the ELT.
58
Annual Report 2024
2 Remuneration link with Company performance and strategy
2.1 Overview of remuneration framework
Our remuneration framework is designed to support the Company’s strategy and to reward our people for its successful execution. It is based
on three principles, which are summarised in the following table.
Remuneration
component
Principles
and purpose
Process
Delivery and timeline
Fixed
Remuneration
(FR)
To attract and
retain the right
people and pay
fairly and
competitively.
Considers the size and complexity of the role, and the
skills and experience required to be successful in it.
Market-remunerated roles are generally
benchmarked to the median (between P40 and
P60) of corresponding roles in organisations with
comparable activity and scale, and with which Origin
competes for talent.
Cash salaries, employer contributions to
superannuation and salary sacrifice benefits paid
continuously throughout each year.
Variable Remuneration
(VR)
Short
Term
Incentive
Plan
(STIP)
To drive focus
and
discretionary
effort.
Performance is tested at the end of a one-year
performance period.
It is measured and assessed against a balanced
scorecard, usually comprising up to 10 metrics
(accounting for 60 per cent financial and 40 per cent
strategic priorities), each with targets set at threshold,
expected (target) and stretch (maximum) levels.
The overall scorecard outcome for each participant
determines the proportion of the opportunity that
will be paid (up to a maximum of 100 per cent
of the executive’s opportunity level). Threshold
performance represents 20 per cent of stretch goals,
and target represents 60 per cent of stretch.
For Executive KMP, the target opportunity level
is equivalent to 100 per cent of FR. For other
members of the ELT, it is 75 per cent of FR. The
maximum potential (requiring stretch outcomes for
all scorecard items) is 167 per cent and 125 per cent of
FR, respectively.
Results are subject to Board overview and discretion
to adjust formulaic outcomes up (but no higher than
the maximum opportunity level) or down (including
to zero).
Awarded annually; 50 per cent in cash payable in
September following the end of the financial year, and
50 per cent deferred as described below.
The whole of the STI award is forfeited for resignation/
cause prior to payment, and the deferred element is
forfeited for resignation/cause prior to release. Both
elements are subject to malus and clawback.
The deferred element awarded in August 2023 (in
respect of FY23 performance) was in the form of
Deferred Cash due to be paid in August 2025.
The deferred element to be awarded in August 2024
(in respect of FY24 performance) will be in the form
of RSs, restricted for two years (half of which may
be released after one year where the executive has
exceeded their MSR requirement).
Long Term
Incentive
Plan
(LTIP)
To encourage
focus on
long-term
performance
and
sustainability,
and to build
executive share
ownership in
the business.
Annual grants are made to executives based on their
capacity to influence long-term outcomes.
Awards are granted shortly after the commencement
of a three-year performance period, with vested
rights subject to deferral periods up to a further two
years (five years total deferral) (see section 3.4).
The standard allocation level is role-based and
expressed as a face-value amount. For the CEO, it
is equivalent to 120 per cent FR (with a risked value1
of 90 per cent FR). For Other Executive KMP and
other members of the ELT, it is 80 per cent FR (with
a risked value of 60 per cent FR). Prior to allocation,
the Board conducts an annual performance review.
Following the review, it may vary the individual
allocation amount downwards (including to zero)
or upwards, where exceptional circumstances make
it appropriate.
Wherever practicable, awards are made in the form
of share rights (see section 3.4). This was not possible
during the period in which the SID operated (FY24
until it was terminated on 7 December 2023).
In August 2023, at the time of making LTIP awards
for the performance period commencing 1 July 2023,
the SID was in operation. This prevented the granting
of share rights, and, further, the circumstances of the
transaction and potential delisting of the Company
made it impractical to use RTSR hurdles. Accordingly,
the awards were delivered at a level of 75 per cent of
the standard annual allocations (that is, at the risked or
expected outcome for normal awards) in the form of
Deferred Cash to vest in July 2026 subject to the non-
financial underpin conditions (see section 3.5). Shortly
after the termination of the SID, a further award in the
form of PSRs was added. This allocation represented
25 per cent of the standard annual allocations, thereby
restoring the original allocation to its full normal face-
value amount. This tranche was entirely subject to the
normal RTSR hurdle (see section 3.5) measured over
three years, from grant date to 31 December 2026,
vesting in February 2027 followed by a holding lock to
August 2028 (the same date that would have applied
if the Company had been able to award PSRs at the
normal time).
Awards made in FY25 will resume in the form of share
rights with deferral up to five years (see section 3.5).
Unvested awards are forfeited for resignation or cause.
Vested and locked awards are subject to malus. All
awards – including those vested and released – are
subject to clawback.
1
See section 3.2 for an explanation of risked value.
59
Remuneration Report
2.2 Remuneration timelines
The following chart summarises the components of executive remuneration and their relevant timelines.
It shows arrangements as they applied during FY24, and as they will apply for FY25. The unique circumstances that arose during FY24
in relation to the use of equity have resulted in a degree of hybridisation. For example, the treatment of Deferred STI arising from the
FY24 STI awards will follow the standard equity arrangements applying to FY25 and subsequent awards, whereas the LTI awards made
during FY24 were in two parts – a one-off Deferred Cash element unique to FY24 and a second equity element that followed the equity
arrangements that operated prior to execution of the SID in March 2023. As those LTI arrangements were unique, a description of the ongoing
operation of remuneration timelines requires reference to the FY25 arrangements, both in the chart below and through section 3 of this
Remuneration Report.
2.3 Board oversight
Remuneration outcomes are subject to Board oversight and strong governance controls, as set out in section 5.3. Origin believes that
observance of its values and leadership behaviours, and the quality of its relationships with its customers and the community, are inextricably
linked to the creation of shareholder value. Prior to making remuneration determinations, the full Board conducts formal reviews of
management that incorporate individual performance, risk management and leadership behaviours. The Board may adjust variable outcomes
up or down.
60
Annual Report 2024
2.4 Minimum Shareholding Requirement for Executive Key Management Personnel
A key objective of the remuneration framework is to promote employee share ownership and to encourage employees to think and act as
owners. Equity is therefore a key element of remuneration, representing generally half of STI awards and the whole of LTI awards. This is
supplemented by other share plan arrangements, including salary sacrifice, share purchase and matching plans (see section 3.7).
Executive KMP are required to build and maintain a substantial shareholding in the Company (that is, the MSR). Executives are not expected
to purchase shares to meet this requirement. The MSR operates as an additional trading restriction, which prevents the disposal of shares that
have been generated from executive share plans (other than to cover arising tax liabilities) until the MSR has been achieved and maintained.
The MSR is the market value of shares held, referenced to role-based multiples of FR. For the CEO, the multiple is 2.5 times FR, and for Other
Executive KMP, it is 1.5 times FR. Newly appointed executives have four years from the date of their first equity grant to reach their MSR
level. Table 7-4(b) shows the current Executive KMP shareholding relative to the MSR obligation as at 30 June 2024. At this time, all Executive
KMPs had comfortably exceeded their requirements.
At the commencement of each year, the requirement is expressed as a number of shares in order to simplify compliance and
administration. The annual determination considers changes in FR, changes to VR opportunity levels, vesting outcomes, the prices at
which shares have been acquired or allocated, and the current share price trajectory. Where the numeric requirement is increased, the Board
may specify the period over which the new requirement must be met. For FY25, the numeric determinations have been set at 600,000 shares
for the CEO and 167,000 shares for Other Executive KMP. Only shares (restricted and unrestricted) may be counted toward the MSR – share
rights do not count toward the obligations.
61
Remuneration Report
3 Remuneration framework details
3.1 Fixed Remuneration
FR comprises cash salary, employer contributions to superannuation and salary sacrifice benefits. It considers the size and complexity of the
role, and the skills and experience required for success in the role.
FR is reviewed annually, but increases are not guaranteed. Roles are benchmarked within a range (40th to 60th percentile) for corresponding
roles in organisations with comparable activity, complexity and scale, and those with which Origin competes for talent.1 In the absence of
special factors, new or newly promoted incumbents generally commence around the lower part of the range and move toward the higher end
of the range with time and increasing role mastery. FR may be positioned above the range where it is appropriate to reward sustained high
performance, for key talent retention or where it is necessary to attract and secure key skills in a business-critical role.
3.2 Variable Remuneration
VR enables pay to be aligned with performance outcomes. VR target pay is benchmarked to represent the satisfaction of expected
performance. VR is adjusted upwards where outcomes exceed target expectation, and it is reduced (including to zero) where performance
outcomes fall below target.
VR comprises the total of STI and LTI:
•
The minimum VR is zero, where no STI or LTI is awarded, or where the STI scorecard outcome is zero and LTI is not awarded or all of it fails
to vest, or where discretion is exercised to reduce such awards or vesting outcomes to zero.
•
The target VR represents the total STI when it is awarded at the target level (60 per cent of the maximum), plus the risked value of LTI of
the share rights awarded at face value2 (the present-day value of the probabilistic vesting outcome). Where LTI awards are in the form of
equity (share rights), the risked value of the PSRs, subject to an RTSR performance condition, is 50 per cent of face value (supported by
actuarial grant date valuations over time). The risked value of RSRs is considered to be 100 per cent of face value. With the same number
of PSRs and RSRs awarded, the overall risked value is therefore 75 per cent of the face value. Accordingly, target VR = (STI at 60 per cent
of the maximum) + (LTI at 75 per cent of face-value allocation).
•
The maximum VR is the total STI awarded at the maximum level, plus the full face value of all LTI, assuming 100 per cent vesting.
VR outcomes are subject to Board oversight and discretionary adjustment, as summarised in sections 4.2 and 5.3.
3.3 Total Remuneration
Total Remuneration (TR) is the sum of FR and VR.
TR at target (TRT)
=
FR
+
target VR
TR maximum (TRM)
=
FR
+
maximum VR
TRT is benchmarked to the median of equivalent TRT in the reference market, with the intention that when Origin’s outcomes are at their
possible maximum (that is, TRM), they will be comparable to the top quartile of the reference TRT.
1
Prime references are to S&P/ASX 50 and to ASX-listed organisations ranked between seven and 70 by average two-year market capitalisation (excluding foreign domiciles,
listed investment companies or similar).
2
The face value of deferred equity elements (Deferred STI and LTI) is represented by the current share price (present-day value) because it is not possible to predict future
share prices.
62
Annual Report 2024
3.4 FY24 Short Term Incentive Plan details
The following is a detailed description of the operation of the STIP.
Parameter
Details
Award basis
The annual performance cycle is 1 July to 30 June. Individual balanced scorecards are agreed, with shared Group
objectives and targeted divisional objectives. Objectives are set across financial categories (generally 60 per cent of the
weightings) and non-financial categories (generally 40 per cent). The CEO’s FY24 scorecard details and outcomes are
shown in section 4.2.
Scorecard operation
Individual objectives on the scorecard are referenced to three performance levels: threshold, target and stretch.
Threshold performance represents the lower limit of rewardable outcome for an individual objective – one that
represents a satisfactory outcome, often achieving year-on-year improvement and contribution towards delivery of
annual plans, but falling short of the target level. Threshold performance yields 20 per cent of the maximum (33 per cent
of target). Outcomes below the threshold level are not rewarded (zero outcome for the relevant objective).
Target represents the expectation for achieving robust annual plans, yielding 60 per cent of the maximum.
Stretch performance represents the delivery of exceptional outcomes well above expectations, yielding the maximum
payout (corresponding to 167 per cent of the target).
Achievements between threshold, target and stretch targets have outcomes pro-rated on a straight-line basis.
Opportunity level
The opportunity level for FY24 for all Executive KMP is unchanged at 100 per cent FR at target, with a capped maximum
of 167 per cent FR. Achieving the maximum requires achieving every scorecard item at stretch level.
Award calculation
and assessment
Achievement and performance against each executive’s balanced scorecard are assessed annually as part of the
Company’s broader performance review process and is subject to Board oversight and adjustment as detailed in
sections 2.2 and 5.3.
Delivery and timing
The STI award is delivered in two parts, a cash element and a deferred element, each representing half of the award. Both
elements are delivered shortly after the end of the financial year to which they relate. The deferred element is delivered
in the form of RSs, restricted over a period of two years. Where the executive has exceeded their MSR obligation, half of
the deferred element is released after one year and the other half after two years; otherwise, the whole of the deferred
element is restricted for two years. Vesting occurs at the end of the restriction period.
The STI award is forfeited if the service conditions are not met (as set out below).
RS allocation
Where the deferred element is granted in the form of RSs, the number of RSs is calculated as the Deferred STI amount
divided by the 60-trading-day volume-weighted average price (VWAP) to 30 June of the performance year just
completed, rounded to the nearest whole number.
Service conditions and
cessation of employment
Unless the Board determines otherwise:
•
for resignation or dismissal with cause, the whole of an STI award is forfeited, and unvested deferred elements from
prior awards are also forfeited; or
•
in other cases (death, disability, redundancy, genuine retirement, or other 'good leaver' circumstances as approved
by the Board) to the extent that an STI award is payable, it is delivered wholly in cash. Unvested deferred elements
from prior awards remain on foot until the end of their original restriction period.
Dividends
As the STI has been earned and awarded, RSs carry dividend entitlements and voting rights.
Sourcing of RSs
The Board’s practice is to purchase shares on market, but it may issue shares or make the award in alternative forms,
including Deferred Cash. The FY23 Deferred STI was delivered in Deferred Cash during early FY24 due to constraints
on the granting of equity during the period in which the SID operated.
Governance and MSR
After restrictions on RSs are lifted, trading is subject to the MSR (see section 2.4), the Company’s Dealing in Securities
Policy, and to the malus and clawback provisions in section 5.3.
63
Remuneration Report
3.5 FY24 and FY25 Long Term Incentive Plan details
The following is a detailed description of the LTIP's operation. It covers the unique circumstances impacting LTIP grants made during FY24
(for the performance period commenced 1 July 2023), and the LTIP's operation 'in the normal course', applying to awards to be made early
in FY25 (for the performance period commencing 1 July 2024).
Parameter
Details
Award basis
LTIP awards are generally conditional grants of equity that may vest in the future, subject to meeting performance
conditions and/or underpinning criteria, and subject also to the executive meeting service and personal conduct and
performance requirements. Awards are considered annually for approximately 70 senior roles that have the capacity to
affect the Company's long-term company performance.
Opportunity and
value range
The LTIP opportunity level reflects the capacity of the role to influence long-term sustainable growth and performance,
and is set with reference to market benchmarks (see section 3.2). Awards are granted on the basis of face value.
Opportunity levels are expressed as a percentage of FR (at the commencement of the financial year in which the grant is
to be made). Where the award is in equity, it is allocated on the basis of total face value (that is, not discounted for risk).
LTIP opportunity (percentage of FR)
Executive KMP
Minimum
Standard allocation
CEO
0
120
Executive KMP and
other ELT
0
80
The Board may determine that the standard allocation should be varied up or down; however, in the normal course of
events, awards are granted at the standard opportunity level above (given that they are subject to future performance
and underpinning conditions, and are also subject to malus and clawback processes). The value of an award is as follows:
•
The minimum value is zero, which will be the case if the award fails to vest, is forfeited or is not awarded.
•
The target value represents the risked or expected value of the actual grant, considering the likelihood of vesting
(see section 3.2).
•
The maximum value represents the present-day face value of the actual grant, assuming 100 per cent of the grant
vests, and ignoring the risks of achieving performance conditions and of the service requirements.
The actual or realised value of an LTIP award depends on the level of vesting and the share price at the time of vesting,
neither of which can be determined in advance.
Raised allocations are considered only in exceptional situations. During FY24, the Board approved a raised allocation
for Jon Briskin at a level of 120 per cent FR, one-third of which is subject to performance conditions relating specifically
to the performance of the Octopus investment. This recognised the significance of the stewardship leading to that
transaction and to its ongoing oversight and guidance.
As identified in the Committee Chair’s Letter, the Board intends to make raised allocations in early FY25 to 16
executives (including the ELT) subject to the normal performance conditions over the three-year performance period
and subsequent deferral periods. These one-off elevated allocations (approximately half the standard annual allocation)
recognise the exceptional contributions made by the executives throughout FY24 and in recognition of their ability to
influence critical decisions in the next phase of the energy transition.
Form of award, dividends
and voting rights
In the normal course (and as intended for FY25), LTIP awards are delivered in the form of share rights. The share rights
do not carry any dividend or voting entitlements.
For the FY24 LTIP, given the constraints under the SID on granting equity at the time of granting annual LTIP awards
in August 2023, 75 per cent of the face-value allocation was awarded in the form of Deferred Cash, with a simple vest
period of three years. Given the potential for delisting if implementation occurred under the SID, and the irrelevance of
setting RTSR conditions in those circumstances, the Deferred Cash award was wholly subject to performance against
the underpinning conditions that are normally applicable to the RSR tranche (described below).
Following termination of the SID in December 2023, an equity award was made in February 2024 for the balance of
25 per cent of the face-value allocation in the form of PSRs, entirely subject to the RTSR condition described below. This
restored the upside missing from the Deferred Cash award, and provided a specific incentive to achieve market-leading
TSR outcomes in the next (approximately) three years. This equity award, to the extent that it vests, is scheduled to be
fully locked until its release in August 2028 – the same release date that would have applied had an equity grant been
possible in August to October 2023.
Each vested share right represents a right to a fully paid ordinary share in the Company and such additional shares
equal to the value of dividends (as determined by the Board) in the period from grant to exercise on the underlying
share on a reinvested basis. The terms and conditions that apply to the share rights or vested shares also apply to
the dividend-equivalent amounts and corresponding shares. The Board retains discretion to make a cash equivalent
payment to settle the dividend-equivalent amount in lieu of an allocation of shares. The share rights are granted at no
cost because they are awarded as remuneration.
No dividend or dividend-equivalents are received by participants on share rights during a vesting period, and none
are received on share rights that do not vest. Shares allocated upon vesting of rights (including rights to a dividend-
equivalent amount) carry the same dividend and voting rights as other shares (including while they are subject to a
holding lock).
64
Annual Report 2024
Parameter
Details
Number and type of
share rights
The total number of share rights to be granted is calculated by dividing the face value of the award being made by
the 60-trading-day VWAP of Origin shares to the commencement of the performance period, rounded to the nearest
whole number.
The award is divided into two halves,1 each with its own vesting conditions.
One half of the share rights is awarded as PSRs that are subject to an RTSR performance condition with a conventional
vesting scale.
The other half of the share rights is awarded as RSRs, where vesting is subject to Board discretion with reference to a
suite of underpinning conditions as described below.
Together, the two tranches provide a balance that combines an external financial test with a holistic assessment
across a range of non-financial metrics that is a pre-requisite for the Company’s ongoing sustainability and success.
This approach aligns management interests with those of shareholders and stakeholders by building executive share
ownership and driving focus across the full range of measures aligned with long-term strategy.
Performance period, vesting
and release
Awards are granted shortly after the commencement of a three-year performance period, as described in section 2.2.
The performance (measurement) period for determining vest outcomes (for both the PSR and RSR tranches) is the three
financial years commencing on 1 July prior to the award grant.
The PSR and RSR tranches vest (subject to achievement against the performance conditions described below) on the
second trading day after the release of the full year results for the last year of the performance period.
Vested share rights are deferred over a period of five years from grant. From FY25, for executives yet to reach their MSR
obligation, all shares that vest at the end of the performance period remain restricted for the total deferred period of five
years (that is, for a further two years after vest). For executives who have exceeded their MSR obligation, shares that vest
at the end of the performance period are released progressively at the third, fourth and fifth years after grant.
At all times before and after vesting, and after release from a holding lock, the share rights and shares remain subject to
malus and clawback provisions (see section 5.3).
PSR tranche
RTSR measures the Company’s TSR performance relative to a reference group of companies, assuming reinvestment
of dividends, over the performance period. The RTSR hurdle has been chosen because it is a widely understood
metric that is simple to calculate and aligns executive reward with shareholder returns. It is a measure of value creation
and rewards only when Origin outperforms the reference group; it does not reward overall market uplifts. The market
reference group is the S&P/ASX 50 (as constituted at the beginning of the performance period), representing a
transparent cohort with which Origin competes for investors and talent. Narrower comparator groups have not been
chosen due to the small number of companies with investment profiles and operations comparable to Origin's.
In calculating TSR for Origin and for the peer group of companies, share prices are determined using a 60-trading-day
VWAP to both the start and the end of the performance period.
Vesting occurs only where Origin’s TSR over the performance period ranks it higher than the 50th percentile of the
group. Half of the PSRs vest on satisfying that condition, and all the PSRs vest if Origin ranks at or above the 75th
percentile. Straight-line pro-rata vesting applies between these two points.
RSR tranche
In contrast to the PSR tranche, which is conditional on performance against a single external financial metric, the RSR
tranche is designed to vest in full unless there is a material deviation from Board expectations of long-term performance
across a holistic suite of approximately 30 key metrics. The condition and these metrics have been chosen because the
Board considers them to reflect the underlying health, performance and sustainability of the Company. The suite, which
may vary slightly over time, reflects emerging priorities in a dynamic operating context and includes (but is not limited
to) those reported annually as the Key sustainability performance measures in the Company's annual Sustainability
Report. The Board considers management’s performance against the totality of these underpinning indicators, in
addition to the outcomes from individual performance reviews conducted by the full Board each year (see section 5.3),
which includes matters relating to conduct, risk and reputation. Where the Board is not satisfied that the company and
individual performance met its expectations, it may reduce or cancel vesting on a group or individual basis.
Service conditions and
cessation of employment
Unless the Board determines otherwise:
•
for resignation or dismissal with cause, all share rights are forfeited; or
•
in other cases (death, disability, redundancy, genuine retirement or other 'good leaver' circumstances, as approved
by the Board), share rights remain on foot subject to their original terms and conditions (other than the continuing
service condition).
At all times through the performance period, following vesting, and both during and after the restriction (holding) period
the award remains subject to malus and clawback.
Sourcing
The Board’s preferred approach is to satisfy the vesting of share rights through the purchase of shares on market, but it
may issue shares or make the award in alternative forms, including cash or Deferred Cash.
1
Where the total number of share rights is an odd number, the number of RSRs is rounded down and the number of PSRs is rounded up.
65
Remuneration Report
3.6 Other share plans and deferred remuneration arrangements
The Company operates a universal Employee Share Plan in which all full-time and part-time employees can choose to be eligible for awards of
up to $1,000 worth of Company shares annually, or else participate in a salary sacrifice scheme to purchase up to $4,800 in shares annually.
Under the $1,000 scheme (the General Employee Share Plan (GESP)), shares are restricted for three years or until cessation of employment,
whichever occurs first.
Under the Matching Share Plan (MSP), shares purchased under the sacrifice scheme are restricted for two years or until cessation of
employment, whichever occurs first. For every two shares (one share after March 2024) purchased under the salary sacrifice scheme within
a 12-month cycle, participants are granted one Matching Right (MR) at no cost. The MRs vest two years after the cycle began, provided the
participant remains employed by the Company at that time. Each MR entitles the participant to one fully paid ordinary share in the Company
or, in certain limited circumstances, a cash-equivalent payment. MRs do not have any performance hurdles as they have been granted to
encourage broad participation in the scheme across the Company, and to encourage employee share ownership. All shares are currently
purchased on market.
Directors regularly assess the risk of the Company losing high-performing key people who manage core activities or have skills that are being
actively solicited in the market. Where appropriate, the Board may consider the selected use of deferred payment arrangements to reduce the
risk of such critical loss. From time to time, it may be necessary to offer sign-on equity to offset or mirror unvested equity, which a prospective
executive must forfeit to take up employment with Origin.
The operation of the MSP was suspended between April 2023 and February 2024, and the GESP award was delayed from its normal allocation
in August 2023 to March 2024, due to constraints during the operation of the SID.
66
Annual Report 2024
4 Company performance and remuneration outcomes
This section summarises the remuneration outcomes for FY24 and provides commentary on their alignment with Company outcomes.
4.1 Five-year Company performance and remuneration outcomes
The following table summarises the Company’s key financial and non-financial performance from FY20 to FY24, grouped and compared with
short-term and long-term remuneration outcomes.
Five-year key performance metrics FY20 to FY24
FY20
FY21
FY22
FY23
FY24
Operational measures
Underlying earnings per share (EPS) (cents)
57.6
17.8
23.2
43.4
68.7
Net cash from/used in operating and investing activities (NCOIA) ($m)
1,813
1,183
3,363
585
1,098
Energy Markets underlying EBITDA1 ($m)
1,450
979
365
1,278
1,710
Integrated Gas underlying EBITDA (total operations) ($m)
1,741
1,135
1,837
1,919
1,951
Adjusted net debt ($m)2
5,158
4,639
2,838
2,877
2,833
Strategic Net Promoter Score (sNPS)3
(3)
4
5
(2)
(3)
Total Recordable Injury Frequency Rate (TRIFR)4
2.6
2.7
4.0
3.8
4.1
Female representation in senior roles (%)5
CEO-1
33.3
33.3
30.0
30.0
30.0
CEO-2
43.9
42.9
43.6
43.6
40.0
Senior leadership roles
33.9
34.6
40.8
46.0
44.2
Origin Engagement Score (%)6
75
74
68
–
–
Origin Engagement Score (#)7
7.7
7.7
STI award outcomes
Percentage of maximum (%)8
84.1
50.7
73.6
79.3
76.7
Return measures
Closing share price at end of June ($)9
5.84
4.51
5.73
8.41
10.86
Dividends (cents per share)10
25
20
29
36.5
55
Annual TSR (%)
(17.7)
(19.7)
32.4
47.6
36.4
Three-year rolling TSR (CAGR % p.a.)11
(8)
(20.6)
(0.4)
20.3
38.4
Group Statutory EBIT ($m)
360
(1,833)
(745)
1,621
2,126
Underlying ROCE - 12-month rolling (%)12
8.7
4.4
7.1
14.2
15.9
LTI outcomes
LTI vesting percentage (%)
0
35.3
25.0
16.0
100.0
1
Includes Share of Octopus Energy Underlying EBITDA.
2 Adjusted Net Debt for FY21 includes first recognition of lease liability ($514 million) under AASB16 Leases.
3 sNPS is an industry-recognised measure of customer advocacy. The measures were previously presented on a final-quarter average for each year and have been restated as
the average over the whole of the relevant financial year.
4 TRIFR is the total number of injuries resulting in lost time, restricted work duties or medical treatment per million hours worked.
5 CEO-1 represents executives reporting directly to the CEO. In line with market practice, it includes the CEO. CEO-2 includes roles directly reporting to CEO-1. ‘Senior
leadership roles’ captures the three reporting levels below CEO and includes roles with base salaries exceeding approximately $200,000 per annum.
6 Until FY22, employee engagement was measured as an annual score obtained from a single independent survey conducted externally. Commencing in FY23, employee
engagement is measured continuously throughout the year via the OfficeVibe online tool.
7
New methodology using OfficeVibe from FY23. The score is out of 10.
8 This is the total dollar value of STI awarded for Executive KMP as a percentage of their total maximum STI. The percentage of STI forfeited is this amount subtracted from
100 per cent.
9 The opening share price for FY20 was $7.31.
10 Dividends represent the interim plus final dividends determined for each financial year. For FY24, this includes the final dividend determined on 15 August 2024 to be paid
on 27 September 2024. The amounts physically paid within each financial year are 30.0 cents, 22.5 cents, 20.0 cents, 33.0 cents and 47.5 cents, respectively.
11 Three-year TSR calculations use the LTIP methodology for determining opening and closing share prices. For LTIP grants awarded prior to November 2022 (first vests in
August 2025 and the last vests in August 2027), the methodology uses a three-calendar-month VWAP (approximately 64 trading days) to the start, and to the end, of the
performance period. Subsequent grants use a 60-trading-day VWAP methodology. The figures in Table 4.1 use the three-month methodology for consistency with LTIP RTSR
vests in FY24 and those scheduled to vest during FY25.
12 Underlying ROCE is defined in the ‘Glossary and Interpretation’ section. It has been adjusted to exclude the impact of the $2.2 billion impairment of goodwill in FY22.
67
Remuneration Report
4.2 Variable remuneration outcomes
4.2.1 Assessment process
The Board has adopted governing principles to apply when considering adjustments to measures used for remuneration purposes. The
starting points for setting STI scorecard targets are the relevant underlying measures from the financial accounts. Targets set at the beginning
of the year may be subject to events materially outside the course of business and the control of current management, in which case discretion
may be required to vary targets or outcomes to reflect the intended purpose and/or actual results and achievements. The principles provide
a structured process for the consideration of adjustments and the exercise of discretion, and a decision framework that seeks fairness (to both
executives and shareholders) and balance between favourable and unfavourable events.
In addition to customary accounting adjustments, application of these principles has included the following considerations:
•
The impact of the Queensland Government FY25 concessions being received in advance were excluded for the purposes of calculating
the relevant metrics.
•
The NCOIA targets were adjusted for the cost of the additional investment in Octopus Energy.
•
The impact of acquisitions including 1Bill and MyConnect aggregators and the Yanco Delta Wind Farm were excluded.
68
Annual Report 2024
4.2.2 Short-term performance and Short Term Incentive outcomes
STI awards are calculated on the basis of a balanced scorecard, with requirements set at threshold, target and stretch achievement levels. The
CEO’s FY24 scorecard, showing measures, outcomes and results, is summarised below.3
CEO FY24 STI scorecard
Measure, rationale and performance
Targets and outcomes
Result
Weight
(%)
Threshold
Target
Stretch
(% of max)
Origin net profit after tax
(NPAT) - underlying ($m)
Measure of earnings and profitability.
The result was driven by higher earnings from Energy Markets.
15
793
1,044
1,275
1,183
84.0
Origin NCOIA ($m)
Measure of effective cashflow generation.
Driven by higher earnings from Energy Markets and improved working capital,
partially offset by lower APLNG distributions and higher tax paid.
15
274
719
1,116
1,098
98.2
Energy Markets EBITDA
($m)
Measure of the operating performance of the Energy Markets business in
Australia and the Octopus business in the UK.
Driven by favourable Beach price review and strong Retail performance.
15
1,295
1,545
1,795
1,710
86.4
APLNG production (PJ)
Measure of field performance in the APLNG business.
APLNG maintained stable field performance from ongoing effective well
and field optimisation, fewer maintenance impacts and a focus on
workover activity.
7.5
680
698
710
694
50.3
APLNG lowest cost of supply ($m)
Measure of capital and operating cost in the APLNG business.
Despite a challenging inflationary environment, APLNG’s cost profile was
stable against target expectations.
7.5
2,933
2,858
2,783
2,846
66.3
Financial measures
60
20
60
100
81.7
81.7
Shared key priorities
To ensure focus on the key strategic outcomes, the ‘Shared key priorities’
measure includes stabilisation of Retail operations, realisation of benefits
after the implementation of the Kraken platform, progression of renewables
development and battery storage opportunities, and growth in the carbon
solutions business.
30
20
60
100
62.9
62.9
Major projects
A measure of effectiveness in balancing (i) the delivery of strong operational
results, navigating complexity in the energy transition and continuing to
pursue growth, (ii) managing the complex attempted acquisition of the
business and optimising for potential outcomes, while (iii) minimising
distraction for our people during a long period of uncertainty.
10
20
60
100
60.0
60.0
Strategic priorities
Non-financial measures
40
20
60
100
62.1
62.1
Total
100
20
60
100
73.9
73.9
The scorecard reflects financial and operating outcomes achieving 81.7 per cent (FY23: 81.1 per cent) of the maximum, accounting for 60
per cent of the STI award. In addition, it reflects performance against the non-financial strategic priorities defined for the year at 62.1 per cent
(FY23: 66.7 per cent) of the maximum, accounting for the remaining 40 per cent of the STI award. The overall scorecard outcome was 73.9
per cent (FY23: 75.3 per cent) of the maximum (123.4 per cent of target).
3
The value for each of the three levels is shown along the top of the achievement bar and corresponds to results of 20 per cent, 60 per cent or 100 per cent of the maximum,
respectively. The actual achievement is represented by the darker shading along the bar, while the achievement value is recorded below the bar.
69
Remuneration Report
4.2.3 Executive Key Management Personnel Short Term Incentive outcomes
Origin’s NPAT and NCOIA targets, and therefore results, represent half of the financial metrics for all Executive KMP. The remaining financial
metrics for divisional Executive General Managers are based on divisional targets. Accordingly, scorecard outcomes ranged between 69.5
per cent and 87.0 per cent of the maximum.
STI award
Executive KMP
% of target
% of maximum
% forfeited
$’000
F Calabria
123.4
73.9
26.1
2,520
L Tremaine
124.2
74.4
25.6
1,389
J Briskin
135.7
81.3
18.7
1,357
G Jarvis
145.4
87.0
13.0
1,467
A Thornton
116.1
69.5
30.5
1,117
4.2.4 Long-term performance and Long Term Incentive outcomes
In FY24, the Company’s share price increased 29.1 per cent (on top of 46.8 per cent in the prior year), and the three-year rolling TSR was
164.8 per cent (CAGR 38.4 per cent p.a.). The strong operational annual performance is complemented by stabilisation and growth over the
past five years, reflected in the return to partial LTI vesting in FY21 following eight consecutive years of nil vesting, and in FY24 to full vesting
for the first time in 16 years.
The FY24 full vests occurred at the end of August 2023 and were for awards granted in November 2020. Half of that grant was awarded
as PSRs, subject to a financial market condition (RTSR) vesting subject to Origin’s TSR over three years to 30 June 2023 (the performance
period) relative to the peer group (S&P/ASX 50). Origin’s TSR over that period was determined independently to be 74.04 per cent and at
the 82.9th percentile of the peer group, resulting in 100 per cent vesting. The other half of the grant was awarded as RSRs, which vested
following the Board review process described in section 3.5. At the end of the year, the Board conducted an Executive Performance Review
(summarised in section 5.3), considering business and individual performance, plus risk assessment, together with a look back across the
performance period. This included, but was not limited to, reference to the suite of Key sustainability performance measures (as reported
in the 2023 Sustainability Report), reflecting the underlying health, performance and sustainability of its businesses and the Company
overall. Following these reviews, the Board determined that performance was strong and without material deviation from its expectations.
Accordingly, it determined full vesting for one-third of the November 2020 RSRs that were tested. The remaining two-thirds of the RSRs are
scheduled to vest in August 2024 and August 2025, respectively. The PSRs vested into RSs with a two-year trading restriction, as did the
tranche of vested RSRs.
PSRs awarded in August and October 2021, together with the second tranche of November 2020 RSRs (as described above) and the first
one-third of RSRs awarded in August and October 2021, will vest in August 2024. The PSRs achieved a TSR above the 75th percentile of the
S&P/ASX 50 peer group and will vest in full. The second tranche of November 2020 RSRs was provisionally tested alongside the first tranche
(which vested in full in FY24 as described above) and in the absence of any material events since the determination of the first tranche, this
tranche will vest in full in FY25. The third test is for one-third of the RSRs awarded in August and October 2021, and subject to confirmation
this tranche is also expected to fully vest. The result of the three tests is, therefore, expected to be 100 per cent overall. All the vested rights
are subject to holding locks until the fifth anniversary of grant.
The trend in long-term performance outcomes aligns with the long-term performance of the business and with shareholder experience.
70
Annual Report 2024
4.3 Potential remuneration range and mix
The potential range for the CEO’s TR in FY24 was between a minimum of $2.043 million (FR) and a maximum of $7.906 million (FY23:
$7.565 million). The table below shows that at a maximum, across Executive KMP, fixed pay represents less than 28 per centof total pay, and
variable performance-based pay represents over 72 per cent of total pay.
($’000)
Executive KMP
FR
(and minimum TR)1
Maximum
STI cash2
Maximum
STI deferred3
Maximum
LTI deferred4
Maximum TR
F Calabria
2,043
1,706
1,706
2,452
7,907
L Tremaine
1,118
934
934
894
3,880
J Briskin
1,000
835
835
800
3,470
G Jarvis
1,009
843
843
807
3,502
A Thornton
962
803
803
770
3,338
Total
6,132
5,121
5,121
5,723
22,097
% of maximum TR
27.8
23.2
23.2
25.9
100.0
1
FR is cash and superannuation received during FY24.
2 STI cash represents the cash element of the FY24 STI award.
3 STI deferred is the deferred element of the FY24 STI award which is allocated in deferred remuneration (RSs). The value is the face-value allocation. The award is forfeitable
and may ultimately have a lower (or zero) or higher realised value.
4 LTI deferred is the total face-value allocation of the LTI awarded during FY24. This comprised two elements: a deferred cash award in August 2023 and a deferred equity award
in February 2024. Both elements are forfeitable and may ultimately have lower (or zero) or higher realised value.
4.4 Total pay received in FY24
In line with general market practice, a non-AASB presentation of actual pay received in FY24 is provided below as a summary of real or
take-home pay. AASB statutory remuneration is presented in Table 7-2 (a). The following table shows that, across Executive KMP, total pay
received in FY24 was the equivalent of 76.9 per cent of the maximum potential pay identified in section 4.3.
($’000)
Executive KMP
FR1
STI cash2
Short-term
awards3
Long-term
awards4
Actual total
pay received
F Calabria
2,043
1,260
1,330
968
5,601
L Tremaine
1,118
1,389
911
358
3,776
J Briskin
1,000
678
810
269
2,757
G Jarvis
1,009
733
636
500
2,878
A Thornton
962
559
347
93
1,961
Total
6,132
4,619
4,034
2,188
16,973
1
FR is cash and superannuation received during FY24.
2 STI cash represents the cash element of the FY24 STI award. For L Tremaine, the FY24 STI award is wholly in cash.
3 Short-term awards represents the value of previously awarded equity or Deferred Cash from short-term arrangements (including STIP and grants under the Employee Share
Plan) that were vested or released (as relevant) during FY24. The value is determined as the number of shares vested or released multiplied by the five-day VWAP immediately
prior to the date of vest/release. The amounts shown above relate to RSs releases in August 2023, arising from Deferred STI arrangements, plus MSP Rights vested in October
2023. For A Thornton, the amount also includes a vested portion of the short-term award as disclosed in the 2023 Remuneration Report, Table 7-2 (a), footnote 6.
4 Long-term award represents the value of previously awarded equity from long-term arrangements (LTIP and other arrangements with deferral periods of three or more years)
that were released during FY24. The value is determined in the same way as described in note 3 above. The amounts represent releases on 21 August 2023 and 30 April 2024.
71
Remuneration Report
5 Governance
5.1 The role of the Remuneration, People and Culture Committee
The RPCC supports the Board by overseeing Origin’s remuneration policies and practices. It operates under a Charter (published on the
Company’s website at originenergy.com.au). The RPCC formally met five times during the reporting period.
Including its Chair, the RPCC has four members, all of whom are independent NEDs (see section 1 for details). The RPCC’s Charter requires
a minimum of three NEDs. In addition, there is a standing invitation to all Board members to attend the RPCC’s meetings. Management may
attend RPCC meetings by invitation, but a member of management will not be present when their own remuneration is under discussion.
The following diagram sets out the RPCC's role and its operational relationships with the Board, management, stakeholders and
external advisors.
5.2 Remuneration advisors
The RPCC engages external advisors from time to time to conduct benchmarking, advise on regulatory and market developments, and
review proposals and reports. Protocols have been established for engaging and dealing with external advisors, including those defined as
remuneration consultants for the purposes of the Act. These protocols are to ensure independence and avoid conflicts of interest.
The protocols require that remuneration advisors be directly engaged by the RPCC and act on instruction from its Chair. Reports must be
delivered directly to the RPCC Chair. The advisor is prohibited from communicating with Company management, except as authorised by the
Chair, and even then, this is limited to the provision or validation of factual and policy data. The advisor must furnish a statement confirming
the absence of any undue influence from management.
The RPCC generally seeks information rather than specific remuneration recommendations within the definition of the Act, and this was
the case during FY24. Guerdon Associates was appointed for this period and no remuneration recommendations as defined under the Act
were provided.
In addition, the RPCC uses general market trend information from a variety of commercial and industry sources, and has access to in-house
remuneration professionals who provide it with guidance and analysis on request.
The recommendations that the RPCC makes to the Board are based on its own independent assessment of the advice and information
received from these multiple sources, using its experience and having careful regard to the principles and objectives of the remuneration
framework, the Company's performance, shareholder and community expectations, and good governance.
72
Annual Report 2024
5.3 Remuneration governance and oversight
The Board’s oversight of executive performance and remuneration outcomes is rigorous and multi‑phased. Its processes in overseeing
performance and remuneration can be divided into the stages set out below, which are designed to ensure that outcomes are fair to executives
and stakeholders, consistent in approach, and governed by documented principles.
5.3.1 Through the performance period
Throughout the STI performance year and LTI vesting periods, the Board monitors and reviews management performance against financial
and non-financial targets, including factors affecting the original assumptions underlying the setting of targets at the beginning of the relevant
performance periods.
Potential adjustments that may be required are considered under a set of protocols that cover materiality, symmetry of treatment for
favourable and unfavourable events, the degree to which management can foresee and control events, and the impact of Board decisions (for
example, mergers and acquisitions). Any adjustments are subject to Board approval at the end of the performance period.
The outcome from this stage comprises preliminary STI outcomes and preliminary LTI vesting outcomes.
5.3.2 At the end of the financial year
At the end of each financial year, the full Board conducts a formal Executive performance review of the CEO and each member of the ELT,
including their preliminary remuneration outcomes. The review is a formal and holistic process that considers:
•
risk, audit, compliance and reputation matters (including whistleblowing, discrimination, bullying or harassment complaints, and safety
and employee relations matters);
•
enterprise and business strategy contribution; and
•
leadership habits and behaviours.
The process includes receiving feedback from the:
•
Chair of the Health, Safety and Environment Committee;
•
Chair of the Audit Committee;
•
Internal Auditor;
•
General Counsel and Executive General Manager Company Secretariat, Risk and Governance; and
•
Executive General Manager, People and Culture.4
As a performance review process, the output includes performance feedback and identifies specifically whether any matters warrant the
exercise of downward discretion to modify individual executives’ preliminary remuneration outcomes. In exceptional circumstances, the
Board may exercise upward discretion, within the capped opportunity level.
During this stage, the Board will also consider whether any exercises of discretion are appropriate on a collective basis, and in the
overall context of ensuring that the outcomes represent a reasonable and fair reflection of the Company’s performance from all
stakeholder's perspectives.
The output from this stage comprises final STI outcomes and final LTI vesting decisions.
5.3.3 Beyond the performance period
After final results have been notified, issues may emerge where the Board deems that those results are no longer appropriate, or that the results
would give rise to receiving an inappropriate benefit. Where such issues emerge before payment has been made, rights have vested or shares
have been released from trading locks, the Board may reduce or cancel the award or the vesting level, and/or extend the period of a trading
lock under the Company’s malus provisions. The deferral period for equity (two years for STI and five years for all tranches of LTI) means that
the exercise of malus is available for significant periods of time.
Where benefits have been paid, vested or released, the Company’s clawback provisions give the Board further powers to recover cash
proceeds from the sale of shares and to recover cash awards. These powers may be limited by statute or regulation.
Fraud, dishonesty, gross misconduct, negligence, breach of duties and other serious matters would have additional consequences to the
remuneration impacts described above.
The Board has occasionally exercised downward discretions, both regarding STI outcomes and LTI allocations or vesting outcomes, to better
align variable pay outcomes with the broader context and overall circumstances of the Company. To date, the Board has not sought to apply
the clawback provisions.
5.4 Change of control and capital reorganisation
If a change of control event occurs, the Board may determine that all or a specified number of unvested or restricted deferred incentives will
vest or cease to be subject to restrictions.
On a capital reorganisation, the Board may determine the manner of adjustment of the number of unvested share rights and options held by
participants to minimise or eliminate any material advantage or disadvantage to the participant. If new awards are granted, they will, unless
the Board determines otherwise, be subject to the same terms and conditions as the original awards.
4
For the Executive General Manager, People and Culture, the feedback is from the CEO and/or the Chair of the RPCC.
73
Remuneration Report
6 Non-executive Director fees
6.1 Remuneration policy and structure for Non-executive Directors
NED remuneration comprises fixed fees with no incentive-based payments. This ensures that NEDs can independently and objectively assess
both executive and Company performance.
Board and committee fees consider market rates for similar positions at relevant Australian organisations (of comparable size and complexity)
and fairly reflect the time commitments and responsibilities involved. The aggregate cap for overall NED remuneration remains at $3.2 million
per year, as approved by shareholders in 2017.
The Origin Chair receives a single fee that includes committee activities, while other NEDs receive a Base NED Fee (BNF) and separate fees for
their roles on specific committees (other than the Nomination Committee, which is considered within the BNF). Per diem or special exertion
fees may also be paid on occasions where approved special work is undertaken beyond the reasonable scope of normal duties and expected
commitments (for example, on due diligence and acquisition committees). In FY24, special fees were incurred for one director as set out in
Table 7-2(b). All fees include superannuation contributions.
The following table summarises the structure and level of NED fees. The committee structure, committee fees and Board fees have all
remained unchanged since FY20. In FY25 the number of Board committees will be reduced by one as a result of a having a single Audit and
Risk Committee, removing the separate Risk Committee, and increasing the focus for the other committees to manage the more specialised
risks within their mandates. The fee levels will increase effective 1 July 2024 as tabulated below, resulting in a modest adjustment to overall
NED remuneration (on a like-for-like participation basis) of approximately 3.7 per cent.
Office
Fee ($'000)
FY20 to FY24
FY25
Board
Chair fee
677
1
6901
Non-Chair NED fee
196
204
Audit and Risk Committee
Chair fee
–
60
Member fee
–
30
Audit Committee
Chair fee
57
–
Member fee
29
–
Risk Committee
Chair fee
47
–
Member fee
23.5
–
Remuneration, People and Culture Committee
Chair fee
47
50
Member fee
23.5
25
Safety and Sustainability Committee
Chair fee
47
50
Member fee
23.5
25
Nomination Committee
All
nil
nil
1
The Board Chair fee is inclusive (separate committee fees do not apply).
6.2 Minimum Shareholding Requirement for Non-executive Directors
To align the interests of the Board with those of shareholders, NEDs are required to build and maintain a substantive shareholding in the
Company (the MSR). NEDs may purchase shares directly or through the NED Share Plan (NEDSP) that was last approved by shareholders in
2022. The NEDSP is a fee sacrifice plan that allows NEDs to acquire share rights (rights to acquire fully paid ordinary shares in the Company)
subject to the terms of the grant. The NEDSP is intended to facilitate the acquisition of shares for new Directors to meet their MSR obligation
while recognising that opportunities for direct purchases by Directors may be limited. There were no NEDSP participants in FY24.
The MSR for NEDs is to build and then maintain a shareholding with a market value equivalent to one times the BNF. For the Chair, it is
two-times the BNF. NEDs are expected to reach their MSR within three years of their appointment. Current holdings at 30 June 2024 and
multiple equivalents are shown in Table 7-4(c). All NEDs currently exceed their MSR.
At the commencement of each year, the MSR is denominated as a number of shares in order to simplify compliance and administration. The
annual determination considers fee changes and the current share price trajectory. The FY25 determinations are 22,000 and 44,000 shares
for NEDs and the Chair, respectively. Share rights held by NEDs under the NEDSP will count towards the satisfaction of NED MSR obligations
because they are funded through sacrifice of fees by the participating Director. The shares allocated on vesting of the share rights are generally
bought on market and are not subject to performance conditions or service requirements that could result in potential forfeiture. This is in line
with best practice governance standards.
74
Annual Report 2024
7 Statutory tables and other disclosures
Table 7-1 Executive service agreements
The following table sets out the main terms of service agreements for Executive KMP as at 30 June 2024.
Basis of contract
Ongoing
Notice period
•
12 months by either party for CEO; six months for Other Executive KMP
•
Shorter notice may apply by agreement
•
No notice in defined circumstances1
Termination benefits for cause
Statutory entitlements only
Termination benefits for resignation
Notice as above or payment in lieu of notice that is not worked; current-year STI forfeited; unvested
equity lapses; statutory entitlements
Termination benefits for other than resignation
or cause
Notice worked (or payment in lieu of any portion not worked); pro‑rata STI for the period worked (no
deferral applicable); all unvested equity lapses unless held on foot in accordance with Equity Incentive
Plan Rules;2 statutory entitlements.
For redundancy (Other Executive KMP only) payment in accordance with the Company’s general
redundancy policy of three weeks FR per year of service, with a minimum of 18 weeks and a maximum
of 78 weeks.
Remuneration
Remuneration is reviewed annually or as required to maintain alignment with policy and benchmarks.
1
These circumstances include but are not limited to serious, persistent or wilful misconduct, breach of contract, or conduct likely to seriously harm the Company's reputation.
2 For cases of death, disability, genuine retirement or other extraordinary circumstances, as approved by the Board.
Table 7-2 (a) Executive KMP statutory remuneration ($’000)
Short term
Long term
Totals
Post-
employment
benefit
Other1
Cash-
based
awards2
Leave
accrual3
Accounting
remuneration
At risk
(%)
Share
based
(%)
Base
salary
Cash-
based
awards4
Share-
based
awards5
Executive Director
F Calabria
2024
2,012
27
53
1,260
107
1,058
2,183
6,700
67
33
2023
1,927
25
53
1,230
179
406
2,084
5,904
63
35
Other Executive KMP
J Briskin
2024
971
27
22
678
(9)
434
824
2,947
66
28
2023
935
28
26
680
(107)
224
777
2,563
66
30
G Jarvis
2024
980
27
92
733
68
454
901
3,255
64
28
2023
946
25
65
730
143
241
848
2,998
61
28
A Thornton6
2024
933
27
29
632
24
534
676
2,855
65
24
2023
889
25
100
640
160
264
589
2,667
56
22
L Tremaine
2024
1,089
27
52
1,389
48
234
1,227
4,066
70
30
2023
1,057
25
49
686
(89)
226
883
2,837
63
31
Executive total
2024
5,985
135
248
4,692
238
2,714
5,811
19,823
67
29
2023
5,754
128
293
3,966
286
1,361
5,181
16,969
62
31
1
Represents non-monetary benefits including insurance premiums and fringe benefits (such as car parking, electric vehicle use and travel expenses).
2 Short-term cash-based awards include cash STI, which represents half of the STI award. STI cash is paid after the end of the financial year to which it relates but is allocated
to the earning year. The balance of the STI award is Deferred STI.
3 Movement in leave provision over the reporting period. Negative movement indicates that leave taken during the year exceeded leave accrued during that year.
4 Long-term cash-based awards include deferred cash arrangements when the deferral period is greater than one year. For FY24, this includes FY23 Deferred STI and August
2023 LTI awards that were delivered in the form of Deferred Cash arrangements.
5 Share-based awards include RSs, PSRs and RSRs granted as Deferred STI or LTI, respectively. Share-based remuneration is that portion of the accounting value of equity
granted or to be granted for the current and prior periods attributable to the reporting period. Where vesting of the equity is conditional on a non-market hurdle (for example,
the underpinning metrics in the LTI RSR tranche) in following reporting periods, the accumulated expense is adjusted for the number of instruments expected to be released
or vested. In good leaver circumstances, a bring-forward of future-period accounting expense may occur where a cessation of employment occurs before the normal vesting
date. See Note G3 for details on share-based remuneration accounting.
6 For A Thornton, the short-term cash-based award also includes the portion of the value of the FY23 deferred remuneration retention arrangement attributable to each period.
75
Remuneration Report
Table 7-2 (b) NED statutory remuneration ($’000)
Short term
Post employment
Board and
committee fees1
Other2
Superannuation
contributions
Total
remuneration
NEDs – current
I Atlas
2024
219
0
24
243
2023
220
0
23
243
M Brenner
2024
268
0
27
295
2023
288
0
25
313
G Lalicker
2024
198
4
22
224
2023
199
0
21
220
M McCormack
2024
245
0
27
272
2023
247
0
25
272
S Perkins
2024
677
17
0
694
2023
652
16
25
693
N Scheinkestel3
2024
290
0
7
297
2023
242
0
25
267
S Sargent
2024
263
0
27
290
2023
265
0
25
290
J Withers
2024
245
1
27
273
2023
247
0
25
272
NEDs – former
B Morgan4
2024
–
–
–
–
2023
86
0
8
94
NED total
2024
2,405
22
161
2,588
2023
2,446
16
202
2,664
1
The fees include any per diem or special exertion payments that are made from time to time.
2 Represents non-monetary benefits including insurance premiums, tax return lodgment fees for non-Australian residents, and fringe benefits (such as car parking and
travel expenses).
3 Includes $20,000 special exertion fee for due diligence committee work (scheme of arrangement).
4 For FY23, B Morgan retired on 19 October 2022.
76
Annual Report 2024
Table 7-3 Details of equity grants made during the reporting period
Equity incentive grants made to KMP during the reporting period are listed below. The grants are at nil cost to the recipient and none of the
instruments granted have an exercise price.
For share rights, exercise is automatic at vest and the expiry date is the same as the vest date. Share rights that fail to meet the relevant
performance conditions lapse effective on the test date, which may be prior to the scheduled vest date.
Type
Number
granted
Grant date
fair value ($)1
Exercise
price ($)
Grant date
Vest date
Expiry date
Executive Director
F Calabria
Performance Share Rights
73,278
5.79
—
28-Feb-24
28-Feb-27
28-Feb-27
Other Executive KMP
J Briskin
Performance Share Rights
23,912
5.79
—
28-Feb-24
28-Feb-27
28-Feb-27
G Jarvis
Performance Share Rights
24,127
5.79
—
28-Feb-24
28-Feb-27
28-Feb-27
A Thornton
Performance Share Rights
23,003
5.79
—
28-Feb-24
28-Feb-27
28-Feb-27
L Tremaine
Performance Share Rights
26,734
5.79
—
28-Feb-24
28-Feb-27
28-Feb-27
1
Accounting expense value per instrument at the grant date.
77
Remuneration Report
Table 7-4 (a) Details of, and movements in, equity rights and ordinary shares of the Company Executive KMP
The following table summarises holdings and movements of rights and ordinary shares held (directly, indirectly or beneficially, including by
related parties) over the reporting period (or KMP portion of the period), including grants, transactions and forfeits, by value and by number.
See Table 7-5 for further details of the terms and conditions of these rights.
Type
Held at start1
Granted/acquired2
Number
vested
Exercised3
Forfeited/
disposed
Held at end1,4
Number
Value ($)
Number
Value ($)5
Executive Director
F Calabria
Performance Share Rights
618,385
73,278
424,280
183,416
183,416
1,593,885
0
508,247
Restricted Share Rights
618,381
—
—
61,138
61,138
531,289
0
557,243
Shares6
1,349,713
273,721
—
—
—
—
211,000
1,412,434
Other Executive KMP
J Briskin
Performance Share Rights
202,437
23,912
138,450
60,104
60,104
522,304
0
166,245
Restricted Share Rights
202,437
—
—
20,034
20,034
174,095
0
182,403
Matching Rights
559
—
—
396
396
3,639
0
163
Shares6
512,083
90,202
995
—
—
—
250,000
352,285
G Jarvis
Performance Share Rights
206,235
24,127
139,695
61,438
61,438
533,896
0
168,924
Restricted Share Rights
206,241
—
—
20,480
20,480
177,971
0
185,761
Matching Rights
559
—
—
396
396
3,639
0
163
Shares6
396,330
92,083
—
—
—
—
280,500
207,913
A Thornton
Performance Share Rights
105,376
23,003
133,187
18,699
18,699
162,494
0
109,680
Restricted Share Rights
105,372
—
—
6,233
6,233
54,165
0
99,139
Matching Rights
559
—
—
396
396
3,639
0
163
Shares6
239,772
28,301
—
—
—
—
30,000
238,073
L Tremaine
Performance Share Rights
228,582
26,734
154,790
67,916
67,916
590,190
0
187,400
Restricted Share Rights
228,582
—
—
22,639
22,639
196,733
0
205,943
Matching Rights
559
—
—
396
396
3,639
0
163
Shares6
881,303
101,862
995
—
—
—
650,000
333,165
1
The number of instruments that were held at the start/end of the reporting period.
2 Rights to equity and shares in the Company granted to Executive KMP during the reporting period under the Equity Incentive Plan, as listed in Table 7-3. These were provided
at no cost to the recipients. For share rights, the value represents the grant date value. For shares that relate to the General Employee Share Plan, the value is the five-day VWAP
at the date of allocation.
‘Granted’ refers to equity awarded under the Equity Incentive Plan, and ‘Acquired’ refers to equity arising from participation in universal employee share plans or purchased
directly by the executive, and through participation in the Dividend Reinvestment Plan.
3 All rights currently listed in this table are automatically exercised upon vesting.
4 Other than rights and shares disclosed elsewhere in this Remuneration Report, no other equity instruments, including shares in the Company, were granted to KMP during
the period.
5 The value of rights exercised is calculated as the closing market price of the Company’s shares on the ASX on the date of exercise, after deducting any exercise price. The
exercise price for all the rights referenced in this table is nil.
6 Shares include purchases and transfers in, and shares received upon the vesting and exercise of share rights, including dividend equivalents (F Calabria: 273,721; J Briskin:
89,695; G Jarvis: 91,687; A Thornton: 27,905; L Tremaine: 101,355). No value is attributed to the balance of shares acquired, as they represent shares arising from the exercise
of share rights (the value of which is shown in the relevant share rights line of this table) or shares purchased by the executive under the MSP.
78
Annual Report 2024
Table 7-4(b) Executive KMP shareholding position relative to MSR policy
The market value of the shares held – which is different from the value attributable in Table 7-4(a) – is shown below. It is calculated for each
executive using the closing share price on 30 June 2024, and expressed as a multiple of the relevant executive’s FR on 30 June 2024.
Under the MSR policy, the CEO is required to build and maintain a shareholding equivalent to a minimum 2.5 times FR, and Other Executive
KMP must have a shareholding equivalent to a minimum 1.5 times FR. At the date of this report, all Executive KMP were compliant with the
MSR policy.
Share holding at 30 June 2024
Multiple
Executive KMP
F Calabria
1,412,434
7.5
L Tremaine
333,165
3.2
J Briskin
352,285
3.8
G Jarvis
207,913
2.2
A Thornton
238,073
2.7
Table 7-4 (c) Details of, and movements in, ordinary shares of the Company – NEDs
Type
Held at start1
Acquired2
Disposed3
Held at end1,4
Multiple5
NEDs — current6
I Atlas
Shares
50,000
0
0
50,000
2.8
M Brenner
Shares
28,367
0
0
28,367
1.6
G Lalicker
Shares
100,000
0
0
100,000
5.5
M McCormack
Shares
100,000
0
0
100,000
5.5
S Perkins
Shares
80,000
0
0
80,000
4.4
S Sargent
Shares
41,429
0
0
41,429
2.3
N Scheinkestel
Shares
33,365
0
0
33,365
1.8
J Withers
Shares
29,980
0
0
29,980
1.7
1
The number of instruments held at the start/end of the reporting period.
2 Purchases and non-market transfers in.
3 Sales and non-market transfers out.
4 Other than shares disclosed elsewhere in this Remuneration Report, no other equity instruments, including shares in the Company, were granted to KMP during the period.
5 The value of the holding at 30 June 2024 (based on the closing share price on 30 June 2024) expressed as a multiple of the BNF. Under the MSR policy, the Chair is required to
maintain a minimum holding equivalent to a multiple of two times BNF, and other directors a minimum of one times BNF. At the date of this Remuneration Report, all Directors
were compliant with the MSR policy.
6 NEDs are not issued shares under any incentive or equity plans. Acquisitions include purchases of shares on market, or pursuant to the Company’s dividend reinvestment plan
or the August 2015 Entitlement Offer.
79
Remuneration Report
Table 7-5 Summary of share rights outstanding
The following table lists all share rights outstanding at 30 June 2024 that have been granted to current or former employees (including
Executive Directors and Executive KMP) under equity-based incentive plans. Equity-based incentives are not granted to NEDs. No terms of
equity-settled share-based transactions have been altered or modified subsequent to grant. Share rights that failed to meet their performance
hurdles on test dates on or before 30 June 2024 lapsed effective on that test date. Details of awards granted in prior years, including applicable
service and performance conditions, are summarised in prior remuneration reports corresponding to the reporting period in which the awards
were granted.
Granted
Number outstanding
Number
held by KMP
Earliest
vest date1
Performance Share Rights
6-Sep-21
1,018,466
268,559
26-Aug-24
20-Oct-21
235,989
235,989
26-Aug-24
5-Sep-22
1,002,438
265,914
25-Aug-25
19-Oct-22
198,980
198,980
25-Aug-25
28-Feb-24
464,502
171,054
28-Feb-27
Restricted Share Rights
3-Nov-20
311,253
130,524
26-Aug-24
3-Nov-20
311,253
130,524
25-Aug-25
6-Sep-21
339,492
89,519
26-Aug-24
6-Sep-21
339,492
89,519
25-Aug-25
6-Sep-21
339,492
89,519
24-Aug-26
20-Oct-21
78,663
78,663
26-Aug-24
20-Oct-21
78,663
78,663
25-Aug-25
20-Oct-21
78,663
78,663
24-Aug-26
5-Sep-22
334,162
88,639
25-Aug-25
5-Sep-22
334,162
88,639
24-Aug-26
5-Sep-22
334,162
88,639
23-Aug-27
19-Oct-22
66,326
66,326
25-Aug-25
19-Oct-22
66,326
66,326
24-Aug-26
19-Oct-22
66,326
66,326
23-Aug-27
Matching Rights
23-Feb-23
49,915
336
21-Oct-24
31-Mar-23
47,018
316
21-Oct-24
1
The vest date for PSRs and RSRs granted since 2018 does not include the trading restriction of approximately one to two years that applies to the shares allocated on vesting.
Where no expiry is given, automatic exercise applies at vesting. To the extent that rights fail to meet the relevant performance conditions, they will lapse effective on the test
date, which may be on or before the vest date.
Loans to Key Management Personnel
No loans have been made, guaranteed or secured, directly or indirectly, by Origin or any of its subsidiaries, at any time throughout the year,
in relation to any KMP including to a KMP-related party.
Signed in accordance with a resolution of the Directors:
Scott Perkins
Chairman
Frank Calabria
Managing Director and Chief Executive Officer
Sydney, 15 August 2024
Sydney, 15 August 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s Independence Declaration to the Directors of Origin Energy
Limited
As lead auditor for the audit of the financial report of Origin Energy Limited for the financial year
ended 30 June 2024, I declare to the best of my knowledge and belief, there have been:
a) No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b) No contraventions of any applicable code of professional conduct in relation to the audit; and
c) No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Origin Energy Limited and the entities it controlled during the financial
year.
Ernst & Young
Andrew Price
Partner
Sydney
15 August 2024
80
Annual Report 2024
Lead Auditor’s
Independence Declaration
81
Financial Statements
Financial
Statements
30 June 2024
Primary statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the
financial statements
Overview
A
Results for the year
A1
Segments
A2
Revenue
A3
Other income
A4
Expenses
A5
Results of equity accounted investees
A6
Earnings per share
A7
Dividends
B
Investment in
equity accounted
joint ventures
and associates
B1
Interests in equity accounted joint
ventures and associates
B2
Investment in APLNG
B3
Investment in Octopus Energy
B4
Transactions between the Group and
equity accounted investees
C
Operating assets
and liabilities
C1
Trade and other receivables
C2
Exploration and evaluation assets
C3
Property, plant and equipment
C4
Intangible assets
C5
Provisions
C6
Other financial assets and liabilities
D
Capital, funding and
risk management
D1
Capital management
D2
Interest-bearing liabilities
D3
Contributed equity
D4
Reserves
D5
Financial risk management
D6
Fair value of financial assets
and liabilities
E
Taxation
E1
Income tax expense
E2
Deferred tax
F
Group structure
F1
Controlled entities
F2
Changes in controlled entities
F3
Business combinations
F4
Joint arrangements and investments
in associates
F5
Disposals
G Other information
G1
Contingent liabilities
G2
Commitments
G3
Share-based payments
G4
Related party disclosures
G5
Key management personnel
G6
Notes to the statement of cash flows
G7
Auditors’ remuneration
G8
Master netting or similar agreements
G9
Deed of Cross Guarantee
G10 Parent entity disclosures
G11
Government grants and assistance
G12 Subsequent events
Consolidated entity
disclosure statement
Directors’ Declaration
Independent
Auditor’s Report
82
Annual Report 2024
Income statement
for the year ended 30 June
2024
2023
Note
$m
$m
Revenue
A2
16,138
16,481
Other income
A3
55
45
Expenses
A4
(14,975)
(16,229)
Results of equity accounted investees
A5
908
1,324
Interest income
A3
46
51
Interest expense
A4
(169)
(194)
Profit before income tax
2,003
1,478
Income tax expense
E1
(606)
(420)
Profit for the year
1,397
1,058
Profit for the year attributable to:
Members of the parent entity
1,397
1,055
Non-controlling interests
-
3
Profit for the year
1,397
1,058
Earnings per share
Basic earnings per share
A6
81.1 cents
61.3 cents
Diluted earnings per share
A6
80.8 cents
60.9 cents
The income statement should be read in conjunction with the notes to the financial statements.
83
Financial Statements
Statement of comprehensive income
for the year ended 30 June
2024
2023
Note
$m
$m
Profit for the year
1,397
1,058
Other comprehensive income
Items that will not be reclassified to profit or loss, net of tax
Investment valuation changes
E1
(7)
9
Items that can be reclassified to profit or loss, net of tax
Foreign currency translation reserve:
Reclassified to income statement
E1
12
(62)
Translation of foreign operations
E1
19
290
Cash flow hedges:
Reclassified to income statement
E1
(147)
(1,557)
Effective portion of change in fair value
E1
169
(303)
Total other comprehensive income, net of tax
46
(1,623)
Total comprehensive income for the year
1,443
(565)
Total comprehensive income attributable to:
Members of the parent entity
1,443
(568)
Non-controlling interests
-
3
Total comprehensive income for the year
1,443
(565)
The statement of comprehensive income should be read in conjunction with the notes to the financial statements.
84
Annual Report 2024
Statement of financial position
as at 30 June
2024
2023
Note
$m
$m
Current assets
Cash and cash equivalents
625
463
Trade and other receivables
C1
2,971
2,548
Inventories
223
180
Derivatives
D5
1,307
1,100
Other financial assets
C6
754
467
Assets classified as held for sale
-
101
Other assets
129
120
Total current assets
6,009
4,979
Non-current assets
Trade and other receivables
C1
50
60
Derivatives
D5
705
1,576
Other financial assets
C6
389
341
Investments accounted for using the equity method
A5
6,823
6,255
Property, plant and equipment (PP&E)
C3
3,891
3,208
Intangible assets
C4
2,539
2,454
Other assets
48
75
Total non-current assets
14,445
13,969
Total assets
20,454
18,948
Current liabilities
Trade and other payables
3,242
2,152
Payables to joint ventures
136
136
Interest-bearing liabilities
D2
68
192
Derivatives
D5
791
901
Other financial liabilities
C6
375
418
Provision for income tax
481
455
Employee benefits
365
277
Provisions
C5
118
229
Liabilities classified as held for sale
-
15
Total current liabilities
5,576
4,775
Non-current liabilities
Trade and other payables
15
-
Interest-bearing liabilities
D2
3,310
3,066
Derivatives
D5
785
1,174
Deferred tax liabilities
E2
343
386
Employee benefits
39
50
Provisions
C5
897
586
Total non-current liabilities
5,389
5,262
Total liabilities
10,965
10,037
Net assets
9,489
8,911
Equity
Contributed equity
D3
6,861
6,901
Reserves
4,458
1,492
Retained earnings
(1,830)
498
Total parent entity interest
9,489
8,891
Non-controlling interests
-
20
Total equity
9,489
8,911
The statement of financial position should be read in conjunction with the notes to the financial statements.
85
Financial Statements
Statement of changes in equity
for the year ended 30 June
$m
Contributed
equity
Share-
based
payments
reserve
Foreign
currency
translation
reserve
Hedge
reserve
Fair
value
reserve
Accum-
ulated
profits
reserve
Retained
earnings
Non-
controlling
interests
Total
equity
Balance as at 1 July 2023
6,901
243
944
287
18
-
498
20
8,911
Profit
-
-
-
-
-
-
1,397
-
1,397
Other comprehensive income
-
-
31
22
(7)
-
-
-
46
Total comprehensive income for
the year
-
-
31
22
(7)
-
1,397
-
1,443
Dividends provided for or paid
-
-
-
-
-
(474)
(345)
-
(819)
Transfers to accumulated profits
reserve (refer to note D4)
-
-
-
-
-
3,380
(3,380)
-
-
Sale of LPG Pacific (refer to
note F5)
-
-
-
-
-
-
-
(20)
(20)
Movement in contributed equity
(refer to note D3)
(40)
-
-
-
-
-
-
-
(40)
Share-based payments
-
14
-
-
-
-
-
-
14
Total transactions with owners
recorded directly in equity
(40)
14
-
-
-
2,906
(3,725)
(20)
(865)
Balance as at 30 June 2024
6,861
257
975
309
11
2,906
(1,830)
-
9,489
Balance as at 1 July 2022
6,877
237
716
2,147
9
-
11
25
10,022
Profit
-
-
-
-
-
-
1,055
3
1,058
Other comprehensive income
-
-
228
(1,860)
9
-
-
-
(1,623)
Total comprehensive income for
the year
-
-
228
(1,860)
9
-
1,055
3
(565)
Dividends provided for or paid
-
-
-
-
-
-
(568)
(8)
(576)
Movement in contributed equity
(refer to note D3)
24
-
-
-
-
-
-
-
24
Share-based payments
-
6
-
-
-
-
-
-
6
Total transactions with owners
recorded directly in equity
24
6
-
-
-
-
(568)
(8)
(546)
Balance as at 30 June 2023
6,901
243
944
287
18
-
498
20
8,911
The statement of changes in equity should be read in conjunction with the notes to the financial statements.
86
Annual Report 2024
Statement of cash flows
for the year ended 30 June
2024
2023
Note
$m
$m
Cash flows from operating activities
Receipts from customers
17,544
18,972
Payments to suppliers and employees
(16,172)
(19,596)
Government grants received
G11
370
184
Cash from/(used in) operations
1,742
(440)
Income tax paid, net of refunds received
(628)
(193)
Net cash from/(used in) operating activities
G6
1,114
(633)
Cash flows from investing activities
Acquisition of PP&E
(608)
(372)
Acquisition of exploration and evaluation assets
-
(11)
Acquisition of other assets
(45)
(92)
Acquisition of Octopus Energy
(540)
(173)
Acquisition of subsidiaries
F3
(135)
-
Acquisition of other investments
(169)
(32)
Government grants received
G11
6
-
Interest received from other parties
33
43
Net proceeds from sale of non-current assets
F5
58
72
Receipt of dividends from Australia Pacific LNG (APLNG)
1,384
1,783
Net cash (used in)/from investing activities
(16)
1,218
Cash flows from financing activities
Proceeds from borrowings
710
1,050
Repayment of borrowings
(537)
(1,265)
Joint venture operator cash call movements
(9)
66
Settlement of foreign currency contracts
-
(48)
Australian Energy Market Operator (AEMO) cash deposits
-
290
Interest and transaction costs related to borrowings paid1,2,3
(170)
(163)
Repayment of lease principal
(73)
(71)
Dividends paid to shareholders of Origin Energy Ltd
(819)
(568)
Dividends paid to non-controlling interests
-
(8)
Purchase of shares on-market (treasury shares)
D3
(55)
(4)
Net cash used in financing activities
(953)
(721)
Net increase/(decrease) in cash and cash equivalents
145
(136)
Cash and cash equivalents at the beginning of the year
463
620
Cash and cash equivalents held for sale at the beginning of the year
20
-
Effect of exchange rate changes on cash
(3)
(1)
Cash and cash equivalents held for sale at the end of the year
-
(20)
Cash and cash equivalents at the end of the year
625
463
1
Includes $21 million (2023: $21 million) of interest payments on leases.
2 Includes $12 million (2023: nil) of transaction costs related to borrowings.
3 Includes $13 million (2023: nil) of interest payments that were capitalised to PP&E.
The statement of cash flows should be read in conjunction with the notes to the financial statements.
87
Financial Statements
Overview
Origin Energy Limited (the Company) is a
for-profit company domiciled in Australia.
The address of the Company’s registered
office is Level 32, Tower 1, 100 Barangaroo
Avenue, Barangaroo NSW 2000. The
nature of the operations and principal
activities of the Company and its controlled
entities (the Group or Origin) are described
in the segment information in note A1.
On 15 August 2024, the Directors resolved
to authorise the issue of these consolidated
general purpose financial statements for the
year ended 30 June 2024.
Basis of preparation
The financial statements have
been prepared:
•
in accordance with the requirements
of the Corporations Act 2001 (Cth),
Australian Accounting Standards and
other authoritative pronouncements of
the Australian Accounting Standards
Board (AASB), and International
Financial Reporting Standards (IFRS) as
issued by the International Accounting
Standards Board;
•
on a historical cost basis, except for
derivatives and other financial assets and
liabilities and assets held for sale, that are
measured at fair value; and
•
on a going concern basis.
The financial statements:
•
are presented in Australian dollars;
•
are rounded to the nearest million
dollars, unless otherwise stated, in
accordance with Australian Securities
and Investments Commission (ASIC)
Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191;
•
do not early adopt any Accounting
Standards and Interpretations that have
been issued or amended but are not yet
effective; and
•
present reclassified comparative
information where required for
consistency with the current
year’s presentation.
Use of judgements and estimates
Preparing the financial statements in
conformity with Australian Accounting
Standards requires management to make
judgements and apply estimates and
assumptions that affect the reported
amounts of assets, liabilities, income and
expenses. The estimates and associated
assumptions, which are based on
historical experience and various other
factors believed to be reasonable under
the circumstances, form the basis of
judgements about carrying values of
assets and liabilities that are not readily
apparent from other sources. Actual
results may differ from these estimates.
Throughout the notes to the financial
statements, further information is provided
about key management judgements and
estimates that we consider material to the
financial statements.
Change in accounting estimates -
Eraring Power Station useful life
In May 2024, the Group announced that
it had executed an agreement with the
New South Wales Government to delay
the retirement of Eraring Power Station
(Eraring) by two years to August 2027, to
support security of the State’s electricity
supply through the energy transition.
Under the terms of the Generator
Engagement Project Agreement (GEPA),
the Group may receive compensation
from the NSW Government to help cover
the cost of Eraring’s operations and will
endeavour to generate at least 6 TWh of
electricity during each of the extension
periods of the financial years ended
30 June 2026 and 30 June 2027. To be
eligible to receive the compensation, the
Group must advise the NSW Government
by March whether it will trigger the GEPA
for the coming financial year. If the GEPA
is triggered in either year and Eraring’s
operations are profitable calculated using a
contractually agreed formula, there may be
instances that the Group will pay the NSW
Government a portion of the profit amount,
capped at $40 million per annum.
As at 30 June 2024, the Group has not
advised the NSW Government whether
it will trigger the GEPA for the financial
year ended 30 June 2026. If the GEPA
is triggered for a financial year, any
compensation or payments made by or to
the NSW Government for the financial year
would only be recognised in the financial
year to which it related.
The useful life of Eraring has been adjusted
to reflect the later closure date with a
resulting deceleration of depreciation. Refer
to note C3.
Similarly, the timing of restoration activities
and associated cashflows for the Eraring site
remediation work has been deferred. The
provisions balance at 30 June 2024 has
been remeasured for the later closure date.
Refer to note C5.
Termination of Scheme
Implementation Deed
On 27 March 2023 the Company entered
into a binding Scheme Implementation
Deed (the Scheme) with the Consortium
comprising affiliates of Brookfield
Renewable Partners L.P., together with
its institutional partners and certain other
global investors, and MidOcean Energy, an
entity managed by EIG Partners (EIG), for
the acquisition of all the issued shares in
the Company.
On 22 November 2023 a non-binding
and indicative proposal was received from
the Consortium (Revised Proposal) to
amend the Scheme. Following careful
consideration, including obtaining advice
from its advisers, the Board decided the
Revised Proposal was not in the best
interest of Origin and its shareholders.
As a consequence, the Scheme was
not amended.
The Scheme Meeting at which shareholders
of the Company were asked to vote on
the proposed acquisition of the Company
by the Consortium by way of a Scheme
of Arrangement was held on 4 December
2023 and the resolution to approve
the Scheme of Arrangement was not
approved by the requisite majorities of the
Company’s shareholders.
The Scheme was terminated on
7 December 2023 in accordance with
its terms.
Climate change
Origin’s ambition is to lead the energy
transition through cleaner energy and
customer solutions. With a long-term
ambition to achieve net-zero Scope 1, 2 and
3 emissions across our value chain by 2050,
the Group is committed to progressively
decarbonising its business and providing
the solutions to help customers transition to
a low-carbon future.
The Group has identified certain key
physical and transition risks relating to
climate change. These include potential
changes in market supply and demand
for energy, government policy and
regulation in relation to climate change,
extreme weather events and other
technological advancements that might
occur as the transition to a low-carbon
economy unfolds.
The Group continues to monitor climate-
related legislation and policies that
impact the financial statements and will
incorporate any required changes as
they arise. We recognise that there is
significant uncertainty around the pace
of decarbonisation and differing pathways
to net zero across the global economy.
Future changes to the Group’s ambition
or realisation of global decarbonisation
ambitions quicker or more slowly than
currently anticipated may impact some of
the Group’s significant judgements and
key estimates.
In preparing the financial statements, the
key judgements and estimates consider
a range of economic conditions that are
forecast to exist over the remaining useful
lives of the Group’s assets, including
expectations about future operations, the
current outlook for commodity
88
Annual Report 2024
Overview (continued)
prices, discount rates, capital expenditure
requirements and market supply and
demand profiles. Climate change-related
risks will impact those areas of the financial
statements that are subject to estimation
uncertainties and can also introduce more
volatility in assets and liabilities carried at
fair value.
Climate change-related risks impact the
significant judgements and estimates in the
following notes to the financial statements:
•
B2 - Investment in APLNG
•
C3 - Property, plant and equipment
•
C4 - Intangible assets
•
C5 - Provisions - restoration
•
D6 - Fair value of financial assets
and liabilities
As previously noted, in May 2024 the
Group announced that it had executed
an agreement with the NSW Government
to delay the retirement of Eraring Power
Station until August 2027 to support
security of the State’s electricity supply
through the energy transition. Refer to
Change in accounting estimates – Eraring
Power Station useful life in this Overview.
The impact of the Eraring Power Station
extension has also been considered in the
sensitivities presented below.
Paris Agreement and climate scenarios
The Group unequivocally supports the goal
of the Paris Agreement and believes the
world must pursue efforts to limit global
average temperature rise to 1.5°C above
preindustrial levels. The Group recognises
that there are a range of possible energy
transition scenarios that align to this goal.
Consistent with our commitment at the
2022 Annual General Meeting, we have
disclosed the estimates and judgements
used in presenting a quantified climate
analysis. The Group’s climate scenarios
disclosed are based on the following:
•
International Energy Agency (IEA) Net
Zero Emissions by 2050 scenario (NZE)
as presented in their World Energy
Outlook 2023 (WEO 2023) (October
2023) publication.
•
Wood Mackenzie1 (Woodmac) 2022
Accelerated energy transition 1.5-
degree scenario (2022 AET-1.5°C).
•
IEA Announced Pledges scenario (APS)
(WEO 2023).
Both the IEA NZE and Woodmac 2022
AET-1.5°C
1 scenarios are intended to be
consistent with the goal of the Paris
Agreement to limit average temperature
rise to 1.5°C above pre-industrial levels.
However, the Group recognises that
globally we may not be on a trajectory
consistent with the IEA NZE 1.5°C pathway
and therefore have also included the IEA
APS scenario. The APS scenario considers
the impact of all pledges announced as
of August 2023 by governments to meet
net zero goals, and is estimated to limit the
global average temperature rise to 1.7°C.
Climate scenarios – assumptions
and methodology
Although all potential financial reporting
consequences under any climate scenario
are impracticable to fully assess, the Group
has used the following assumptions in order
to assess the impact of a climate scenario to
the financial statements.
IEA APS and IEA NZE Scenarios
The IEA APS and IEA NZE scenarios
released in the WEO 2023 present
commodity pricing starting from historical
market balances in 2022. To reflect the
economic challenges the business will face
in the energy transition, the Group has used
the oil, LNG and carbon prices from the
Group’s FY25 base case assumptions used
for impairment assessment and assumed
a straight-line interpolation to the earliest
subsequent period provided by the IEA
APS and IEA NZE scenarios. A straight-line
interpolation is then assumed between each
of the IEA price points provided up to
2050, where prices are held flat for any
subsequent periods. As all prices presented
in the IEA WEO 2023 are 2022 real unit
pricing, the Group has adjusted these prices
by an assumed 2.5% per annum inflation
factor to reflect 2024 real unit pricing.
Woodmac 2022 AET-1.5°C Scenario
1
The Woodmac 2022 AET-1.5°C scenario
1
presents commodity pricing for each
year through to 2050 based on 2022
real unit pricing. For use in the Group’s
scenario analysis, these prices have been
uplifted by an assumed 2.5% inflation
factor per annum to reflect 2024 real unit
pricing. No other adjustments have been
made to the Woodmac 2022 AET-1.5°C1
commodity pricing.
Limitations of scenario analysis
Scenarios do not constitute definitive
outcomes or probabilities, and scenario
analysis relies on assumptions that may or
may not be, or prove to be, correct and may
or may not eventuate. Scenarios may also
be impacted by additional factors to the
assumptions disclosed.
While each of the climate scenarios
presented are founded on differing
assumptions, central themes across each
of these scenarios include the need for
swift policy action, technological uplift, and
investment in the energy transition on an
unprecedented global scale. It is difficult to
predict, which if any, of these assumptions
and scenarios may eventuate.
Furthermore, the IEA has recognised that
the transition is extremely challenging
and that globally we are not on the IEA
NZE pathway.
The Group’s base case assumptions
used for impairment differ from the
key assumptions used in the climate
scenarios presented in the climate analysis.
This is because the Group's base case
assumptions used for impairment comply
with the Accounting Standards which
require management to consider the
current market conditions to develop
the best estimate of future economic
outcomes. These are made with reference
to both internal and external sources.
Presently there is a wide divergence
between the consensus on current market
conditions and the outcomes of the climate
scenario modelling.
Notwithstanding, the Group will continue
to take action across the business both
now and beyond 2030 with the ambition
of reaching net zero Scope 1, 2 and 3
emissions across our value chain by 2050.
1
The data and information were obtained from the Accelerated Energy Transition 1.5-degree scenario 2022, an archived product of Wood Mackenzie. Wood Mackenzie is a
global insight business for renewables, energy and natural resources. The data and information provided by Wood Mackenzie should not be considered advice; be relied upon;
copied or used except as expressly permitted by Wood Mackenzie. Wood Mackenzie takes no responsibility for the use of this data or information except as specified in an
agreement with Wood Mackenzie. For further information on their operations refer to their website: https://www.woodmac.com/
89
Financial Statements
Overview (continued)
Commodity price assumptions 2
The commodity prices used in the climate
scenarios are as follows (presented in 2024
real unit pricing):
Brent Oil
USD/bbl
2026
2030
2040
2050
0
25
50
75
100
LNG
USD/mmbtu
2026
2030
2040
2050
0
10
20
30
40
Carbon
USD/t
IEA APS
scenario
Woodmac 2022
AET-1.5°C
scenario²
IEA NZE
scenario
2026
2030
2040
2050
0
80
160
240
320
The AEMO “Rapid Decarbonisation”
scenario per their 2023 Inputs,
Assumptions and Scenarios Report (July
2023 Integrated Systems Plan) publication
provides the latest supply and demand
forecasts for both the gas and electricity
sector, a key parameter of which is the IEA
NZE WEO 2021 scenario. On that basis
Origin believes that the electricity and gas
forecasts contained in the AEMO “Rapid
Decarbonisation” scenario are most closely
aligned with the IEA NZE commodity
assumptions in the graphs above to develop
relevant energy market pricing. The AEMO
“Strong Electrification” scenario used by
the Group in previous periods is no
longer available from AEMO and as such,
the “Rapid Decarbonisation” scenario was
selected as the scenario most closely
aligned with the IEA NZE scenario.
In presenting the quantified climate
analyses, we have assumed in all climate
scenarios that carbon pricing has been
applied to Scope 1 emissions above the
estimated Safeguard Mechanism facility
baseline and all Scope 2 emissions. For the
IEA NZE and Woodmac 2022 AET-1.5°C3
scenarios, the Group has also assumed
a net zero grid by 2035 and therefore
has no Scope 2 emissions beyond 2035.
This is intended to be consistent with
the economic principles that support the
AEMO “Rapid Decarbonisation” scenario
and has therefore been applied when
modelling these selected 1.5°C scenarios.
The quantified impact of applying
the climate scenarios to the financial
statements are as follows:
Energy Markets
For Energy Markets, the application
of the IEA NZE and AEMO “Rapid
Decarbonisation” climate scenarios result
in a net favourable position compared to
the outlook from the base case assumptions
used for impairment, benefiting existing
assets such as the peaking generation fleet
and Power Purchase Agreements (PPAs).
Increased electrification of the National
Electricity Market (NEM) and other growth
areas such as electric vehicle penetration
and an increase in connected services as
customers decarbonise their homes will
provide further opportunities for the retail
business. The climate scenario valuation
assumes an updated closure of Eraring in
August 2027 in line with accounting useful
life assumptions. There is no expected
impact to the useful lives of the remaining
assets or restoration and rehabilitation
provisions under the IEA NZE scenario.
Accounting Standards require any decision
as to impairments or reversals to be
based on management’s best estimate
of economic conditions over the assets
remaining useful life. Given the IEA
NZE scenario is not viewed as the
most likely economic outcome, it is
not an appropriate basis on which to
determine or quantify impairment or
potential impairment reversals. Historical
impairments within the Energy Markets
segment have largely pertained to goodwill,
which, in accordance with Accounting
Standards, cannot be reversed.
Investment in APLNG
For the Group’s investment in APLNG,
the outcomes of the climate scenarios are
as follows:
$m
Carrying value as at 30 June 2024
5,544
Impairment arising in
selected scenarios:
IEA APS
nil
Woodmac 2022 AET-1.5°C
nil
IEA NZE
2,378
The climate analysis disclosed is presented
based on the adjustment of pricing
assumptions alone, the exception being
the IEA NZE and Woodmac 2022
AET-1.5°C
3scenarios where no Scope
2 emissions are assumed from 2035
onwards. This is intended to be consistent
with the assumption of the net zero
grid by 2035 applied in the AEMO
“Rapid Decarbonisation” scenario. No
other adjustments or mitigating actions
have been applied and all modelling is
conducted in accordance with AASB and
IFRS measurement requirements.
In practice these valuations do not reflect
any actions management may take in order
to reduce negative outcomes and further
grow the business. If presented with such
a sustained low-price environment, APLNG
would adjust future long-term expenditure,
production and operations in order to
reduce the overall unfavourable impact,
therefore the illustrative impairments
presented under the climate scenarios
above are likely higher than what
would transpire.
2
The data presented in the graphs as the Woodmac 2022 AET-1.5 °C scenario was obtained from the Accelerated Energy Transition 1.5-degree scenario 2022, an archived
product of Wood Mackenzie. The data and information provided by Wood Mackenzie should not be considered advice; be relied upon; copied or used except as expressly
permitted by Wood Mackenzie. Wood Mackenzie takes no responsibility for the use of this data or information except as specified in an agreement with Wood Mackenzie.
3
The data and information were obtained from the Accelerated Energy Transition 1.5-degree scenario 2022, an archived product of Wood Mackenzie. Wood Mackenzie is a
global insight business for renewables, energy and natural resources. The data and information provided by Wood Mackenzie should not be considered advice; be relied upon;
copied or used except as expressly permitted by Wood Mackenzie. Wood Mackenzie takes no responsibility for the use of this data or information except as specified in an
agreement with Wood Mackenzie. For further information on their operations refer to their website: https://www.woodmac.com/
90
Annual Report 2024
A Results for the year
This section highlights the performance of
the Group for the year, including results by
operating segment, income and expenses,
results of equity accounted investees,
earnings per share and dividends.
A1 Segments
The Group’s operating segments are
presented on a basis that is consistent
with the information provided internally to
the Managing Director, who is the chief
operating decision maker. This reflects the
way the Group’s businesses are managed,
rather than the legal structure of the Group.
The reporting segments are organised
according to the nature of the activities
undertaken and are detailed below.
•
Energy Markets: Energy retailing and
wholesaling, power generation and LPG
operations predominantly in Australia.
•
Share of Octopus Energy: Origin’s
investment in Octopus Energy Group
Limited (Octopus Energy).
•
Integrated Gas: Origin’s investment in
APLNG, exploration interests and costs
associated with growth initiatives such
as hydrogen. It also includes overhead
costs (net of recoveries from APLNG)
and costs incurred in managing Origin’s
exposure to LNG pricing risk and
impacts of its LNG trading positions. For
greater transparency, the investment in
APLNG is presented separately from the
residual component of the segment.
•
Corporate: Various business
development and support activities
that are not allocated to operating
segments, including corporate treasury
and tax items.
Underlying profit and underlying EBITDA
are non-statutory (non-IFRS) measures.
The objective of measuring and reporting
underlying profit and underlying EBITDA
is to provide a more meaningful and
consistent representation of financial
performance by removing items that distort
performance or are non-recurring in nature.
Items excluded from the calculation of
underlying profit are reported to the
Managing Director as not representing the
underlying performance of the business
and thus are excluded from underlying
profit or underlying EBITDA. These items
are determined after consideration of the
nature of the item, the significance of the
amount and the consistency in treatment
from year to year.
The nature of items excluded from
underlying profit and underlying EBITDA
are shown below.
•
Changes in the fair value of financial
instruments not in accounting hedge
relationships, to remove the significant
volatility caused by timing mismatches
in valuing financial instruments and
the related underlying transactions. The
valuation changes are subsequently
recognised in underlying earnings when
the underlying transactions are settled;
•
Realised and unrealised foreign
exchange gains/losses on debt held
to hedge USD-denominated investment
in APLNG;
•
Significant redundancies and other
significant costs in relation to
business restructuring, transformation or
integration activities;
•
Gains/losses on the sale or acquisition of
an asset/entity;
•
Transaction costs incurred in relation to
the sale or acquisition of an asset/entity;
•
Impairment and reversal of impairment
of assets;
•
Significant onerous contracts;
•
Deferred tax liability utilisation relating to
the APLNG investment;
•
Large-scale Generation Certificates
(LGCs) net shortfall charge/refund; and
•
Other significant non-recurring items.
91
Financial Statements
A1 Segments (continued)
Segment result for the year ended 30 June
Integrated Gas
Energy Markets
Share of
Octopus Energy
Share of APLNG
Other
Corporate
Consolidated
$m
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
External revenue
15,607
15,406
-
-
-
-
531
1,075
-
-
16,138
16,481
EBITDA
1,655
2
30
240
1,936
2,246
287
917
(201)
(94)
3,707
3,311
Depreciation and amortisation
(501)
(501)
-
-
-
-
(20)
(22)
-
(4)
(521)
(527)
Share of ITDA of equity
accounted investees
(2)
(2)
(82)
(101)
(979)
(1,062)
3
2
-
-
(1,060)
(1,163)
EBIT
1,152
(501)
(52)
139
957
1,184
270
897
(201)
(98)
2,126
1,621
Interest income
46
51
46
51
Interest expense1
(169)
(194)
(169)
(194)
Income tax expense2
(606)
(420)
(606)
(420)
Non-controlling interests (NCI)
-
(3)
-
(3)
Statutory profit/(loss)
attributable to members of
the parent entity
1,152
(501)
(52)
139
957
1,184
270
897
(930)
(664)
1,397
1,055
Reconciliation of statutory
profit/(loss) to segment result
and underlying profit/(loss)
Fair value and foreign
exchange movements
(19)
(846)
-
-
-
-
(196)
991
6
(40)
(209)
105
Disposals, impairments,
business restructuring
and other
19
(190)
(19)
-
-
-
468
253
(74)
27
394
90
Tax and NCI items excluded
from underlying profit
29
113
29
113
Total significant items
-
(1,036)
(19)
-
-
-
272
1,244
(39)
100
214
308
Segment underlying
profit/(loss)3
1,152
535
(33)
139
957
1,184
(2)
(347)
(891)
(764)
1,183
747
Underlying EBITDA3,4
1,655
1,038
55
240
1,936
2,246
15
(327)
(133)
(90)
3,528
3,107
1
Interest expense related to general financing is allocated to the Corporate segment.
2 Income tax expense for entities in the Origin tax consolidated group is allocated to the Corporate segment.
3 Underlying profit and underlying EBITDA are non-statutory (non-IFRS) measures.
4 Underlying EBITDA equals segment result and underlying profit/(loss) adjusted for: depreciation and amortisation; share of ITDA of equity accounted investees; interest
income/(expense); income tax expense; NCI; interest unwind significant item (2024: nil, 2023: $9 million); share of ITDA of equity accounted investees significant item (2024:
$(6) million, 2023: nil) and income tax significant item (2024: $29 million, 2023: $113 million).
92
Annual Report 2024
A1 Segments (continued)
Segment result for the year ended 30 June
2024
2023
$m
Gross
Tax and NCI
Gross
Tax and NCI
Fair value and foreign exchange movements
(Decrease)/increase in fair value of derivatives
(258)
78
259
(77)
Net gain/(loss) from financial instruments measured at fair value
48
(14)
(114)
34
Exchange gain/(loss) on foreign-denominated debt
1
-
(40)
12
Total fair value and foreign exchange movements
(209)
64
105
(31)
Disposals, impairments, business restructuring and other
Loss on disposal - Beetaloo
-
-
(106)
31
Recycling of foreign currency translation reserve to the income
statement on wind up - Origin Energy Hydro Bermuda
-
-
62
-
Gain on sale - LPG Pacific
12
(4)
-
-
Loss on disposal - Canning Basin
(3)
1
-
-
Disposals1
9
(3)
(44)
31
Reversal of impairment - APLNG equity accounted investment2
477
-
-
-
Impairment - Carisbrook Solar Farm
(18)
2
-
-
Impairments
459
2
-
-
Restructuring costs
(23)
7
(4)
1
Transaction costs
(92)
28
(29)
9
Transaction costs - share of Octopus Energy3,4
(11)
-
-
-
Transformation costs
(58)
17
(93)
28
Business restructuring
(184)
52
(126)
38
Deferred tax liability (recognition)/utilisation - APLNG
-
(85)
-
180
Provision for legal matters
-
-
(13)
-
LGC net shortfall refund/(charge)
114
-
(77)
-
Onerous contracts provision5,6
-
-
350
(105)
Onerous contracts provision - share of Octopus Energy3,7
(8)
-
-
-
Other provision
4
(1)
-
-
Other
110
(86)
260
75
Total disposals, impairments, business restructuring and other
394
(35)
90
144
Total significant items
185
29
195
113
1
Refer to note F5.
2 Refer to note B2.2.
3 As the Group equity accounts for its share of net profit after tax of Octopus Energy, this amount is disclosed net of tax.
4 The gross amount includes share of EBITDA of $15 million (2023: nil) and share of ITDA of $(4) million (2023: nil).
5 These amounts represent the non-cash movement during the year relating to the Group’s onerous contracts. Future realised gains or losses will be recognised within
underlying profit. Refer to note C5.
6 The prior year gross amount includes onerous contract provision movement of $359 million and interest unwind of $9 million.
7
The gross amount includes share of EBITDA of $10 million (2023: nil) and share of ITDA of $(2) million (2023: nil).
93
Financial Statements
A1 Segments (continued)
Segment assets and liabilities as at 30 June
Integrated Gas
Energy
Markets
Share of
Octopus
Energy
Share
of APLNG
Other
Corporate
Assets held
for sale
Consolidated
$m
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Assets
Segment assets
11,955
10,712
-
-
-
-
906
1,264
145
153
-
80
13,006
12,209
Investments
accounted for using
the equity method
(refer to note A5)
19
10
1,260
776
5,633
6,038
(89)
(569)
-
-
-
-
6,823
6,255
Cash, funding-
related derivatives
and tax assets
625
463
-
21
625
484
Total assets
11,974
10,722
1,260
776
5,633
6,038
817
695
770
616
-
101
20,454
18,948
Liabilities
Segment liabilities
(5,356) (4,382)
-
-
-
-
(689)
(898)
(679)
(612)
-
(7)
(6,724)
(5,899)
Financial liabilities,
interest-bearing
liabilities, funding-
related derivatives
and tax liabilities
(4,241)
(4,130)
-
(8)
(4,241)
(4,138)
Total liabilities
(5,356) (4,382)
-
-
-
-
(689)
(898) (4,920) (4,742)
-
(15) (10,965) (10,037)
Net assets
6,618
6,340
1,260
776
5,633
6,038
128
(203) (4,150) (4,126)
-
86
9,489
8,911
Additions of non-
current assets
1,057
396
540
173
-
-
2
24
2
2
-
-
1,601
595
94
Annual Report 2024
A2 Revenue
2024
$m
Retail
Business and
Wholesale
LPG
Solar and
Energy
Services
Integrated
Gas
Total
Sale of electricity
5,628
3,163
-
292
-
9,083
Sale of gas
1,402
1,930
615
150
531
4,628
Pool revenue
-
2,165
-
-
-
2,165
Solar and batteries
-
-
-
100
-
100
Broadband
100
-
-
-
-
100
Other revenue
25
4
-
33
-
62
Total revenue
7,155
7,262
615
575
531
16,138
2023
$m
Sale of electricity
4,408
3,267
-
231
-
7,906
Sale of gas
1,397
2,204
740
152
1,075
5,568
Pool revenue
-
2,796
-
-
-
2,796
Solar and batteries
-
-
-
105
-
105
Broadband
61
-
-
-
-
61
Other revenue
30
9
-
6
-
45
Total revenue
5,896
8,276
740
494
1,075
16,481
The Group’s primary revenue streams relate to the sale of electricity and natural gas to retail (residential and small to medium enterprises),
business and wholesale customers, the sale of generated electricity into the NEM, and the sale of physical LNG cargoes that form part of an
LNG trading portfolio.
Key judgements and estimates
The Group recognises revenue from electricity and gas sales once the energy has been consumed by the customer. When determining
revenue for the financial period, management estimates the volume of energy supplied since a customer’s last bill. The estimation of
unbilled consumption requires judgement and is based on various assumptions including:
•
volume and timing of energy consumed by customers;
•
allocation of estimated electricity and gas volumes to various pricing plans;
•
discounts linked to customer payment patterns; and
•
loss factors.
Management also uses unbilled consumption volumes to accrue network expenses incurred by the Group for unread customer electricity
and gas meters.
The calculation of unbilled revenue requires significant judgement in estimating the level of energy consumption by customers during the
unbilled period to 30 June 2024. The Group uses a backcasting model and volume-matching process to provide a reliable estimate of
unbilled revenue as at 30 June 2024.
Retail contracts
Retail electricity is generally marketed through standard service offers that provide customers with discounts on published tariff rates.
Contract duration can vary with some contracts providing a discount on published rates for a limited term, while other contracts have no
fixed duration. Contracts generally require no minimum consumption and can be terminated by the customer at any time without significant
penalty. The supply of energy is considered a single performance obligation for which revenue is recognised upon delivery to customers at
the offered rate. Where customers are eligible to receive additional behavioural discounts, Origin considers this to be variable consideration.
Broadband revenue primarily relates to the provision of broadband products and services to residential and business customers. Similar to
retail contracts for sale of electricity, the supply of broadband is considered a single performance obligation for which revenue is recognised
upon delivery to customers at the offered rate.
95
Financial Statements
A2 Revenue (continued)
Business and wholesale contracts
Contracts with business and wholesale customers are generally medium to long-term, higher-volume arrangements with fixed or index-linked
energy rates that have been commercially negotiated. The nature and accounting treatment of this revenue stream is largely consistent
with retail sales. Some business and wholesale sales arrangements also include the transfer of renewable energy certificates (RECs), which
represent an additional performance obligation. Revenue is recognised for these contracts when Origin has the ‘right to invoice’ the customer
for consideration that corresponds directly with the value of units of energy delivered to the customer. Pool revenue relates to sales by Origin
generation assets into the NEM, as well as revenue associated with gross settled PPAs. Origin has assessed it is acting as the principal in relation
to transactions with the NEM and therefore recognises pool sales on a gross basis. Revenue from these sales is recognised at the spot price
achieved when control of the electricity passes to the grid.
Solar and Energy services
Solar and Energy Services revenue primarily relates to sales of solar, batteries and Community Energy Services. Solar and batteries revenue
includes the sale, installation, repairs and maintenance services of solar photovoltaic systems, and battery solutions, to residential and business
customers. Revenue is recognised at the point in time that the system is installed, or the service provided is complete. Community Energy
Services supplies electricity and gas within embedded network sites. Similar to retail contracts, the supply of energy is considered a single
performance obligation for which revenue is recognised upon delivery to the customers at the offered rate.
LPG and Integrated Gas
Revenue from the sale of LPG (Energy Markets segment) and LNG (Integrated Gas segment) is recognised at the point in time that the
customer takes physical possession of the commodity. Revenue is recognised at an amount that reflects the consideration expected to
be received.
A3 Other income
2024
2023
$m
$m
Net gain on sale of assets1
10
-
Fees and services, and other income
45
45
Other income
55
45
Interest earned from other parties2
46
51
Interest income
46
51
1
Primarily relates to gain on the sale of LPG Pacific $12 million and loss on disposal of Canning Basin ($3 million). Refer to note F5.
2 Interest income is measured using an effective interest rate method and recognised as it accrues.
96
Annual Report 2024
A4 Expenses
2024
2023
$m
$m
Cost of sales1
12,830
14,531
Employee expenses2
961
804
Depreciation and amortisation
521
527
Impairment of trade receivables (net of bad debts recovered)
198
148
Decrease/(increase) in fair value of derivatives
258
(259)
Net (gain)/loss from financial instruments measured at fair value
(48)
114
Reversal of impairment of non-current assets3
(477)
-
Impairment of non-current assets4
18
-
Net loss on sale of assets5
-
42
Net foreign exchange (gain)/loss
(7)
63
Onerous contracts provision6
-
(359)
Other7
721
618
Expenses
14,975
16,229
Interest on borrowings
135
155
Interest on lease liabilities
21
21
Unwind of discounting on long-term provisions
13
18
Interest expense
169
194
Financing costs capitalised8
13
-
1
Includes variable lease payments of $30 million (2023: $31 million).
2 Includes contributions to defined contribution superannuation funds of $83 million (2023: $71 million).
3 Refer to note B2.2.
4 Refer to note C3.
5 The prior year amount primarily relates to the disposal of Beetaloo and wind up of Origin Energy Hydro Bermuda. Refer to note F5.
6 Refer to note C5.
7
Includes low-value assets and short-term leases payments of $8 million (2023: $8 million).
8 Financing costs incurred for the construction of a qualifying asset are capitalised while the asset is being constructed or prepared for use at the rate applicable to the relevant
borrowings. Where borrowings are not specific to an asset, financing costs are calculated at an average rate based on the general borrowings of the Group. The capitalisation
rate used to determine capitalised financing costs was 4.4 per cent (2023: n/a, no interest capitalised in the prior year).
97
Financial Statements
A5 Results of equity accounted investees
for the year ended 30 June
2024
$m
Share of EBITDA
Share of ITDA
Share of net
profit/(loss)
APLNG1,2
1,936
(976)
960
Total joint ventures
1,936
(976)
960
Octopus Energy3,4,5,6
30
(82)
(52)
Climatech Zero7
-
-
-
Gasbot Pty Limited
-
-
-
Gaschem
2
(2)
-
Total associates
32
(84)
(52)
Total
1,968
(1,060)
908
2023
$m
APLNG1,2
2,246
(1,060)
1,186
Total joint ventures
2,246
(1,060)
1,186
Octopus Energy3,4,5
240
(101)
139
Gasbot Pty Limited
(1)
-
(1)
Gaschem
2
(2)
-
Total associates
241
(103)
138
Total
2,487
(1,163)
1,324
1
APLNG’s summary financial information is separately disclosed in notes B2.1, B2.3 and B2.4.
2 Included in the Group’s share of net profit is the elimination of Mandatorily Redeemable Cumulative Preference Shares (MRCPS) interest income of $3 million (2023:
$2 million) in line with the depreciation of the capitalised interest in APLNG’s result. Refer to note B2.1.
3 Octopus Energy’s summary financial information is separately disclosed in notes B3.1 and B3.2.
4 The Group holds a 22.7 per cent (2023: 20 per cent) interest in Octopus Energy and has significant influence over the entity. Refer to note B4 for details regarding changes
in ownership interest during the year.
5 Included in the Group’s share of net profit is $21 million (2023: $20 million) of depreciation, relating to the fair value attributed to assets at the acquisition date. Refer to
note B3.1.
6 Share of ITDA includes $52 million (Origin share) of unwind of discounting relating to a funding agreement entered into as part of the acquisition of Bulb Energy.
7
During the year the Group acquired a 20 per cent interest in Climatech Zero Pty Ltd and has significant influence over the entity.
as at 30 June
Equity accounted investment
carrying amount
$m
2024
2023
APLNG1
5,544
5,469
Octopus Energy2
1,260
776
Climatech Zero
9
-
Gasbot Pty Limited
-
-
Gaschem
10
10
Total
6,823
6,255
1
APLNG’s summary financial information is separately disclosed in notes B2.1, B2.3 and B2.4.
2 Octopus Energy’s summary financial information is separately disclosed in notes B3.1 and B3.2
98
Annual Report 2024
A6 Earnings per share
2024
2023
Weighted average number of shares on issue-basic1
1,722,199,759
1,720,567,672
Weighted average number of shares on issue-diluted2
1,729,241,555
1,731,006,904
Statutory profit
Earnings per share based on statutory profit
Statutory profit $m
1,397
1,055
Basic earnings per share
81.1 cents
61.3 cents
Diluted earnings per share
80.8 cents
60.9 cents
Underlying profit
Earnings per share based on underlying profit
Underlying profit $m3,4
1,183
747
Underlying basic earnings per share
68.7 cents
43.4 cents
Underlying diluted earnings per share
68.4 cents
43.2 cents
1
The basic earnings per share calculation uses the weighted average number of shares on issue during the year excluding treasury shares held.
2 The diluted earnings per share calculation uses the weighted average number of shares on issue during the year excluding treasury shares held. It is also adjusted to reflect
the number of shares that would be issued if outstanding Options, Performance Share Rights, Deferred Share Rights, Restricted Shares and Matching Share Rights were to
be exercised (2024: 7,041,796; 2023: 10,439,232).
3 Refer to note A1 for a reconciliation of statutory consolidated profit to underlying consolidated profit.
4 Underlying profit is a non-statutory (non-IFRS) measure.
A7 Dividends
Dividends paid during the year ended 30 June are detailed below.
2024
2023
Recognised amounts
$m
$m
Final dividend of 20 cents per share, fully franked, in respect of the financial year ended 30 June 2023, paid
29 September 2023
(2023: 16.5 cents per share, partially franked to 75 per cent, in respect of the financial year ended 30 June
2022, paid 30 September 2022)
345
284
Interim dividend of 27.5 cents per share, fully franked, in respect of the financial year ended 30 June 2024, paid
28 March 2024
(2023: 16.5 cents per share, fully franked, in respect of the financial year ended 30 June 2023, paid
24 March 2023)
474
284
Total dividends provided for or paid
819
568
Unrecognised amounts
Since the end of the financial year, the Directors have determined to pay a fully franked final dividend of 27.5
cents per share, on ordinary shares to be paid on 27 September 2024 (2023: 20 cents per share, fully franked,
to be paid on 29 September 2023).
474
345
Dividend franking account
Franking credits available to shareholders of Origin Energy Limited for subsequent financial years are shown below.
Australian franking credits available at 30 per cent
809
453
New Zealand franking credits available at 28 per cent (in NZD)
304
304
99
Financial Statements
B Investment in equity accounted joint ventures and associates
This section provides information on the Group’s equity accounted investments including financial information relating to APLNG and
Octopus Energy.
B1 Interests in equity accounted joint ventures and associates
Ownership interest (per cent)
Joint ventures and associates
Reporting date
Country
of incorporation
2024
2023
APLNG1
30 June
Australia
27.5
27.5
Octopus Energy2
30 April
United Kingdom
22.7
20.0
Climatech Zero
30 June
Australia
20.0
-
Gasbot Pty Limited
30 June
Australia
22.5
29.2
Gaschem
31 December
Germany
25.0
25.0
1
APLNG is a separate legal entity. Operating, management and funding decisions require the unanimous support of the Foundation Shareholders, which includes the Group
and ConocoPhillips. Accordingly, joint control exists, and the Group has classified the investment in APLNG as a joint venture.
2 Octopus Energy is a separate legal entity. The Group’s investment is equity accounted as a result of the Group’s active participation on the Board and the Group’s ability to
impact decision making, leading to the assessment that significant influence exists.
Of all the above joint ventures and associates, only the interests in APLNG and Octopus Energy have a material impact on the Group at
30 June 2024.
B2 Investment in APLNG
This section provides financial information related to the Group’s investment in the equity accounted joint venture APLNG.
B2.1 Summary APLNG income statement
for the year ended 30 June
2024
2023
Total
APLNG
Origin
interest1
Total
APLNG
Origin
interest1
$m
Operating revenue
9,981
11,259
Operating expenses
(2,940)
(3,091)
EBITDA
7,041
1,936
8,168
2,246
Depreciation and amortisation expense
(1,721)
(473)
(1,659)
(456)
Interest income
119
32
87
24
Other interest expense
(465)
(128)
(440)
(121)
Income tax expense
(1,492)
(410)
(1,850)
(509)
ITDA
(3,559)
(979)
(3,862)
(1,062)
Statutory result for the year
3,482
957
4,306
1,184
Other comprehensive income
-
-
-
-
Statutory total comprehensive income2
3,482
957
4,306
1,184
Underlying profit for the year2
3,482
957
4,306
1,184
Underlying EBITDA for the year3
7,041
1,936
8,168
2,246
1
Origin’s interest is 27.5 per cent.
2 Excluded from the above is the elimination of MRCPS interest income that was historically recognised by Origin of $3 million (2023: $2 million) (Origin share), in line with the
depreciation of the capitalised interest in APLNG’s result above. Refer to note B2.3. This adjustment is disclosed under the Integrated Gas - Other segment on the ‘share of
ITDA of equity accounted investees’ line in note A1.
3 Underlying profit and underlying EBITDA are non-statutory (non-IFRS) measures.
Income and expense amounts are converted from USD to AUD using the average exchange rate prevailing for the relevant period.
100
Annual Report 2024
B2.2 Carrying amount of investment in APLNG
The carrying amount of the Group’s equity accounted investment in APLNG is reviewed at each reporting date to determine whether there
is any indication of impairment or reversal of previous impairment. The investment in APLNG forms part of the Integrated Gas segment and
there has been no change to this cash-generating unit (CGU) during the year. There is no goodwill attached to this CGU or segment. In the
year ended 30 June 2020, Origin took a post-tax impairment of $650 million for its 37.5 per cent investment in APLNG. Following a 10 per
cent divestment of APLNG interests in December 2021, only $477 million of that initial impairment remained assessable for reversal as at
1 July 2023.
Where an indicator of impairment or impairment reversal exists, a formal estimate of the recoverable amount is made. The Group’s assessment
of the recoverable amount of its investment in APLNG is typically determined based on an assessment of fair value less costs of disposal, based
on level 3 fair value hierarchy using a discounted cash flow methodology. However, the proposed Scheme in combination with the Revised
Proposal on 22 November 2023 has provided an observable market price that is deemed a better indication of market fair value and is used
for assessing the recoverable amount of the investment in APLNG.
The Revised Proposal provided an implied split in value between the Energy Markets and Integrated Gas businesses of 58%:42% respectively,
which applied to the Scheme value of $9.38 per share, indicates an implied market valuation of the Integrated Gas business which was to be
acquired by EIG. The USD components of the Scheme offer are converted to AUD using an exchange rate of 0.6674 as at 4 December 2023.
The Integrated Gas business which was to be acquired by EIG primarily included Origin’s investment in APLNG as well as Other Integrated Gas
operations. The Other Integrated Gas operations primarily consist of derivatives to manage Origin’s exposure to APLNG and LNG purchase
and sale contracts (including hedging contracts to manage price risk of these physical LNG contracts). The derivatives are carried at fair value
using both level 1 and level 2 valuation inputs as disclosed in note D6. The LNG purchase and sale contracts are valued using observable market
prices for gas at an appropriate market discount rate.
Deducting the fair value of these Other Integrated Gas operations, the implied market value attributed by the Revised Proposal to Origin’s
investment in APLNG is approximately $6,461 million, compared to a post impairment reversal carrying value of $5,544 million as at 30 June
2024. This implied market value is classified as level 3 on the fair value hierarchy which has been determined using fair value less costs of
disposal method, maximising observable market inputs.
The valuation under the Accounting Standards requires market observable inputs to be maximised, which has been combined with the
Group’s view of the Other Integrated Gas operations to determine the value of the investment in APLNG. This approach may differ to other
acceptable forms of valuation of the investment in APLNG within the market, as evident by the Independent Expert’s Report included in the
Scheme booklet. The valuation provided by the expert further supports a higher valuation of the investment in APLNG between $7,030 million
to $7,642 million, and full reversal of previous impairment.
The impairment reversal analysis above was conducted shortly following the announcement of the Revised Proposal in December 2023,
maximising the use of observable market inputs. Overall, the recoverable amount based on the above supported a full reversal of the previous
impairment of $477 million.
Impairment sensitivity
The Group’s assessment of the recoverable amount in the Other Integrated Gas operations requires exercise of judgement and is mostly
sensitive to changes in oil and gas prices. Reasonably possible changes of 1% in either oil or gas prices would still result in a full reversal of the
$477 million previous impairment.
Key judgements and estimates
Climate change is a material risk that can affect the Group’s operations through current and future climate-related legislation and policies
and climate related scenarios. Future climate related conditions, legislation and policies may have an impact on future commodity prices,
foreign exchange rates, discount rates, inflation, global market supply and demand conditions and whether reserve quantities are capable
of economic extraction. Refer to the Strategy and climate risks section in the Overview.
101
Financial Statements
B2.3 Summary APLNG statement of financial position
100 per cent APLNG
as at 30 June
$m
2024
2023
Cash and cash equivalents
1,853
1,720
Other assets
1,074
910
Current assets
2,927
2,630
Receivables from shareholders
325
324
PP&E
31,463
32,441
Exploration, evaluation and development assets
558
510
Other assets
131
149
Non-current assets
32,477
33,424
Total assets
35,404
36,054
Bank loans – secured
934
885
Other liabilities
1,047
647
Current liabilities
1,981
1,532
Bank loans – secured
5,579
6,489
Other liabilities
7,359
6,078
Non-current liabilities
12,938
12,567
Total liabilities
14,919
14,099
Net assets
20,485
21,955
Group’s interest of 27.5 per cent of APLNG net assets
5,633
6,038
Group’s impairment expense1
-
(477)
Group’s own costs
18
18
MRCPS elimination2
(107)
(110)
Investment in APLNG Pty Ltd3
5,544
5,469
1
Relates to impairments taken by the Group in the year ended 30 June 2020. This balance was reversed during the year. Refer to note B2.2.
2 During project construction, when the Group received interest on the MRCPS from APLNG, it recorded the interest as income after eliminating a proportion of this interest
that related to its ownership interest in APLNG. At the same time, when APLNG paid interest to the Group on MRCPS, the amount was capitalised by APLNG. Therefore, these
capitalised interest amounts form part of the cost of APLNG’s assets, and these assets have been depreciated since commencement of operations. The proportion attributable
to the Group’s own interest is eliminated through the equity accounted investment balance.
3 Includes an increase of $22 million (2023: $245 million) due to foreign exchange that has been recognised in the foreign currency translation reserve. Also included is a
reduction of A$1,384 million (US$901 million) relating to dividends received from APLNG (2023: A$1,783 million (US$1,198 million)).
Reporting date balances are converted from USD to AUD using an end-of-period exchange rate of 0.6623 (2023: 0.6629).
102
Annual Report 2024
B2.4 Summary APLNG statement of cash flows
100 per cent APLNG
for the year ended 30 June
$m
2024
2023
Cash flow from operating activities
Receipts from customers
10,302
11,767
Payments to suppliers and employees
(3,106)
(3,583)
Net cash from operations
7,196
8,184
Income tax paid
(208)
-
Net cash from operating activities
6,988
8,184
Cash flows from investing activities
Acquisition of PP&E
(641)
(469)
Acquisition of exploration and development assets
(31)
(12)
Acquisition of intangibles
-
(1)
Proceeds from sale of assets
-
2
Interest received
120
82
Net cash used in investing activities
(552)
(398)
Cash flows from financing activities
Repayment of lease principal
(62)
(64)
Payment of interest on lease liabilities
(26)
(27)
Repayment of borrowings
(908)
(813)
Payments of transaction and interest costs relating to borrowings
(347)
(311)
Payments of ordinary dividends
(5,032)
(6,483)
Net cash used in financing activities
(6,375)
(7,698)
Net increase in cash and cash equivalents
61
88
Cash and cash equivalents at the beginning of the year
1,720
1,544
Effect of exchange rate changes on cash
72
88
Cash and cash equivalents at the end of the year
1,853
1,720
Cash flow amounts are converted from USD to AUD using the exchange rate that approximates the actual rate on the date of the cash flows.
103
Financial Statements
B3 Investment in Octopus Energy
This section provides financial information related to the Group’s investment in the equity accounted associate Octopus Energy, an energy
retailer and technology company incorporated in the United Kingdom that is not publicly listed.
B3.1 Summary Octopus Energy income statement
The following tables summarise the financial information of Octopus Energy adjusted for differences in accounting policies.
2024
2023
for the year ended 30 June
$m
Total
Octopus
Energy
Origin
interest1
Total
Octopus
Energy
Origin
interest1
Operating revenue
23,663
24,285
Statutory result for the year
(158)
(31)
795
159
Other comprehensive income
-
-
-
-
Statutory total comprehensive income2
(158)
(31)
795
159
Items excluded from segment result
Transaction costs - Shell acquisition
(54)
(11)
-
-
Onerous contracts provision
(38)
(8)
-
-
Items excluded from segment result (net of tax)
(92)
(19)
-
-
Underlying (loss)/profit for the year2,3
(66)
(12)
795
159
Underlying EBITDA for the year3
267
55
1,200
240
1
Origin’s interest is 22.7 per cent. Prior to 11 April 2024 it was 20 per cent. Refer to note B4.
2 Excluded from the above is $21 million (2023: $20 million) (Origin share) of amortisation relating to the fair value attributed to assets at the acquisition date.
3 Underlying profit and underlying EBITDA are non-statutory (non-IFRS) measures.
Income statement amounts are converted from GBP to AUD using the average rate prevailing for the relevant period.
B3.2 Summary Octopus Energy statement of financial position
The following table reconciles the summarised financial information to the carrying amount of the Group’s interest in Octopus Energy.
100 per cent Octopus Energy
as at 30 June
$m
2024
2023
Current assets1
14,022
11,998
Non-current assets
2,475
1,729
Current liabilities2
(12,849)
(5,970)
Non-current liabilities2
(452)
(5,659)
Net assets
3,196
2,098
Group’s interest of 22.7 per cent (2023: 20 per cent) of Octopus
Energy net assets
725
420
Goodwill, fair value adjustments and equity-settled transactions3
529
350
Group’s own costs
6
6
Group’s carrying amount of the investment in Octopus Energy4
1,260
776
1
Current assets include cash and cash equivalents of $8,542 million (2023: $7,686 million) and includes amounts ringfenced as part of the acquisition of Bulb Energy. Over a
certain period, there are restrictions over making distributions of these amounts to the wider Octopus Group.
2 Current liabilities include $5,209 million relating to a funding agreement entered into as part of the acquisition of Bulb Energy (2023: $5,183 million included in non-current
liabilities). On 31 July 2024, Octopus Energy repaid £889 million (~A$1,779 million) of the funding agreement. This resulted in a decrease in the ringfenced cash balance
noted above.
3 Includes goodwill and other fair value adjustments on initial recognition of the Group’s equity accounted investment in Octopus Energy.
4 Includes an increase of $540 million (2023: $173 million) related to an additional investment during the year, and a decrease of $4 million (2023: $51 million increase) due to
foreign exchange that has been recognised in the foreign currency translation reserve.
Reporting date balances are converted from GBP to AUD using an end-of-period exchange rate of 0.5243 (2023: 0.5250).
The associate has no contingent liabilities as at 30 June 2024.
104
Annual Report 2024
B4 Transactions between the Group and equity accounted investees
APLNG
Service transactions
The Group provides services to APLNG including corporate services, upstream operating services related to the development and operation
of APLNG’s natural gas assets, and marketing services relating to coal seam gas (CSG). The Group incurs costs in providing these services and
charges APLNG for them in accordance with the terms of the contracts governing those services.
Commodity transactions
Separately, the Group has entered agreements to purchase gas from APLNG (2024: $692 million; 2023: $636 million) and sell gas to APLNG
(2024: nil; 2023: $40 million). At 30 June 2024, the Group’s outstanding payable balance for purchases from APLNG was $125 million (2023:
$59 million) and outstanding receivable balance for sales to APLNG was nil (2023: nil).
Funding transactions
The Group received dividends of $1,384 million, including the equivalent of $132 million fully franked dividends (2023: $1,783 million
unfranked dividends).
On 16 July 2024, the directors of APLNG determined to pay fully franked dividends to shareholders. The Group received fully franked
dividends of US$72 million (A$110 million) on 29 July 2024.
On 13 August 2024, the directors of APLNG determined to pay further fully franked dividends to shareholders. The Group expects to receive
US$99 million on 28 August 2024.
Octopus Energy
Additional equity transactions
On 11 April 2024, an additional investment of £280 million (A$540 million) was paid by the Group to Octopus Energy to participate in a
funding round with existing shareholders and increase its interest by 2.7 per cent to 22.7 per cent.
Financial guarantee
In the prior year, the Group provided a financial guarantee to Octopus Energy’s financiers and A$6 million was recognised within other income
in respect of the financial guarantee income. The financial guarantee expired in March 2023.
Kraken enterprise software milestone payment
The £10 million (A$20 million) final milestone payment was paid in May 2023.
105
Financial Statements
C Operating assets and liabilities
This section provides information on the assets used to generate the Group’s trading performance and the liabilities incurred as a result.
C1 Trade and other receivables
The following balances are amounts due from the Group’s customers and other parties.
2024
2023
$m
$m
Current
Trade receivables net of allowance for impairment
1,036
867
Unbilled revenue net of allowance for impairment
1,711
1,457
Other receivables
224
224
Total current
2,971
2,548
Non-current
Trade receivables
50
60
Total non-current
50
60
Trade and other receivables are initially recorded at the amount billed to customers or other counterparties. Unbilled receivables represent
estimated gas and electricity supplied to customers since their previous bill was issued. The carrying value of all receivables, including unbilled
revenue, reflects the amount anticipated to be collected.
Key judgements and estimates
Recoverability of trade receivables: Judgement is required in determining the level of provisioning for customer debts. Impairment
allowances take into account the age of the debt, historic collection trends and expectations about future economic conditions.
Unbilled revenue: Unbilled gas and electricity revenue is not collectable until customers’ meters are read and invoices issued. Refer to note
A2 for judgement applied in determining the amount of unbilled energy revenue to recognise.
Credit risk and collectability
The Group minimises the concentration of credit risk by undertaking transactions with a large number of customers from across a broad range
of industries. Credit approval processes are in place for large customers and all customers are required to pay in accordance with agreed
payment terms. Depending on the customer segment, settlement terms are generally 14 to 30 days from the date of the invoice. For some
debtors, the Group may also obtain security in the form of deposits, guarantees, deeds of undertaking or letters of credit, which can be called
upon if the counterparty defaults.
Debtor collectability is assessed on an ongoing basis and any resulting impairment losses are recognised in the income statement. The Group
applies the simplified approach to providing for trade receivable and unbilled revenue impairment, which requires the expected lifetime credit
losses to be recognised when the receivable is initially recognised. To measure expected lifetime credit losses, trade receivables and unbilled
revenue balances have been grouped based on shared credit risk characteristics and ageing profiles. A debtor balance is written off when
recovery is assessed to be no longer possible.
106
Annual Report 2024
C1 Trade and other receivables (continued)
As at 30 June 2024, the allowance for impairment in respect of trade receivables and unbilled revenue is $376 million (2023: $238 million).
The average age of trade receivables is 25 days (2023: 22 days). Other receivables are neither past due nor impaired and relate principally
to generation and hedge contract receivables. The ageing of current trade receivables and unbilled revenue at the reporting date is
detailed below.
2024
2023
$m
Gross
Impairment
allowance
Gross
Impairment
allowance
Unbilled revenue
1,738
(27)
1,473
(16)
Not yet due
755
(29)
629
(35)
Less than 30 days
74
(15)
114
(4)
31-60 days past due
84
(15)
50
(7)
61-90 days past due
58
(14)
36
(7)
Greater than 91 days
414
(276)
260
(169)
Total
3,123
(376)
2,562
(238)
The movement in the allowance for impairment in respect of trade receivables and unbilled revenue during the year is shown below.
Balance as at 1 July
238
186
Impairment losses recognised
198
148
Amounts written off
(60)
(96)
Balance as at 30 June
376
238
C2 Exploration and evaluation assets
2024
2023
$m
$m
Balance as at 1 July
-
286
Additions
-
11
Disposal1
-
(263)
Transfers to assets held for sale2
-
(8)
Exploration write-off
-
(26)
Balance as at 30 June
-
-
1
The prior year movement mainly relates to the disposal of Beetaloo. Refer to note F5.
2 The prior year movement relates to the transfer of Canning Basin to assets held for sale. Refer to note F5.
The Group holds a number of exploration permits that are grouped into areas of interest according to geographical and geological attributes.
Expenditure incurred in each area of interest is accounted for using the successful efforts method. Under this method, all general exploration
and evaluation costs are expensed as incurred except the direct costs of acquiring the rights to explore, drilling exploratory wells and
evaluating the results of drilling. These direct costs are capitalised as exploration and evaluation assets pending the determination of the
success of the well. If a well does not result in a successful discovery, the previously capitalised costs are immediately expensed.
At 30 June 2024, all exploration and evaluation assets have either been fully impaired or disposed of. The carrying amounts of exploration and
evaluation assets are reviewed at each reporting date to determine whether there is any indication of reversal of previous impairment present.
Where an indicator of impairment reversal exists, the asset’s recoverable amount is estimated. If it is concluded that the carrying value of an
exploration and evaluation asset is likely to be recovered by future exploitation or sale, an impairment reversal is recognised in the income
statement for the difference.
Upon approval of the commercial development of a project, the exploration and evaluation asset is classified as a development asset. Once
production commences, development assets are transferred to PP&E.
107
Financial Statements
C3 Property, plant and equipment
Owned
Right-of-use (ROU)
Total
Plant
and equipment
Land
and buildings
Capital work
in progress
Plant
and equipment
Land
and buildings
$m
2024
Cost
6,589
238
897
313
395
8,432
Less: Accumulated
depreciation and
impairment losses
(4,178)
(82)
-
(122)
(159)
(4,541)
Total
2,411
156
897
191
236
3,891
Balance as at 1 July 2023
2,178
107
459
195
269
3,208
Additions1
3
52
812
30
4
901
Net restoration movement
211
-
9
-
-
220
Disposals
(2)
-
-
(1)
-
(3)
Lease remeasurements
-
-
-
6
2
8
Depreciation expense
(344)
(3)
-
(39)
(39)
(425)
Impairment
-
-
(18)
-
-
(18)
Transfers within PP&E
365
-
(365)
-
-
-
Balance as at 30 June 2024
2,411
156
897
191
236
3,891
2023
Cost
6,030
185
459
287
400
7,361
Less: Accumulated
depreciation and
impairment losses
(3,852)
(78)
-
(92)
(131)
(4,153)
Total
2,178
107
459
195
269
3,208
Balance as at 1 July 2022
2,303
115
399
169
297
3,283
Additions2
72
-
224
35
-
331
Net restoration movement
13
-
-
-
-
13
Disposals
(26)
-
-
-
(5)
(31)
Lease remeasurements
-
-
-
43
9
52
Depreciation expense
(316)
(2)
-
(46)
(32)
(396)
Transfers within PP&E
164
-
(164)
-
-
-
Transfers to assets held for sale
(32)
(6)
-
(6)
-
(44)
Balance as at 30 June 2023
2,178
107
459
195
269
3,208
1
Includes plant and equipment and capital work in progress related to the acquisitions of 1Bill Holdings Pty Ltd and MyConnect Holdings Pty Ltd ($1 million), Yanco Delta Wind
Farm development project ($125 million), and Salisbury Solar Farm and Ruby Hills Wind Farm ($9 million).
2 Additions include $6 million relating to the acquisition of Yanco Solar Farm.
Owned PP&E
PP&E is recorded at cost less accumulated depreciation, amortisation and impairment charges. Costs include financing costs incurred for the
construction of qualifying assets while the asset is being constructed or prepared for use and the estimated future cost of required closure
and rehabilitation.
Contingent consideration, that is dependent upon uncertain future events not wholly within the Group’s control, is only recognised in the cost
of PP&E once an obligation has arisen and the uncertainty has been resolved. This form of contingent consideration is included as contingent
liabilities in note G1.
The carrying amounts of assets are reviewed to determine if there is any indication of impairment. If any such indication exists, the asset’s
recoverable amount is estimated and if required, an impairment is recognised in the income statement.
Depreciation is calculated on a straight-line basis so as to write off the cost of each asset over its expected useful life. Leasehold improvements
are amortised over the period of the relevant lease or estimated useful life, whichever is shorter. Land and capital work in progress are
not depreciated.
The estimated useful lives used in the calculation of depreciation are 10 to 50 years for buildings, including leasehold improvements and three
to 30 years for plant and equipment.
108
Annual Report 2024
C3 Property, plant and equipment (continued)
Leased PP&E
The Group’s leased assets include commercial offices, power stations, LPG terminals and shipping vessels, motor vehicles and other items
of equipment.
ROU assets are recognised at the commencement of a lease. ROU assets are initially valued at the corresponding lease liability amount
adjusted for any payments already made, lease incentives received, or initial direct costs incurred when entering into the lease. Where the
Group is required to restore the ROU asset at the end of the lease, the cost of restoration is also included in the value of the ROU asset.
ROU assets are depreciated on a straight-line basis over the shorter of the lease term or the useful life of the ROU asset. The carrying amounts
of ROU assets are reviewed to determine if there is any indication of impairment. If any such indication exists, the asset’s recoverable amount
is estimated, and if required, an impairment is recognised in the income statement.
Refer to note D2 for discussion of the recognition and measurement of associated lease liability balances.
Key judgements and estimates
Recoverability of carrying values: Estimates of recoverable amounts are based on an asset’s value-in-use or fair value less costs to sell,
whichever is higher. The recoverable amount of these assets is sensitive to changes in key assumptions.
Estimation of useful economic lives: A technical assessment of the operating life of an asset requires significant judgement. Useful lives
are amended prospectively when a change in the operating life is determined. The estimated useful lives of our assets align with our climate
change strategy commitments.
Eraring Power Station useful life: The expected closure date of Eraring has been reassessed to August 2027 following the execution of
an agreement with the NSW Government. Prevailing market conditions will continue to be assessed which will help inform the final timing
of closure of all four units at Eraring. Refer to Change in accounting estimates – Eraring Power Station useful life in the Overview.
Restoration provisions: An asset’s carrying value includes the estimated future cost of required closure and rehabilitation activities. Refer
to note C5 for the judgement related to restoration provisions.
Climate change risks: Future climate-related conditions, legislation and policies may have an impact on these estimates and continues to
be monitored.
Lease term: Where lease arrangements contain options to extend the term or terminate the contract, the Group assesses whether it is
‘reasonably certain’ that the option to extend or terminate will be exercised. Consideration is given to all facts and circumstances that create
an economic incentive to extend or terminate the contract. Lease liabilities and ROU assets are measured using the reasonably certain
contract term.
C4 Intangible assets
2024
2023
$m
$m
Goodwill net of impairment losses
2,091
1,964
Software and other intangible assets
1,772
1,747
Accumulated amortisation
(1,324)
(1,257)
Total
2,539
2,454
109
Financial Statements
C4 Intangible assets (continued)
Reconciliations of the carrying amounts of each class of intangible asset are set out below.
$m
Goodwill
Software
and other
intangibles
Total
Balance as at 1 July 2023
1,964
490
2,454
Additions
-
47
47
Additions - entity acquisitions1
127
9
136
Amortisation expense
-
(98)
(98)
Balance as at 30 June 2024
2,091
448
2,539
Balance as at 1 July 2022
1,965
530
2,495
Additions2
-
92
92
Transfers to assets held for sale
(1)
(1)
(2)
Amortisation expense
-
(131)
(131)
Balance as at 30 June 2023
1,964
490
2,454
1
Includes $127 million of goodwill on consolidation and $9 million of software and other intangibles acquired relating to the acquisitions of 1Bill Holdings Pty Ltd and MyConnect
Holdings Pty Ltd. Refer to note F3.
2 Additions include amounts relating to the build of the Kraken enterprise software.
Goodwill is stated at cost less any accumulated impairment losses and is not amortised. Software and other intangible assets are stated at cost
less any accumulated impairment losses and accumulated amortisation. Amortisation is recognised as an expense on a straight-line basis over
the estimated useful lives of the intangible assets.
The average amortisation rate for software and other intangibles (excluding capital work in progress) was 6 per cent (2023: 9 per cent).
Key judgements and estimates
Recoverability of carrying values: The Group’s goodwill balance relates exclusively to the Retail CGU, which is disclosed as part of the
Energy Markets segment. The recoverable amount of the Retail CGU goodwill has been determined using a value-in-use model that
includes an appropriate terminal value. The value-in-use calculation is sensitive to a number of key assumptions requiring management
judgement, including future commodity prices, regulatory policies, and the outlook for the market supply-and-demand conditions.
Management does not believe that any reasonably possible changes in these assumptions would result in an impairment. More information
about the key inputs and assumptions in the value-in-use calculation are set out below.
Key assumptions
Energy Markets
Commodity prices
Future commodity price assumptions impact the recoverability of carrying values and are reviewed at least twice annually.
The Group’s estimate of future commodity prices is made with reference to internally derived forecast data, current spot
prices, external market analysts’ forecasts and forward curves. Where volumes are contracted, future prices reflect the
contracted price.
Long-term
growth rates
Cash flows are projected for the term of electricity PPAs and major wholesale supply contracts in the Retail CGU. Other Retail
CGU cash flows are projected for five years. The growth rate used to extrapolate Retail cash flows beyond the initial period
projected averages 2.5 per cent, analogous to long term Consumer Price Index.
Customer numbers
This is based on a review of actual customer numbers and historical data regarding levels of customer churn. The historical
analysis is considered against current and expected market trends and competition for customers.
Gross margin and
operating costs
This is based on a review of actual gross margins and cost per customer, and consideration of current and expected market
movements and impacts.
Discount rate
Discount rates used are the pre-tax equivalent of a post-tax discount rate of 7.5 per cent (2023: 7.5 per cent).
Climate risk
The Group continues to develop its assessment of the potential impacts of climate change and the transition to a low-carbon
economy and this has been considered in the assumptions used as part of the recoverable amount assessment.
110
Annual Report 2024
C5 Provisions
$m
Restoration1
Onerous
contracts2
Other3
Total
Balance as at 1 July 2023
593
62
160
815
Provisions recognised
247
61
27
335
Provisions released
(10)
(61)
(8)
(79)
Payments/utilisation
(9)
-
(59)
(68)
Unwinding of discounting
13
-
-
13
Effect of movements in foreign exchange rates
-
(1)
-
(1)
Balance as at 30 June 2024
834
61
120
1,015
Current
118
Non-current
897
Total provisions
1,015
1
The closing balance includes amounts relating to the restoration of the Eraring Power Station site and other generation gas power station locations. Also included within this
balance are rehabilitation provisions for contamination at existing and legacy operating sites.
2 All material contracts in which the unavoidable costs of meeting the obligations exceed the economic benefits are deemed onerous and require a provision to be recognised
upfront. This balance relates to an onerous contract provision of $61 million (US$40 million) for the LNG sales contract with Cameron (2023: $62 million (US$41 million)
provision for the LNG sales contract with ENN).
3 The closing balance of other provisions primarily relates to costs for compliance with safety standard requirements relating to the Eraring ash dam wall, costs associated with
the Eraring Power Station closure and a make good provision relating to existing property leases.
Restoration provisions are initially recognised at the best estimate of the costs to be incurred in settling the obligation. Where restoration
activities are expected to occur more than 12 months from the reporting date, the provision is discounted using a risk-free rate that reflects
current market assessments of the time value of money. The unwinding of the discount is recognised in each period as interest expense.
At each reporting date, the restoration provision is remeasured in line with changes in discount rates, and changes to the timing or amount
of costs to be incurred, based on current legal requirements and technology. Any changes in the estimated future costs associated with:
•
Restoration and dismantling are added to or deducted from the related asset; and
•
Environmental rehabilitation are expensed in the current period.
Key estimate
Restoration, rehabilitation and dismantling costs: The Group estimates the cost of future site restoration activities at the time of
installation or construction of an asset, or when an obligation arises. Restoration often does not occur for many years and thus significant
judgement is required as to the extent of work, cost and timing of future activities. Future social, regulatory and climate-related conditions
and policies may have an impact on these estimates and will continue to be monitored.
The expected closure date of Eraring has been reassessed to August 2027 following the execution of an agreement with the NSW
Government. Prevailing market conditions will continue to be assessed which will help inform the final timing of closure of all four units
at Eraring.
111
Financial Statements
C6 Other financial assets and liabilities
2024
2023
$m
Current
Non-current
Current
Non-current
Other financial assets
Measured at fair value through profit or loss
Settlement Residue Distribution Agreement units
77
52
73
56
Environmental scheme certificates
585
-
349
-
Investment fund units
-
64
-
61
Debt and other securities
10
109
7
100
Equity securities
-
5
-
1
Measured at fair value through other comprehensive income1
Equity securities
-
74
-
70
Measured at amortised cost
Futures collateral
82
-
38
-
Debt instruments
-
85
-
53
Total other financial assets
754
389
467
341
Other financial liabilities
Measured at fair value through profit or loss
Environmental scheme surrender obligations
334
-
369
-
Measured at amortised cost
Futures collateral
41
-
49
-
Total other financial liabilities
375
-
418
-
1
Other financial assets measured at fair value through other comprehensive income are investments the Group intends to hold for the long term for strategic purposes.
112
Annual Report 2024
D Capital, funding and risk management
This section focuses on the Group’s capital structure and related financing costs. Information is also presented about how the Group manages
capital, and the various financial risks to which the Group is exposed through its operating and financing activities.
D1 Capital management
The Group’s objective when managing capital is to make disciplined capital allocation decisions between investment in growth, distributions
to shareholders and to maintain an optimal capital structure while maintaining access to capital. Management believes that a strong
investment-grade credit rating (Baa2) and an appropriate level of net debt are required to meet these objectives. The Group’s current credit
rating is Baa2 (stable outlook) from Moody’s.
Key factors considered in determining the Group’s capital structure and funding strategy at any point in time include expected operating cash
flows, capital expenditure plans, the maturity profile of existing debt facilities, the dividend policy, and the ability to access funding from banks,
capital markets and other sources.
The Group monitors its capital requirements through a number of metrics including the gearing ratio (target range of approximately 20 to
30 per cent) and an adjusted net debt to adjusted underlying EBITDA ratio (target range of 2.0x to 3.0x). These targets are consistent with
attaining a strong investment-grade rating. Underlying EBITDA is a non-statutory (non-IFRS) measure.
The gearing ratio is calculated as adjusted net debt divided by adjusted net debt plus total equity. Net debt, which excludes cash held by
Origin to fund APLNG-related operations, is adjusted to take into account the effect of FX hedging transactions on the Group’s foreign
currency debt obligations. The adjusted net debt to adjusted underlying EBITDA ratio is calculated as adjusted net debt divided by adjusted
underlying EBITDA (Origin’s underlying EBITDA less Origin’s share of APLNG underlying EBITDA and Origin’s share of Octopus Energy
underlying EBITDA plus net cash flow from APLNG) over the relevant rolling 12-month period.
The Group monitors its current and future funding requirements for at least the next five years and regularly assesses a range of funding
alternatives to meet these requirements in advance of when the funds are required.
2024
2023
$m
$m
Borrowings
2,867
2,713
Lease liabilities
511
545
Total interest-bearing liabilities
3,378
3,258
Less: Cash and cash equivalents excluding APLNG-related cash1
(549)
(370)
Net debt
2,829
2,888
Fair value adjustments on FX hedging transactions
4
(11)
Adjusted net debt
2,833
2,877
Total equity
9,489
8,911
Total capital
12,322
11,788
Gearing ratio
23%
24%
Ratio of adjusted net debt to adjusted underlying EBITDA
1.0x
1.2x
1
This balance excludes $76 million (2023: $93 million) of cash held by Origin, as upstream operator, to fund APLNG-related operations.
A summary of key transactions is shown below.
Debt maturity
On 18 December 2023, upon maturity of its US Private Placement 2013 bonds, Origin repaid US$85 million.
Debt refinancing and extension
On 25 March 2024 Origin extended the tenor of US$200 million bank guarantee facilities from the 2025 financial year to the 2028
financial year.
On 1 May 2024 Origin extended the tenor of A$300 million bank guarantee facilities from the 2025 financial year to the 2027 financial year
and increased the facility capacity by A$50 million to A$350 million.
On 19 June 2024 Origin extended the tenor of A$1,572 million bank facilities from the 2025 financial year to the 2028/2029 financial year
and increased facility capacity by A$173 million to A$1,745 million.
New facilities raised
On 7 June 2024 Origin entered a new A$300 million Asian Term Loan maturing in the 2031 financial year.
113
Financial Statements
D2 Interest-bearing liabilities
2024
2023
$m
$m
Current
Capital market borrowings – unsecured
-
128
Total current borrowings
-
128
Lease liabilities – secured
68
64
Total current interest-bearing liabilities
68
192
Non-current
Bank loans – unsecured
810
515
Capital market borrowings – unsecured
2,057
2,070
Total non-current borrowings
2,867
2,585
Lease liabilities – secured
443
481
Total non-current interest-bearing liabilities
3,310
3,066
Borrowings are initially recorded at the amount of proceeds received (fair value) less transaction costs. After that date, the liability is amortised
to face value at maturity using an effective interest rate method.
Lease liabilities are initially measured at the present value of future lease payments discounted at the Group’s incremental borrowing rate.
Where a lease includes termination and/or extension options, the impact of these options on the amount of future payments is included where
exercise of such options is considered reasonably certain to occur. Interest expense is charged on outstanding lease liabilities that reduce over
time as periodic payments are made.
The lease liability is remeasured when certain events occur, including changes in the lease term or changes in future lease payments such as
those resulting from inflation-linked indexation or market rate rent reviews. On remeasurement of lease liabilities, a corresponding adjustment
is made to the ROU asset.
The contractual maturity of lease liabilities is disclosed within the liquidity table in note D5. Future cash outflows relating to leases that have
not yet commenced are disclosed in note G2.
The contractual maturities of non-current borrowings are as set out below.
2024
2023
$m
$m
One to two years
409
-
Two to five years
1,195
814
Over five years
1,263
1,771
Total non-current borrowings
2,867
2,585
Some of the Group’s borrowings are subject to terms that allow the lender to call on the debt in the event of a breach of covenants. As at
30 June 2024, the Group’s borrowings were in compliance with covenants.
114
Annual Report 2024
D3 Contributed equity
2024
2023
2024
2023
Number of shares
$m
Ordinary share capital
Opening balance
1,722,747,671
1,722,747,671
6,913
6,913
Less treasury shares:
Opening balance
(1,746,760)
(5,899,184)
(12)
(36)
Shares purchased on market
(5,280,000)
(500,000)
(55)
(4)
Utilisation of treasury shares on vesting of employee share schemes
2,042,297
4,652,424
15
28
Total treasury shares
(4,984,463)
(1,746,760)
(52)
(12)
Closing balance
1,717,763,208
1,721,000,911
6,861
6,901
Ordinary shares
Holders of ordinary shares are entitled to receive dividends as determined from time to time and are entitled to one vote per share at
shareholders’ meetings. In the event of the winding up of the Group, ordinary shareholders rank after creditors, and are fully entitled to any
proceeds of liquidation. The Group does not have authorised capital or par value in respect of its issued shares.
Treasury shares
Where the Group or other members of the Group purchase shares in the Company, the consideration paid is deducted from the total
shareholders’ equity and the shares are treated as treasury shares until they are subsequently sold, reissued or cancelled. Treasury shares are
purchased primarily for use on vesting of employee share schemes. Shares are accounted for at a weighted average cost.
D4 Reserves
Accumulated profits reserve
On 16 October 2023 the Board resolved to establish the Origin Energy Limited Accumulated Profits Reserve and to transfer the Company’s
accumulated undistributed net profits as at 1 October 2023 of $2,487 million to the accumulated profits reserve. The reserve has been
established to record profits available for future distribution by the Company. For the year ended 30 June 2024, the Company transferred
$893 million of profits from retained earnings to the reserve. This increase to the reserve was partially offset by the payment of the 2024
financial year interim dividend of $474 million on 28 March 2024.
D5 Financial risk management
Overview
The Group’s day-to-day operations, new investment opportunities and funding activities introduce financial risks, over which the Board Audit
and Risk Committee have oversight. These risks are grouped into the following categories:
•
Credit: The risk that a counterparty will not fulfil its financial obligations under a contract or other arrangement.
•
Market: The risk that fluctuations in commodity prices, foreign exchange rates and interest rates will adversely impact the Group’s result.
•
Liquidity: The risk that the Group will not be able to meet its financial obligations as they fall due.
Risk
Sources
Risk management framework
Financial exposure
Credit
Sale of goods
and services and
hedging activities
The Board approves credit risk
management policies that determine the
level of exposure it is prepared to accept.
Credit limits are allocated to counterparties
based on publicly available credit
information from recognised providers
where available.
Notes C1, C6 and D6 disclose the carrying amounts of
financial assets, which represent the Group’s maximum
exposure to credit risk at the reporting date. The Group
utilises International Swaps and Derivative Association
(ISDA) agreements to limit exposure to credit risk by
netting amounts receivable from and payable to individual
counterparties (refer to note G8).
Market
Purchase and sale
of commodities and
funding risks
The Board approves policies that ensure
the Group is not exposed to excess
risk from market volatility. These policies
include active hedging of price and volume
exposures within prescribed cash flow at
risk and value at risk limits.
See below for further discussion of market risk.
Liquidity
Ongoing business
obligations and new
investment
opportunities
The Group centrally manages its liquidity
position through cash flow forecasting
and maintenance of minimum levels of
liquidity determined by the Board. The
debt portfolio is periodically reviewed to
ensure there is funding flexibility and an
appropriate maturity profile.
Analysis of the Group’s liquidity profile as at the reporting
date is presented at the end of this section.
115
Financial Statements
D5 Financial risk management (continued)
Market risk
The scope of the Group’s operations and activities exposes it to multiple market risks. The table below summarises these risks by nature of
exposure and provides information about the risk mitigation strategies being applied.
Nature
Sources of financial exposure
Risk management strategy
Commodity price
Future commercial transactions and recognised assets and
liabilities exposed to changes in electricity, oil, gas, coal or
environmental scheme certificate prices
Due to vertical integration, a significant portion of the
Group’s spot electricity purchases from the NEM are
naturally hedged by generation sales into the NEM at
spot prices. The Group manages its remaining exposure
to commodity price fluctuations within Board-approved
limits using a mix of commercial contracts, such as fixed-
price purchase contracts, and derivative instruments as
described below.
Foreign exchange
Foreign-denominated borrowings and investments and future
foreign currency denominated commercial transactions
The Group limits its exposure to changes in foreign
exchange rates through forward foreign exchange
contracts and cross-currency interest rate swaps. In certain
circumstances, borrowings are left in a foreign currency, or
swapped from one foreign currency to another, to hedge
expected future business cash flows in that currency.
Significant foreign-denominated transactions undertaken
in the normal course of operations are managed on a
case-by-case basis.
Interest rate
Variable-rate borrowings (cash flow risk) and fixed-rate borrowings
(fair value risk)
Interest rate exposures are kept within an acceptable range
as determined by the Board. Risk limits are managed
through a combination of fixed-rate and fixed-to-floating
interest rate swaps.
Derivatives to manage market risks
Derivative instruments are contracts with values that are derived from an underlying price index, or other variable, that require little or no initial
net investment, and that are settled at a future date.
The Group uses the following types of derivative instruments to mitigate market risk.
Forwards
A contract documenting the underlying reference rate, such as benchmark price or exchange rate, to be paid or received on a
notional principal obligation at a future date.
Futures
An exchange-traded contract to buy or sell an asset for an agreed price at a future date. Futures are net-settled in cash without
physical delivery of the underlying asset.
Swaps
A contract in which two parties exchange a series of cash flows for another, such as fixed-for-floating interest rate.
Options
A contract in which the buyer has the right, but not the obligation, to buy (a call option) or sell (a put option) an instrument at
a fixed price in the future. The seller has the corresponding obligation to fulfil the transaction if the buyer exercises the option.
Structured
electricity products
A non-standardised contract, generally with an energy market participant, to acquire long-term capacity. These contracts
typically contain features similar to swaps and call options.
PPAs and battery
offtake agreements
A contract in which two parties agree to settle the difference between a fixed price and the spot electricity price (similar to a
swap). Typically, these contracts are long-term and either include a fixed notional electricity volume or reference the output of
a specific generation asset.
Derivatives are carried on the balance sheet at fair value. Movements in the price of the underlying variables, which cause the value of the
contract to fluctuate, are reflected in the fair value of the derivative.
Key judgements and estimates - Battery offtake agreements
PPAs are accounted for as derivatives based on guidance provided by the International Financial Reporting Interpretations Committee
(IFRIC) agenda decision in December 2021, Economic Benefits from Use of a Windfarm (IFRS 16 Leases). During the year, the Group
signed its first battery offtake agreement. Battery offtake agreements, that have comparable contracting arrangements to windfarms
considered by the IFRIC agenda decision, have been accounted for as derivatives and are carried on the balance sheet at fair value.
116
Annual Report 2024
D5 Financial risk management (continued)
Assets
Liabilities
$m
Current
Non-current
Current
Non-current
2024
Economic hedges
Commodity contracts
893
573
(705)
(751)
Foreign exchange and interest rate contracts
5
-
(10)
(4)
Total economic hedges
898
573
(715)
(755)
Accounting hedges
Commodity contracts
409
131
(44)
(17)
Foreign exchange and interest rate contracts
-
1
(32)
(13)
Total accounting hedges
409
132
(76)
(30)
Total
1,307
705
(791)
(785)
2023
Economic hedges
Commodity contracts
751
1,183
(706)
(1,051)
Foreign exchange and interest rate contracts
27
2
(10)
(10)
Total economic hedges
778
1,185
(716)
(1,061)
Accounting hedges
Commodity contracts
322
391
(185)
(82)
Foreign exchange and interest rate contracts
-
-
-
(31)
Total accounting hedges
322
391
(185)
(113)
Total
1,100
1,576
(901)
(1,174)
The method of recognising changes in fair value depends on whether the derivative is designated in an accounting hedge relationship.
Derivatives not designated as accounting hedges are referred to as economic hedges.
Fair value gains and losses attributable to economic hedges are recognised in the income statement and resulted in a $258 million loss (2023:
$270 million gain) for the year. Fair value gains and losses attributable to accounting hedges are discussed in the Hedge Accounting section.
Hedge accounting
The Group uses two types of hedge accounting relationships, as detailed below.
Fair value hedge
Cash flow hedge
Objective of
hedging
arrangement
To hedge our exposure to changes in the fair value of a recognised
asset or liability or unrecognised firm commitment, caused by
interest rate or foreign currency movements.
To hedge our exposure to variability in the cash flows of a
recognised asset or liability, or a highly probable forecast
transaction caused by commodity price, interest rate and
foreign currency movements.
Effective
hedge portion
All changes in the fair value of the underlying item relating to
the hedged risk and the change in fair value of derivatives are
recognised in profit and loss at the same time.
The effective portion of changes in the fair value of
derivatives designated as cash flow hedges are recognised
in the hedge reserve.
Hedge
ineffectiveness
Certain determinants of fair value, such as credit charges included in derivatives, or mismatches between the timing of
the instrument and the underlying item in the hedge relationship, can cause hedge ineffectiveness. Any ineffectiveness is
recognised immediately in profit or loss as a change in the fair value of derivatives.
Hedged item sold
or repaid
The unamortised fair value adjustment is recognised immediately
in profit or loss.
Amounts accumulated in the hedge reserve are transferred
immediately to profit or loss.
Hedging instrument
expires, is sold, is
terminated or no
longer qualifies for
hedge accounting
The unamortised fair value adjustment is recognised in profit or
loss when the hedged item is recognised in profit or loss. This may
occur over time if the hedged item is amortised over the period
to maturity.
The amount previously deferred in the hedge reserve is only
transferred to profit or loss when the hedged item is also
recognised in profit or loss.
At 30 June 2023 and 30 June 2024 all derivatives designated in hedge accounting relationships are cash flow hedges.
117
Financial Statements
D5 Financial risk management (continued)
Cash flow hedges
A number of derivative contracts have been designated as cash flow hedges of the Group’s exposure to foreign exchange, interest rate and
commodity price fluctuations. Designated derivatives include swaps, options, futures and forwards.
The Group’s structured electricity products, PPAs and battery offtake agreements, though important to the overall risk management strategy,
do not qualify for hedge accounting. As such, they are not represented in the summary information below.
2024
FX and interest
Electricity
Crude oil & gas
Propane
Nominal hedge volumes
EUR 600m
USD 566m
13.1 TWh
2,968k barrels (ICE Brent);
(1,780k) barrels (JCC);
9.0 tBtu (JKM)
114k mt
Hedge rates
AUD/EUR 0.62;
AUD/USD 0.65-0.67;
Fixed 3.2%
$21-$275/MWh
US$75-US$81/bbl
(ICE Brent);
US$80-US$94/bbl (JCC);
US$6.5-US$11.8/
MMBtu (JKM)
US$484-US$575
Timing of cash flows – up to
Sep 2029 (EUR);
Jun 2027 (USD)
Jun 2028
Oct 2026 (ICE Brent);
Jun 2025 (JCC);
Dec 2026 (JKM)
Dec 2027
FX and interest
Carrying amounts - $m
Electricity
Crude oil & gas
Propane
Total
Hedging instrument – assets1
1
454
78
8
541
Hedging instrument – liabilities1
(44)
(54)
(8)
-
(106)
Hedge reserve2
36
(400)
(70)
(8)
(442)
Fair value increase/(decrease) - $m
Hedging instrument
(12)
34
(20)
18
20
Hedged item
12
(34)
20
(18)
(20)
Hedge ineffectiveness3
-
-
-
-
-
Reconciliation of hedge reserve - $m
Effective portion of hedge gains/(losses)
(12)
246
(13)
20
241
Transfer of deferred losses/(gains) to:
– Cost of sales
-
(213)
(16)
(2)
(231)
– Finance costs
21
-
-
-
21
Tax on above items
(3)
(10)
9
(5)
(9)
Change in hedge reserve (post-tax)
6
23
(20)
13
22
1
Hedging instruments are included in the derivatives balance on the statement of financial position.
2 No hedges have been discontinued or de-designated in the current year.
3 Hedge ineffectiveness is recognised within expenses in the income statement as a change in fair value of derivatives.
118
Annual Report 2024
D5 Financial risk management (continued)
Market risk
The following is a summary of the Group’s market risk and the sensitivity of financial instrument fair values to reasonably possible changes in
market pricing at the reporting date.
Risk
Exposure
Relationship to financial instruments value
USD exchange rate
•
USD debt
•
FX and commodity derivatives with USD pricing
A 10 per cent increase/decrease in the USD exchange rate
would increase/(decrease) profit or loss by $127 million
(2023: $108/($113) million) and equity by ($66) million
(2023: ($7)/$9 million).
Euro exchange rate
•
Currency basis on the cross-currency interest rate
swaps (CCIRSs) swapping euro debt to AUD
A 10 per cent increase/decrease in the EUR exchange
rate would increase/(decrease) equity by $8 million (2023:
$10 million).
Interest rates
•
Interest rate swaps
•
Long-term derivatives and other financial assets/
liabilities for which discounting is significant
A 100 basis point increase/decrease in interest rates would
increase/(decrease) profit or loss by $2/($4) million (2023:
$8/($13) million) and equity by ($2)/$3 million (2023:
($4)/$4 million).
Electricity forward price
•
Electricity derivatives
A 10 per cent increase/decrease in electricity forward
prices would increase/(decrease) profit or loss by
$44 million (2023: ($1) million) and equity by $109 million
(2023: $106 million).
Oil forward price
•
Commodity derivatives
A 10 per cent increase/decrease in oil forward prices would
increase/(decrease) profit or loss by $(1) million (2023:
$178 million) and equity by $35 million (2023: $45 million).
Renewable Energy
Certificates (REC)
forward price
•
REC forwards
•
Environmental scheme certificates
•
Environmental scheme surrender obligations
A 10 per cent increase/decrease in REC forward prices
would increase/(decrease) profit or loss by $35 million
(2023: $29 million).
Liquidity risk
The table below sets out the timing of the Group’s payment obligations, as compared to the receipts expected from the Group’s financial
assets, and available undrawn facilities. Amounts are presented on an undiscounted basis and include cash flows not recorded on the
statement of financial position, such as interest payments for borrowings.
2024
$m
Less than
one year
One to
two years
Two to
five years
Over
five years
Bank loans and capital markets borrowings
(109)
(517)
(1,423)
(1,314)
Lease liabilities
(101)
(97)
(176)
(285)
Net other financial assets/liabilities
110
48
133
241
(100)
(566)
(1,466)
(1,358)
Derivative liabilities
(747)
(310)
(286)
(295)
Derivative assets
1,286
466
431
194
539
156
145
(101)
Net liquidity exposure
439
(410)
(1,321)
(1,459)
The Group had $549 million of cash and $2,888 million in committed undrawn floating rate borrowing facilities expiring beyond one year.
2023
$m
Less than
one year
One to
two years
Two to
five years
Over
five years
Bank loans and capital markets borrowings
(220)
(91)
(1,029)
(1,836)
Lease liabilities
(99)
(94)
(212)
(322)
Net other financial assets/liabilities
545
144
13
156
226
(41)
(1,228)
(2,002)
Derivative liabilities
(964)
(459)
(321)
(376)
Derivative assets
1,253
1,002
559
174
289
543
238
(202)
Net liquidity exposure
515
502
(990)
(2,204)
The Group had $370 million of cash and $2,849 million in committed undrawn floating rate borrowing facilities expiring beyond one year.
119
Financial Statements
D6 Fair value of financial assets and liabilities
Financial assets and liabilities measured at fair value are grouped into the following categories based on the level of observable market data
used in determining that fair value:
•
Level 1: The fair value of financial instruments traded in active markets, such as exchange-traded derivatives, is the quoted market price at
the end of the reporting period. These instruments are included in level 1.
•
Level 2: The fair value of financial instruments that are not traded in an active market, such as over-the-counter derivatives, is determined
using valuation techniques that maximise the use of observable market data. If all significant inputs required to fair value an instrument are
observable, either directly (as prices) or indirectly (derived from prices), the instrument is included in level 2.
•
Level 3: If one or more of the significant inputs required to fair value an instrument is not based on observable market data, the instrument
is included in level 3.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether
transfers should occur between levels in the hierarchy based on assessment of any changes in the source and observability of significant inputs
used in fair value measurements at the end of each reporting period.
2024
Note
Level 1
$m
Level 2
$m
Level 3
$m
Total
$m
Derivative financial assets
D5
571
1,124
317
2,012
Other financial assets measured at fair value
through profit or loss
Settlement Residue Distribution Agreement units
C6
129
-
-
129
Environmental scheme certificates
C6
585
-
-
585
Investment fund units
C6
-
64
-
64
Debt and other securities
C6
-
-
119
119
Equity securities
C6
5
-
-
5
Other financial assets measured at fair value
through other comprehensive income1
-
Equity securities
C6
16
-
58
74
Financial assets carried at fair value
1,306
1,188
494
2,988
Derivative financial liabilities
D5
(229)
(780)
(567)
(1,576)
Other financial liabilities measured at fair value
through profit or loss
Environmental scheme surrender obligations
C6
(334)
-
-
(334)
Financial liabilities carried at fair value
(563)
(780)
(567)
(1,910)
1
Other financial assets measured at fair value through other comprehensive income are investments the Group intends to hold for the long term for strategic purposes.
2023
Note
Level 1
$m
Level 2
$m
Level 3
$m
Total
$m
Derivative financial assets
D5
1,044
1,310
322
2,676
Other financial assets measured at fair value
through profit or loss
Settlement Residue Distribution Agreement units
C6
129
-
-
129
Environmental scheme certificates
C6
349
-
-
349
Investment fund units
C6
-
61
61
Debt and other securities
C6
-
7
100
107
Equity securities
C6
-
-
1
1
Other financial assets measured at fair value
through other comprehensive income1
Equity securities
C6
-
-
70
70
Financial assets carried at fair value
1,522
1,378
493
3,393
Derivative financial liabilities
D5
(592)
(883)
(600)
(2,075)
Other financial liabilities measured at fair value
through profit or loss
Environmental scheme surrender obligations
C6
(369)
-
-
(369)
Financial liabilities carried at fair value
(961)
(883)
(600)
(2,444)
1
Other financial assets measured at fair value through other comprehensive income are investments the Group intends to hold for the long term for strategic purposes.
120
Annual Report 2024
D6 Fair value of financial assets and liabilities (continued)
The following table shows a reconciliation of movements in the fair value of level 3 instruments during the year.
2024
$m
Balance as at 1 July 2023
(107)
New instruments recognised in the year
45
Instruments derecognised in the year
(22)
Net cash settlements paid/(received)
(81)
Gains/(losses) recognised in other comprehensive income
-
Gains/(losses) recognised in profit or loss
Change in fair value
11
Cost of sales
81
Balance as at 30 June 2024
(73)
2023
Balance as at 1 July 2022
455
New instruments recognised in the year
80
Net cash settlements paid/(received)
(257)
Gains/(losses) recognised in other comprehensive income
12
Gains/(losses) recognised in profit or loss
Change in fair value
(655)
Cost of sales
258
Balance as at 30 June 2023
(107)
Valuation techniques used to determine fair values
The various techniques used to value the Group’s financial instruments are summarised in the following table. To the maximum extent possible,
valuations are based on assumptions that are supported by independent and observable market data. For instruments that settle more
than 12 months from the reporting date, cash flows are discounted at the applicable market yield, adjusted to reflect the credit risk of the
specific counterparty.
Instrument
Fair value methodology
Financial instruments traded in
active markets
Quoted market prices at reporting date.
Interest rate swaps and CCIRSs
Present value of expected future cash flows, including interest, based on observable yield curves and forward
exchange rates at reporting date.
Forward foreign
exchange contracts
Present value of future cash flows based on observable forward exchange rates at reporting date.
Electricity, oil and other commodity
derivatives (not traded in
active markets)
Present value of expected future cash flows based on observable forward commodity price curves, where
available. The majority of the Group’s level 3 instruments are commodity contracts for which further detail on the
significant unobservable inputs is included below.
Other financial instruments
Discounted cash flow analysis or market comparison for comparable transactions.
Long-term borrowings
Present value of future contract cash flows.
Fair value measurements using significant unobservable inputs (level 3)
The following is a summary of the Group’s level 3 financial instruments, the significant inputs for which market observable data is unavailable,
and the sensitivity of the estimated fair values to the assumptions applied by management.
Instrument
Unobservable inputs
Relationship to fair value
Electricity
derivatives
Forward electricity swap price curve
Forward electricity cap price curve
Forecast REC prices
A 10 per cent increase/decrease in the unobservable inputs would
increase/(decrease) profit or loss by $169 million (2023: $201 million).
121
Financial Statements
D6 Fair value of financial assets and liabilities (continued)
Day 1 fair value adjustments
For certain complex financial instruments, such as structured electricity products, the fair value that is determined at inception of the contract
using unobservable inputs does not equal the transaction price. When this occurs, the difference is deferred to the statement of financial
position and recognised in the income statement over the life of the contract in a manner consistent with the valuation methodology
initially applied.
$m
Reconciliation of net deferred gain
Balance as at 1 July 2023
370
Value recognised in the income statement
(89)
New instruments recognised in the year
99
Balance as at 30 June 2024
380
Classification of net deferred gain
Derivative assets
269
Derivative liabilities
111
Balance as at 30 June 2024
380
Financial instruments are classified as assets or liabilities based on the position of the instrument’s net fair value which includes deferred gains
or losses.
Financial instruments measured at amortised cost
Except as noted below, the carrying amounts of non-current financial assets and liabilities measured at amortised cost are reasonable
approximations of their fair values.
The table below reflects debt instruments reported within non-current interest-bearing liabilities on the balance sheet. Non-current lease
liabilities, which are also reported within non-current interest-bearing liabilities are excluded. The fair value of these financial instruments
reflects the present value of expected future cash flows based on market pricing data for the relevant underlying interest and foreign exchange
rates. Cash flows are discounted at the applicable credit-adjusted market yield.
Carrying value
Fair value
Fair value
hierarchy level
2024
2023
2024
2023
$m
$m
$m
$m
Liabilities
Bank loans – unsecured
2
810
515
844
539
Capital markets borrowings – unsecured
2
2,057
2,070
1,901
1,975
Total1
2,867
2,585
2,745
2,514
1
Non-current interest-bearing liabilities in the statement of financial position include $2,867 million (2023: $2,585 million) as disclosed above, and lease liabilities of
$443 million (2023: $481 million).
122
Annual Report 2024
E Taxation
This section provides details of the Group’s income tax expense, current tax provision, deferred tax balances and tax accounting policies.
E1 Income tax expense
2024
2023
$m
$m
Income tax
Current tax expense
663
586
Adjustments to current tax expense for previous years
(11)
(2)
Deferred tax expense
(46)
(164)
Total income tax expense
606
420
Reconciliation between tax expense and pre-tax net profit
Profit before income tax
2,003
1,478
Income tax using the domestic corporation tax rate of 30 per cent (2023: 30 per cent)
Prima facie income tax expense on pre-tax accounting profit:
– at Australian tax rate of 30 per cent
601
443
– adjustment for tax exempt charity (Origin Foundation Limited)
(1)
(1)
– adjustment for difference between Australian and overseas tax rates
-
1
Income tax expense on pre-tax accounting profit at standard rates
600
443
Increase/(decrease) in income tax expense due to:
Share of results of equity accounted investees
(272)
(397)
Dividends received - APLNG
375
535
Deferred tax liability recognition/(utilisation) - APLNG
85
(180)
Reversal of impairment - APLNG equity accounted investment
(143)
-
Impairment - Carisbrook Solar Farm
4
-
Disposal - Beetaloo
-
1
LGC net shortfall (refund)/charge
(48)
35
Recycling of foreign currency translation reserve to the income statement on wind up - Origin Energy
Hydro Bermuda
-
(19)
Other
5
2
6
(23)
Total income tax expense
606
420
Deferred tax movements recognised directly in other comprehensive income and equity (including foreign
currency translation)
Financial instruments at fair value
7
(797)
Provisions
-
(5)
Other items
(4)
(3)
3
(805)
The Company and its wholly owned Australian resident entities that met the membership requirement formed a tax-consolidated group with
effect from 1 July 2003. The head entity within the tax-consolidated group is Origin Energy Limited. Tax funding arrangement amounts are
recognised as inter-entity amounts.
Income tax expense is made up of current tax expense and deferred tax expense. Current tax expense represents the expected tax payable on
the taxable income for the year, using current tax rates and any adjustment to tax payable in respect of previous years. Deferred tax expense
reflects the temporary differences between the accounting carrying amount of an asset or liability in the statement of financial position and
its tax base.
123
Financial Statements
E1 Income tax expense (continued)
International Tax Reform – Pillar Two Model Rules
As at the reporting date, legislation to implement the Pillar Two model rules published by the Organisation for Economic Co-operation and
Development (Pillar Two income taxes) had not been enacted or substantively enacted in the jurisdictions the Group operates in. The Group
continues to monitor the developments around the implementation and enactment of Pillar Two income taxes in the jurisdictions it operates
in and the detailed impact assessment of Pillar Two income taxes is ongoing.
Key judgements and estimates
Tax balances: Tax balances reflect a current understanding and interpretation of existing tax laws. Uncertainty arises due to the possibility
that changes in tax law or other future circumstances can impact the tax balances recognised in the financial statements. Ultimate
outcomes may vary.
Deferred taxes: The recognition of deferred tax balances requires judgement as to whether it is probable such balances will be utilised
and/or reversed in the foreseeable future and there will be sufficient future taxable profits against which the benefits can be utilised.
Deferred tax balances arise when there are temporary differences between accounting and the tax bases of assets and liabilities. A deferred
tax liability is recognised for equity accounted investees when the Group is not able to control the timing of the reversal of the temporary
difference or it is probable that the temporary difference will reverse in the foreseeable future.
The accounting carrying value of the Group’s investment in APLNG is significantly higher than the tax cost base, primarily as a result of the
equity accounted share of retained earnings to date.
A deferred tax liability has been recognised in respect of the investment in APLNG. It is measured based on the forecast distributions to
Origin via dividends from APLNG in the foreseeable future that are expected to be paid out of carried forward equity accounted retained
earnings. The forecast distributions mean that it is probable that the temporary difference will reverse, and consequently the deferred tax
liability being recognised. In determining the forecast distributions from APLNG, the Group’s assessment of future cash flows considers a
range of macroeconomic and project assumptions, including oil and LNG prices, AUD/USD exchange rates, discount rates and costs over
the asset’s life.
At 30 June 2024, a deferred tax liability of $613 million (2023: $528 million) has been recognised relating to the investment in APLNG. The
remaining unbooked balance is not expected to reverse in the foreseeable future through the payment of future dividends, through sale
or through a capital return. The unrecognised portion is disclosed in note E2.
Income tax expense recognised in other comprehensive income
2024
2023
$m
Gross
Tax
Net
Gross
Tax
Net
Investment valuation changes
(10)
3
(7)
12
(3)
9
Foreign currency translation reserve:
Reclassified to income statement
12
-
12
(62)
-
(62)
Translation of foreign operations
20
(1)
19
282
8
290
Cash flow hedges:
Reclassified to income statement
(210)
63
(147)
(2,224)
667
(1,557)
Effective portion of change in fair value
241
(72)
169
(433)
130
(303)
Other comprehensive income for the year
53
(7)
46
(2,425)
802
(1,623)
124
Annual Report 2024
E2 Deferred tax
Deferred tax balances arise when there are temporary differences between accounting carrying amounts and the tax bases of assets and
liabilities, other than where:
•
the difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither
the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences;
•
temporary differences relate to investments in subsidiaries, associates and interests in joint arrangements, to the extent the Group is able
to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
•
temporary differences arise on initial recognition of goodwill.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability
is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can
be utilised. Deferred tax assets are reduced if it is no longer probable that the related tax benefit will be realised.
Movement in temporary differences during the year
Asset/(liability)
$m
1 July
2022
Recognised
in income
Recognised
in equity
Recognised
in current
tax liability
30 June
2023
Recognised
in income
Recognised
in equity
Acquisition
of
subsidiaries
30 June
2024
Employee benefits
84
14
-
-
98
22
-
1
121
Provisions
423
(114)
5
-
314
103
-
-
417
Tax value of carry-forward tax
losses recognised
1
-
-
-
1
(1)
-
-
-
PP&E
(179)
41
-
-
(138)
(79)
-
-
(217)
Exploration and
evaluation assets
(80)
78
-
-
(2)
2
-
-
-
Financial instruments at
fair value
(936)
(40)
797
-
(179)
65
(7)
-
(121)
Investment in APLNG
(708)
180
-
-
(528)
(85)
-
-
(613)
APLNG MRCPS elimination
(refer to note B2.3)
33
-
-
-
33
(1)
-
-
32
Business-related costs
(deductible under
s.40-880 ITAA97)
6
4
-
-
10
15
-
-
25
ROU assets
(139)
(1)
-
-
(140)
12
-
-
(128)
Lease liabilities
161
3
-
-
164
(11)
-
-
153
Intangibles
(23)
1
-
-
(22)
3
-
(1)
(20)
Other items
(2)
(2)
3
4
3
1
4
-
8
Net deferred tax liabilities
(1,359)
164
805
4
(386)
46
(3)
-
(343)
Unrecognised deferred tax assets and liabilities
2024
2023
$m
$m
Deferred tax assets have not been recognised in respect of the following items:
Revenue losses - non-Australian
5
4
Petroleum resource rent tax, net of income tax
119
119
Acquisition transaction costs
57
57
Intangible assets
8
8
189
188
Deferred tax liabilities have not been recognised in respect of the following items:
Investment in APLNG1
(628)
(759)
(628)
(759)
1
The deferred tax liability in respect of the investment in APLNG has not been recognised in full during the year as not all of the temporary difference is expected to reverse
in the foreseeable future.
125
Financial Statements
F Group structure
The following section includes provides information on the Group’s structure and how this impacts the results of the Group as a whole,
including details of joint arrangements, associates, controlled entities, and changes made to the Group structure during the year.
F1 Controlled entities
The financial statements of the Group include the consolidation of Origin Energy Limited and controlled entities. Controlled entities are the
following entities controlled by the parent entity (Origin Energy Limited).
Incorporated in
Ownership interest per cent
2024
2023
Origin Energy Limited
Australia
Origin Energy Power Limited1
Australia
100
100
Origin Energy SWC Limited1
Australia
100
100
Sun Spot 5 Pty Ltd
Australia
100
100
Sun Spot 6 Pty Ltd
Australia
100
100
Yarrabee Project Co Pty Ltd
Australia
100
100
Yarrabee Project Trust
Australia
100
100
Yarrabee One Pty Ltd
Australia
100
100
Yarrabee One Trust
Australia
100
100
Origin Energy Wind North Pty Ltd
Australia
100
100
Navigator North Holding Pty Ltd
Australia
80
80
Navigator North Project Pty Ltd
Australia
80
80
Origin Energy Wind North Trust
Australia
100
100
Navigator North Holding Trust
Australia
80
80
Navigator North Project Trust
Australia
80
80
Origin Energy Wind South Pty Ltd
Australia
100
100
Navigator South Holding Pty Ltd
Australia
80
80
Navigator South Project Pty Ltd
Australia
80
80
Origin Energy Wind South Trust
Australia
100
100
Navigator South Holding Trust
Australia
80
80
Navigator South Project Trust
Australia
80
80
Origin Energy Wind East Pty Ltd
Australia
100
-
Origin Energy Wind East Trust
Australia
100
-
Usses Pty Ltd
Australia
100
-
Templers Energy Trust
Australia
100
-
Templers Energy Pty Ltd
Australia
100
-
Northern Tablelands WF Holding Pty Ltd
Australia
100
-
Northern Tablelands WF Project Pty Ltd
Australia
100
-
Northern Tablelands WF Holding Trust
Australia
100
-
Northern Tablelands WF Project Trust
Australia
100
-
Dapper SF Holding Pty Ltd
Australia
100
-
Dapper SF Project Pty Ltd
Australia
100
-
Dapper SF Holding Trust
Australia
100
-
Dapper SF Project Trust
Australia
100
-
WalchaEnergy Pty Ltd
Australia
100
-
WalchaEnergy Unit Trust
Australia
100
-
Salisbury Solar Pty Ltd
Australia
100
-
RubyHillsWind Pty Ltd
Australia
100
-
WalchaLink Pty Ltd
Australia
100
-
UrallaHub Pty Ltd
Australia
100
-
BrackendaleWind Pty Ltd
Australia
100
-
Origin Energy Eraring Pty Limited1
Australia
100
100
Origin Energy Eraring Services Pty Limited1
Australia
100
100
1
Entered into ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 and related Deed of Cross Guarantee with Origin Energy Limited.
126
Annual Report 2024
F1 Controlled entities (continued)
Incorporated in
Ownership interest per cent
2024
2023
Origin Energy Battery Head Fund Pty Ltd
Australia
100
-
Origin Energy Battery Fund Pty Ltd
Australia
100
-
Origin Energy Eraring Battery 2 Holding Pty Ltd
Australia
100
-
Origin Energy Eraring Battery 2 Project Pty Ltd
Australia
100
-
Origin Energy Mortlake Battery Holding Pty Ltd
Australia
100
-
Origin Energy Mortlake Battery Project Pty Ltd
Australia
100
-
Origin Energy Battery Head Fund Trust
Australia
100
-
Origin Energy Battery Fund Trust
Australia
100
-
Origin Energy Eraring Battery 2 Holding Trust
Australia
100
-
Origin Energy Eraring Battery 2 Project Trust
Australia
100
-
Origin Energy Mortlake Battery Holding Trust
Australia
100
-
Origin Energy Mortlake Battery Project Trust
Australia
100
-
Origin Energy Renewable Head Fund Pty Ltd
Australia
100
-
Origin Energy Renewable Fund Pty Ltd
Australia
100
-
Yanco Delta WF Holding Pty Ltd
Australia
100
-
Yanco Delta WF Project Pty Ltd
Australia
100
-
Origin Energy Renewable Head Fund Trust
Australia
100
-
Origin Energy Renewable Fund Trust
Australia
100
-
Yanco Delta WF Holding Trust
Australia
100
-
Yanco Delta Wind Farm Pty Ltd
Australia
100
-
Yanco Delta WF Project Trust
Australia
100
-
Origin Energy Finance Limited
Australia
100
100
Huddart Parker Pty Limited1
Australia
100
100
FRL Pty Ltd1
Australia
100
100
Origin Energy Upstream Holdings Pty Ltd
Australia
100
100
Origin Energy Browse Pty Ltd
Australia
100
100
Origin Energy West Pty Ltd
Australia
100
100
Origin Energy C6 Pty Limited
Australia
100
100
Origin Energy C5 Pty Limited
Australia
100
100
Origin Energy Future Fuels Pty Ltd
Australia
100
100
Origin Energy Future Fuels (Gladstone) Pty Ltd
Australia
100
-
Origin Energy Future Fuels (Avondale) Pty Ltd
Australia
100
-
Origin Energy Upstream Operator Pty Ltd
Australia
100
100
Origin Energy Holdings Pty Limited1
Australia
100
100
Origin Energy Retail Limited1
Australia
100
100
Origin Energy (Vic) Pty Limited1
Australia
100
100
Origin Zero Investments Pty Ltd1
Australia
100
100
Origin Energy (TM) Pty Limited1
Australia
100
100
Cogent Energy Pty Ltd
Australia
100
100
Origin Energy Retail No. 1 Pty Limited
Australia
100
100
Origin Energy Retail No. 2 Pty Limited
Australia
100
100
Origin Energy Electricity Limited1
Australia
100
100
Eraring Gentrader Depositor Pty Limited
Australia
100
100
Sun Retail Pty Ltd1
Australia
100
100
OE Power Pty Limited1
Australia
100
100
Origin Energy Uranquinty Power Pty Ltd1
Australia
100
100
OC Energy Pty Ltd1
Australia
100
100
Origin Energy Eraring Battery Pty Ltd
Australia
100
100
1
Entered into ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 and related Deed of Cross Guarantee with Origin Energy Limited.
127
Financial Statements
F1 Controlled entities (continued)
Incorporated in
Ownership interest per cent
2024
2023
Ten Ants Connect Pty Ltd
Australia
100
100
WINconnect Pty Ltd1
Australia
100
100
Nextgen Utilities Pty Ltd
Australia
100
100
Carbon Energy Management Technologies Pty Ltd
Australia
100
100
LM Unit Trust (No 1)
Australia
100
100
Carbon R&D Pty Ltd
Australia
100
100
MyConnect Holdings Pty Ltd
Australia
100
-
MyConnect Trading Pty Ltd
Australia
100
-
1Bill Holdings Pty Ltd
Australia
100
-
Thought World Pty Ltd
Australia
100
-
1Bill Pty Ltd
Australia
100
-
Thought World Investments Pty Ltd
Australia
100
-
Compare & Connect NZ Limited
New Zealand
100
-
Fast Connect Limited
New Zealand
100
-
Residential Connections Pty Ltd
Australia
100
-
YP Connect Pty Ltd
Australia
100
-
YourPorter Pty Ltd
Australia
100
-
YourPorter Unit Trust
Australia
100
-
Origin Energy International Holdings Pty Limited
Australia
100
100
Origin Energy PNG Ltd2
PNG
-
66.7
Origin Energy PNG Holdings Limited2
PNG
100
100
Origin Energy Tasmania Pty Limited1
Australia
100
100
The Fiji Gas Co Ltd
Fiji
-
51
Origin Energy Contracting Limited1
Australia
100
100
Origin Energy LPG Limited1
Australia
100
100
Origin (LGC) (Aust) Pty Limited1
Australia
100
100
Origin Energy SA Pty Limited1
Australia
100
100
Hylemit Pty Limited
Australia
100
100
Origin Energy LPG Retail (NSW) Pty Limited
Australia
100
100
Origin Energy WA Pty Limited1
Australia
100
100
Origin Energy Services Limited1
Australia
100
100
OEL US Inc.
USA
100
100
Origin Energy Asset Management Limited1
Australia
100
100
Origin Energy Pipelines Pty Limited1
Australia
100
100
Origin Energy Solomons Ltd
Solomon Islands
-
80
Origin Energy Cook Islands Ltd
Cook Islands
-
100
Origin Energy Vanuatu Ltd
Vanuatu
-
100
Origin Energy Samoa Ltd
Western Samoa
-
100
Origin Energy American Samoa Inc
American Samoa
-
100
Origin Energy Insurance Singapore Pte Ltd
Singapore
100
100
Angari Pty Limited1
Australia
100
100
Oil Investments Pty Limited1
Australia
100
100
Origin Energy Southern Africa Holdings Pty Limited
Australia
100
100
Origin Energy Vietnam Pty Limited
Australia
100
100
Origin Energy Singapore Holdings Pte Limited
Singapore
100
100
Origin Energy (Song Hong) Pte Limited
Singapore
100
100
Origin Future Energy Pty Limited
Australia
100
100
Origin Energy Metering Coordinator Pty Ltd
Australia
100
100
Origin Energy Resources NZ (Rimu) Limited
New Zealand
100
100
1
Entered into ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 and related Deed of Cross Guarantee with Origin Energy Limited.
2 Controlled entity has a financial reporting period ending 31 December.
128
Annual Report 2024
F1 Controlled entities (continued)
Incorporated in
Ownership interest per cent
2024
2023
Origin Energy VIC Holdings Pty Limited1
Australia
100
100
OE JV Co Pty Limited1
Australia
100
100
Origin Energy LNG Holdings Pte Limited
Singapore
100
100
Origin Energy LNG Portfolio Pty Ltd1
Australia
100
100
Origin Energy Australia Holding BV2
Netherlands
100
100
Origin Energy Mt Stuart BV2
Netherlands
100
100
OE Mt Stuart General Partnership2
Netherlands
100
100
Parbond Pty Limited
Australia
100
100
Origin Energy Foundation Ltd
Australia
100
100
Origin Renewable Energy Investments No 1 Pty Ltd
Australia
100
100
Origin Renewable Energy Investment Trust
Australia
100
100
Origin Renewable Energy Pty Ltd
Australia
100
100
Origin Energy Geothermal Holdings Pty Ltd
Australia
100
100
Origin Energy Geothermal Pty Ltd
Australia
100
100
Origin Energy Chile Holdings Pty Limited
Australia
100
100
Origin Energy Wind Holdings Pty Ltd
Australia
100
100
Wind Power Pty Ltd
Australia
100
100
Origin Energy People Services Pty Ltd1
Australia
100
100
Origin Energy Upstream People Services Pty Ltd1
Australia
100
100
Origin Energy Executive Share Plan Trust3
Australia
100
100
Origin Energy Limited Employee Share Trust3
Australia
100
100
1
Entered into ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 and related Deed of Cross Guarantee with Origin Energy Limited.
2 Controlled entity has a financial reporting period ending 31 December.
3 Holds assets on behalf of employees.
129
Financial Statements
F2 Changes in controlled entities
On 1 September 2023, 1Bill Holdings Pty Ltd, Thought World Pty Ltd, 1Bill Pty Ltd, Thought World Investments Pty Ltd, Residential
Connections Pty Ltd, YP Connect Pty Ltd, YourPorter Pty Ltd, Compare & Connect NZ Limited, Fast Connect Limited and YourPorter Unit
Trust were acquired.
On 28 September 2023, Origin Energy PNG Ltd, The Fiji Gas Co. Ltd, Origin Energy Solomons Ltd, Origin Energy American Samoa Inc., Origin
Energy Cook Islands Ltd, Origin Energy Samoa Ltd and Origin Energy Vanuatu Ltd were sold.
On 1 November 2023, MyConnect Trading Pty Ltd and MyConnect Holdings Pty Ltd were acquired.
On 2 November 2023, Usses Pty Ltd, Templers Energy Pty Ltd and Templers Energy Trust were acquired.
On 6 November 2023, Origin Energy Wind East Pty Ltd was incorporated.
On 9 November 2023, Origin Energy Wind East Trust was established.
On 23 November 2023, Origin Energy Future Fuels (Gladstone) Pty Ltd was incorporated.
On 30 January 2024, Northern Tablelands WF Holding Pty Ltd, Northern Tablelands WF Project Pty Ltd, Dapper SF Holding Pty Ltd and
Dapper SF Project Pty Ltd were incorporated.
On 30 January 2024, Northern Tablelands WF Holding Trust, Northern Tablelands WF Project Trust, Dapper SF Holding Trust and Dapper SF
Project Trust were established.
On 9 February 2024, WalchaEnergy Pty Ltd, Salisbury Solar Pty Ltd, RubyHillsWind Pty Ltd, WalchaLink Pty Ltd, UrallaHub Pty Ltd,
BrackendaleWind Pty Ltd and WalchaEnergy Unit Trust were acquired.
On 3 April 2024, Origin Energy Renewable Head Fund Pty Ltd, Origin Energy Renewable Fund Pty Ltd and Yanco Delta WF Holding Pty Ltd
were incorporated.
On 5 April 2024, Yanco Delta WF Project Pty Ltd was incorporated.
On 8 April 2024, Yanco Delta WF Project Trust was established.
On 8 April 2024, Origin Energy Renewable Head Fund Trust, Origin Energy Renewable Fund Trust, and Yanco Delta WF Holding Trust
were established.
On 9 April 2024, Gasmart (Vic) Pty Ltd changed its name to Origin Zero Investments Pty Ltd.
On 7 May 2024, Origin Energy Future Fuels (Avondale) Pty Ltd was incorporated.
On 29 May 2024, Yanco Delta Wind Farm Pty Ltd was acquired.
On 4 June 2024, Origin Energy Battery Fund Pty Ltd and Origin Energy Battery Head Fund Pty Ltd were incorporated.
On 4 June 2024, Origin Energy Battery Head Fund Trust was established.
On 5 June 2024, Origin Energy Eraring Battery 2 Holding Pty Ltd, Origin Energy Eraring Battery 2 Project Pty Ltd, Origin Energy Mortlake
Battery Holding Pty Ltd and Origin Energy Mortlake Battery Project Pty Ltd were incorporated.
On 5 June 2024, Origin Energy Eraring Battery 2 Holding Trust and Origin Energy Eraring Battery 2 Project Trust were established.
On 7 June 2024, Origin Energy Battery Fund Trust was established.
On 19 June 2024, Origin Energy Mortlake Battery Holding Trust and Origin Energy Mortlake Battery Project Trust were established.
F3 Business combinations
During the year the Group acquired two retail aggregators to add to Origin’s Retail business. The acquisition of 100 per cent of the formerly
privately held 1Bill Holdings Pty Ltd was completed on 1 September 2023 and the acquisition of 100 per cent of the formerly privately held
MyConnect Holdings Pty Ltd was completed on 1 November 2023.
The overall impact of the acquisition to the Group’s consolidated revenue and profit and loss since the acquisition date is not significant. Total
purchase consideration of $136 million was paid to acquire the net assets on completion date. Given the acquired cash balance from the
transactions was $1 million, the net cash impact from the acquisitions was $135 million and has been recognised in investing cashflow.
The acquisitions have been accounted for as Business Combinations, with total net assets acquired of $9 million, intangibles recognised
on consolidation of $127 million, including goodwill. The goodwill comprises of synergies expected to arise from the acquisition of the
retail aggregators and the Retail business. In accordance with the Group’s accounting policies, the fair value of the net assets acquired are
provisional and will be subject to further review for a period of up to 12 months from the dates of acquisition.
130
Annual Report 2024
F4 Joint arrangements and investments in associates
Joint arrangements are entities over whose activities the Group has joint control, established by contractual agreement and requiring the
consent of two or more parties for strategic, financial and operating decisions. The Group classifies its interests in joint arrangements as either
joint operations or joint ventures, depending on its rights to the assets and obligations for the liabilities of the arrangements.
Associates are entities, other than partnerships, for which the Group exercises significant influence, but no control, over the financial and
operating policies, and which are not intended for sale in the near future.
Of the Group’s interests in joint arrangements and associates, only APLNG and Octopus Energy had a material impact on the Group at 30 June
2024 (refer to Section B).
Interests in unincorporated joint operations
The Group’s interests in unincorporated joint operations are brought to account on a line-by-line basis in the income statement and statement
of financial position. These interests are held on the following assets whose principal activities are oil and/or gas exploration and development
and geothermal exploration:
•
Browse Basin
•
Innamincka Deeps Geothermal
•
Cooper-Eromanga Basin
F5 Disposals
LPG Pacific
On 8 November 2022 the Group entered into an agreement to sell Origin’s LPG business in the Pacific. This includes the Group’s
wholly-owned entities in Vanuatu, American Samoa, Samoa and the Cook Islands, and controlled entities in Fiji, Papua New Guinea and the
Solomon Islands. The net assets of these entities were classified as held for sale at 30 June 2023.
The sale was completed on 28 September 2023 and a gain on sale of $12 million before tax and transaction costs was recognised in the year.
Reconciliation of gain on sale
2024
$m
Consideration (net of transaction costs)
69
Net assets disposed
(65)
Reserves reclassified to profit and loss on sale
(12)
Non-controlling interest disposed
20
Gain on sale before income tax expense
12
Reconciliation of cash consideration
2024
$m
Consideration
71
Less: Transaction costs
(2)
Consideration (net of transaction costs)
69
Less: Cash and cash equivalents disposed
(11)
Consideration (net of cash disposed)
58
Canning Basin
On 10 February 2023 Origin executed an agreement with Buru Energy Limited (Buru) to exit from its participating interests in the seven
exploration permits in the Canning Basin, the respective Joint Operating Agreements and the Farm-in Agreements. The net assets relating to
Canning Basin were classified as held for sale at 30 June 2023.
The terms of the sale require Origin to provide Buru with up to $4 million to fund a seismic survey and for Buru to provide Origin with future
reimbursement payments of up to $34 million, conditional on the achievement of key development and production milestones. Completion
of the transaction occurred on 7 November 2023 and resulted in a pre-tax loss on disposal of $3 million.
Beetaloo
On 19 September 2022 the Group entered into a Share Sale Agreement with Tamboran (B1) Pty Ltd for the sale of 100% of the shares of
Origin Energy B2 Pty Ltd, which holds a 77.5 per cent interest in three exploration permits in the Beetaloo Basin. Completion of the transaction
occurred on 9 November 2022 for upfront consideration of $60 million and a royalty based on wellhead revenues produced from the three
Beetaloo permits. This resulted in a pre-tax loss on disposal of $106 million in the prior year.
Origin Energy Hydro Bermuda Pty Limited
On 10 January 2023 Origin Energy Hydro Bermuda Pty Limited was wound up. A net gain on disposal of $62 million was recycled to the
income statement from the foreign currency translation reserve on wind up in the prior year.
131
Financial Statements
G Other information
This section includes other information to assist in understanding the financial performance and position of the Group, and items required to
be disclosed to comply with Accounting Standards and other pronouncements.
G1 Contingent liabilities
Discussed below are items where there is a possible obligation whose existence will be confirmed only by uncertain future events not wholly
within the Group’s control, or where a present obligation exists, it is either not probable that the Group will have to make future payments, or
the amount of future payments is not capable of reliable measurement.
Joint arrangements and associates
As a participant in certain joint arrangements, the Group is liable for its share of liabilities incurred by these arrangements. In some
circumstances, the Group may incur more than its proportionate share of such liabilities but will have the right to recover the excess liability
from the other joint arrangement participants.
In October 2018, Origin and the other APLNG shareholders agreed to indemnify one of APLNG’s long-term LNG customers (following that
customer’s election to defer delivery of 30 cargoes over six years (2019-24)) should APLNG fail to supply make-up cargoes to that customer
prior to the expiry of the LNG supply contract. The customer will pay APLNG for the deferred cargoes and APLNG expects to resell the
gas to other customers and deliver the deferred cargoes to the long-term LNG customer between 2025 and the end of the LNG supply
contract. The indemnity was provided severally in accordance with each shareholder’s proportionate shareholding in APLNG. At the inception
of the agreement, any obligation or liability on the part of the shareholders will only be confirmed by the occurrence or non-occurrence of
future events.
Legal and regulatory
Certain entities within the Group (and joint venture entities, such as APLNG) are subject to various lawsuits and claims as well as audits
and reviews by government, regulatory bodies or other joint venture partners. In most instances, it is not possible to reasonably predict the
outcome of these matters or their impact on the Group and accordingly is not probable that future payments will be made. Where outcomes
can be reasonably predicted, provisions are recorded.
A number of sites owned/operated (or previously owned/operated) by the Group have been identified as potentially contaminated. For sites
where it is likely that a present obligation exists, and it is probable that an outflow of resources will be required to settle the obligation, such
costs have been expensed or provided for.
Warranties and indemnities have also been given and/or received by entities in the Group in relation to environmental liabilities for certain
properties divested and/or acquired.
Capital expenditure
As part of the acquisition of Browse Basin exploration permits in 2015, the Group agreed to pay cash consideration of US$75 million
contingent upon a project Final Investment Decision (FID), and US$75 million contingent upon first production. The Group will pay further
contingent consideration of up to US$50 million upon first production if 2P (proven plus probable) reserves, at the time of the FID, reach
certain thresholds. These obligations have not been provided for at the reporting date as they are possible obligations that are dependent
upon uncertain future events not wholly within the Group’s control.
Under the terms of the acquisition of Ruby Hills Wind Farm and Salisbury Solar Farm in 2024, the Group agreed to pay cash consideration of
up to $13 million contingent upon future project milestones. This obligation has not been provided for at the reporting date as it is a possible
obligation that is dependent upon uncertain future events not wholly within the Group’s control.
As part of the acquisition of Yanco Delta Wind Farm development project in 2024, the Group agreed to pay cash consideration of up to
$175 million contingent on the project achieving certain development milestones. This obligation has not been provided for at reporting date
as it is a possible obligation that is dependent upon uncertain future events not wholly within the Group’s control.
Bank guarantees
There are no contingent liabilities arising from bank guarantees held by the Group that are required to be disclosed as at the reporting date,
as these have either been provided for, or an outflow of economic benefits is considered remote.
The Group’s share of guarantees for certain contractual commitments of its joint ventures is shown at note G2.
132
Annual Report 2024
G2 Commitments
Detailed below are the Group’s contractual commitments that are not recognised as liabilities as there is no present obligation.
2024
2023
$m
$m
Capital expenditure commitments
774
786
Joint venture commitments1
177
183
1
Includes $176 million (2023: $180 million) in relation to the Group’s share of APLNG’s capital and joint venture commitments.
The Group also had a lease contract that had not yet commenced as at 30 June 2024. The future lease payments for this lease contract are
$2 million within one year, $10 million within two to five years and $6 million thereafter.
G3 Share-based payments
This section sets out details of the Group’s share-based remuneration arrangements, including details of the Company’s Equity Incentive Plan
and Employee Share Plan (ESP).
The table below shows share-based remuneration expenses that were recognised during the year.
2024
2023
$m
$m
Equity Incentive Plan
22
25
Employee Share Plan
4
1
Total
26
26
Equity Incentive Plan
Eligible employees are granted share-based remuneration under the Origin Energy Limited Equity Incentive Plan. Participation in the plan is
at the Board’s discretion and no individual has a contractual right to participate or to receive any guaranteed benefits. Equity incentives are
granted in the form of Share Rights and/or Restricted Shares (RSs). Only RSs carry dividend and voting entitlements. To the extent that Share
Rights ultimately vest, a dividend equivalent mechanism operates.
(i) Short Term Incentive
Short Term Incentive (STI) includes the award of RSs, which are subject to trading restrictions for a set period of time (generally up to
two years), after which they become unrestricted, provided that the employee remains employed with satisfactory performance. Once
unrestricted, the shares are transferred into the employee’s name at no cost. The face value of RSs measured at grant date is recognised as an
employee expense over the related service period. RSs are forfeited if the service and performance conditions are not met. Testing against the
performance condition occurs at the end of the three-year performance period (for Performance Share Rights (PSRs) grants made in February
2024 the performance period is 2.85 years).
(ii) Long Term Incentive
The Long Term Incentive (LTI) awards include the award of Share Rights, which vest subject to performance conditions. Generally, half of each
LTI award is made in the form of PSRs and is subject to a market hurdle, namely Origin’s Total Shareholder Return (TSR) relative to a Reference
Group of ASX-listed companies, as identified in the 2024 Remuneration Report. The remaining half of each LTI award is made in the form of
Restricted Share Rights (RSRs), where vesting is subject to Board assessment with reference to a suite of underpinning conditions, as set out
in the 2024 Remuneration Report.
The number of awards that may vest are considered separately for PSRs and RSRs. For the PSR awards, which are subject to the relative TSR
hurdle, vesting only occurs if Origin’s TSR over the performance period ranks higher than the 50th percentile of the Reference Group. Half of
the PSRs vest if that condition is satisfied. All the PSRs vest if Origin ranks at or above the 75th percentile of the Reference Group. Straight-line
pro-rata vesting applies in between these two points. The PSR and RSR tranches vest into RSs with a trading restriction for up to additional
two years (total deferral five years).
Vested share rights are automatically exercised upon vesting, and there is no exercise price. Upon exercise, a vested award is converted into
one fully paid ordinary share that is subject to a post-vesting holding lock for a set period (generally up to two years) and carries voting and
dividend entitlements. At vest, a dividend equivalent amount is delivered in the form of additional shares equal in value (as determined by the
Board) to the amount of dividends that would have been paid and re-invested had the participant held the underlying shares during the period
from the grant date through to the relevant vesting date.
The fair value of the awards granted is recognised as an employee expense, with a corresponding increase in equity, over the vesting period.
In exceptional circumstances4, unvested Share Rights may be held ‘on foot’ subject to the specified performance hurdles and other plan
conditions being met, or dealt with in an appropriate manner determined by the Board.
4
The Equity Incentive Plan Rules provide that Share Rights, and RSs arising from STI arrangements, are forfeited on cessation of employment, except in ‘good leaver’
circumstances or unless the Board determines otherwise.
133
Financial Statements
G3 Share based payments (continued)
For PSRs subject to the relative TSR condition, fair value is measured at grant date using a Monte Carlo simulation model that takes into
account the exercise price, share price at grant date, price volatility, dividend yield, risk-free interest rate for the term of the security, and the
likelihood of meeting the TSR market condition.
The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future
trends, which may not necessarily be the actual outcome. The amount recognised as an expense is adjusted to reflect the actual number of
awards that vest except where due to non-achievement of the TSR market condition. Set out below are the inputs used to determine the fair
value of the PSRs granted during the year.
For RSRs subject to the underpinning conditions, the initial fair value at grant date is the market value of an Origin share, and the recognised
expense is trued up at each reporting period to the expected outcome as assessed at that time.
Set out below is a summary of PSRs issued during the financial year and PSRs and RSRs issued in the prior financial year.
2024
PSRs
Grant date
28 Feb 2024
Grant date share price
$8.95
Exercise price
Nil
Volatility
34%
Risk-free rate1
3.73%
Grant date fair value (per award)
$5.79
2023
RSRs
RSRs
PSRs
PSRs
Grant date
05 Sep 2022
19 Oct 2022
05 Sep 2022
19 Oct 2022
Grant date share price
$6.13
$5.64
$6.13
$5.64
Exercise price
Nil
Nil
Nil
Nil
Volatility
-
-
38%
38%
Risk-free rate1
-
-
3.29%
3.48%
Grant date fair value (per award)
$6.13
$5.64
$3.63
$3.17
1
Where the risk-free rate is nil, these RSR tranches are subject to a number of underpinning conditions to be assessed by the Board; therefore, the risk-free rate is not relevant
to their valuation.
Equity Incentive Plan awards outstanding
Set out below is a summary of awards outstanding at the beginning and end of the financial year.
Options
Weighted
average
exercise
price
PSRs
RSRs
RSs
Outstanding at 1 July 2023
-
-
3,389,594
3,429,303
7,422,993
Granted
-
-
464,502
-
148,914
Exercised/released
-
-
933,721
-
6,291,979
Forfeited
-
-
-
35,622
8,604
Outstanding as at 30 June 2024
-
-
2,920,375
3,393,681
1,271,324
Exercisable as at 30 June 2024
-
-
-
-
-
Outstanding at 1 July 2022
1,222,882
$7.37
4,332,463
2,258,298
8,001,126
Granted
-
-
1,201,418
1,213,686
3,565,032
Exercised/released
-
-
516,996
-
3,890,357
Forfeited
1,222,882
-
1,627,291
42,681
252,808
Outstanding as at 30 June 2023
-
-
3,389,594
3,429,303
7,422,993
Exercisable as at 30 June 2023
-
-
-
-
-
The weighted average share price during 2024 was $8.80 (2023: $7.34).
For more information on these share plans and performance rights issued to key management personnel, refer to the Remuneration Report.
134
Annual Report 2024
G3 Share-based payments (continued)
Employee Share Plan
Under the ESP, all eligible employees have a choice of either participating in the $1,000 General Employee Share Plan (GESP) or the Matching
Share Plan (MSP). As a result of entering into the binding Scheme Implementation Deed (SID) with the Consortium, the operation of the ESP
was suspended between March 2023 and February 2024, and the GESP award was delayed from its normal allocation in August 2023 to
February 2024, due to constraints during the operation of the SID.
Under the GESP, all employees of the Company who are based in Australia and have been continuously employed as at 1 March of the
performance year, are granted up to $1,000 of fully paid Origin shares conditional on Board approval. The shares are granted for no
consideration. Shares awarded under the GESP are purchased on market, registered in the name of the employee, and are restricted for three
years, or until cessation of employment, whichever occurs first.
Under the MSP, shares purchased under the sacrifice scheme are restricted for two years or until cessation of employment, whichever occurs
first. For every two shares (one share after March 2024) purchased under the salary sacrifice scheme within a 12-month cycle, participants are
granted one Matching Right (MR) at no cost. The MRs vest two years after the cycle began, provided that the participant remains employed by
the Company at that time. Each MR entitles the participant to one fully paid ordinary share in the Company. MRs do not have any performance
hurdles as they have been granted to encourage broad participation in the scheme across the Company, and to encourage employee share
ownership. All shares are currently purchased on market. Vesting of MRs is conditional on the employee remaining in continuous employment
at that time. MRs are forfeited if the service conditions are not met.5
Details of the shares awarded under the GESP during the year are set out below. The cost per share represents the weighted average market
price of the Company’s shares on the grant date.
Grant
date
Shares
granted
Cost per
share
Total cost
$’000
2024
05 Mar 2024
438,894
$8.97
3,937
Total
438,894
3,937
2023
29 Aug 2022
587,972
$6.18
3,634
Total
587,972
3,634
Set out below is a summary of MRs outstanding at the beginning and end of the financial year.
Outstanding as at 1 July 2023
316,198
Exercised/released
214,126
Forfeited
5,139
Outstanding as at 30 June 2024
96,933
Exercisable as at 30 June 2024
-
Outstanding as at 1 July 2022
398,900
Granted
227,610
Exercised/released
293,321
Forfeited
16,991
Outstanding as at 30 June 2023
316,198
Exercisable as at 30 June 2023
-
G4 Related party disclosures
The Group’s interests in equity accounted entities and details of transactions with these entities are set out in notes B1 and B4.
Certain Directors of Origin Energy Limited are also directors of other companies that supply Origin Energy Limited with goods and services or
acquire goods or services from Origin Energy Limited. Those transactions are approved by management within delegated limits of authority,
and the Directors do not participate in the decisions to enter into such transactions. If the decision to enter into those transactions should
require approval of the Board, the Director concerned will not vote upon that decision nor take part in the consideration of it.
5
The Employee Share Plan Rules and the offer terms of the MSP provide that MRs are forfeited on cessation of employment, except in ‘good leaver’ circumstances (such as
those ceasing employment due to death, disability, redundancy or genuine retirement) or otherwise determined by the Board.
135
Financial Statements
G5 Key management personnel
2024
2023
$
$
Short-term employee benefits
13,347,455
12,475,074
Post-employment benefits
299,282
332,703
Other long-term benefits
2,950,925
1,646,936
Share-based payments
5,811,023
5,181,356
Total
22,408,685
19,636,069
Loans and other transactions with key management personnel
There were no loans with key management personnel during the year. Transactions entered into during the year with key management
personnel are normal employee, customer or supplier relationships and have terms and conditions that are no more favourable than dealings
in the same circumstances on an arm’s length basis. These transactions include:
•
the receipt of dividends from Origin Energy Limited;
•
participation in the ESP and Equity Incentive Plan;
•
terms and conditions of employment or directorship appointment;
•
reimbursement of expenses incurred in the normal course of employment;
•
sale of energy and energy services; and
•
purchases of goods and services.
G6 Notes to the statement of cash flows
Cash includes cash on hand, at bank and in short-term deposits, net of outstanding bank overdrafts. The following table reconciles profit to
net cash provided by operating activities.
2024
2023
$m
$m
Profit for the year
1,397
1,058
Adjustments for non-cash ITDA
Depreciation and amortisation
521
527
Net financing costs
123
143
Income tax expense
606
420
Non-cash share of ITDA of equity accounted investees
1,060
1,163
Adjustments for other non-cash items
Decrease/(increase) in fair value of derivatives
258
(348)
(Increase)/decrease in fair value of financial instruments
(48)
182
Unrealised foreign exchange (gain)/loss
(1)
40
Reversal of impairment of non-current assets
(477)
-
Net (gain)/loss on sale of assets
(10)
42
Impairment of non-current assets
18
-
Write-off of PP&E
2
13
Impairment losses recognised - trade and other receivables
198
148
Non-cash share of EBITDA of equity accounted investees
(1,968)
(2,487)
Exploration expense
-
23
Share-based payment expense
22
25
Changes in assets and liabilities:
– Receivables
(665)
745
– Inventories
(40)
(11)
– Payables
942
(1,492)
– Provisions
108
(325)
– Other
(252)
(16)
– Futures collateral
(52)
(290)
Tax paid
(628)
(193)
Total adjustments
(283)
(1,691)
Net cash from/(used in) operating activities
1,114
(633)
136
Annual Report 2024
G6 Notes to the statement of cash flows (continued)
Reconciliation of movements of liabilities to cash flows arising from financing activities
Liabilities from financing activities
$m
Current
borrowings
Non-current
borrowings
Lease
liabilities
Other financial
(assets)/
liabilities
Total
Balance as at 1 July 2023
128
2,585
545
31
3,289
Proceeds from borrowings
-
710
-
-
710
Repayment of borrowings/other liabilities
(127)
(410)
-
-
(537)
Repayment of lease principal
-
-
(73)
-
(73)
Changes to leases
-
-
39
-
39
Transaction costs related to borrowings paid
-
(12)
-
-
(12)
Foreign exchange adjustments and other
non-cash movements
(1)
(6)
-
9
2
Balance as at 30 June 2024
-
2,867
511
40
3,418
Balance as at 1 July 2022
257
2,598
535
12
3,402
Proceeds from borrowings
-
1,050
-
-
1,050
Repayment of borrowings/other liabilities
(272)
(1,050)
-
57
(1,265)
Repayment of lease principal
-
-
(71)
-
(71)
Changes to leases
-
-
81
-
81
Foreign exchange adjustments and other
non-cash movements
20
110
-
(38)
92
Reclassification
123
(123)
-
-
-
Balance as at 30 June 2023
128
2,585
545
31
3,289
137
Financial Statements
G7 Auditors’ remuneration
During the year, the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and
non-related audit firms.
2024
2023
$’000
$’000
Amounts received or due and receivable by the auditor of the Parent Company and any other entity in the
Group for:
Audit and assurance services
Auditing the statutory financial report of the Parent Company covering the Group
2,566
2,042
Auditing the statutory financial reports of any controlled entities
213
215
Auditing financial statements as required under the Scheme Implementation Deed
281
1,191
Fees for other assurance and agreed-upon-procedures services under other legislation or
contractual arrangements
7
15
Sustainability assurance
130
241
3,197
3,704
Other services
Tax compliance1
836
840
Scheme Implementation Deed related services2
210
-
1,046
840
Total
4,243
4,544
Amounts received or due and receivable by affiliates of the auditor of the Parent Company for:
Auditing the statutory financial reports of any controlled entities
69
-
Total fees to overseas member firms of the Parent Company auditor
69
-
Total remuneration to Parent Company auditor
4,312
4,544
Auditing of statutory financial reports of any controlled entities by other auditors
67
264
Total auditors’ remuneration
4,379
4,808
1
This amount relates to the Group’s share of tax compliance work billed. An amount of $856,000 (2023: $865,000) was recharged to APLNG in respect of its share and is
excluded from this amount.
2 The fees for non-audit services paid to the auditor of the Parent Company (EY) in the current year related to agreed-upon-procedures services and limited financial due
diligence services related to activities for the Scheme with the Consortium.
138
Annual Report 2024
G8 Master netting or similar agreements
The Group enters into derivative transactions under ISDA master netting agreements. In general, under such agreements the amounts owed
by each counterparty on a single day in respect of all transactions outstanding in the same currency are aggregated into a net amount payable
by one party to the other.
Financial assets and liabilities are offset, and the net amount reported in the statement of financial position, where the Group has a legally
enforceable right to offset recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously. The Group has also entered into arrangements that do not meet the criteria for offsetting, but still allow for the related amounts
to be offset in certain circumstances, such as a loan default or the termination of a contract.
The following table presents the recognised financial instruments that are offset, or subject to master netting arrangements but not offset, as at
the reporting date. The net amount column shows the impact on the Group’s statement of financial position if all set-off rights were exercised.
$m
Gross amount
Amount offset in
the statement of
financial
position
Amount
in the statement
of financial
position
Related amount
not offset
Net
amount
2024
Derivative assets
2,942
(930)
2,012
(663)
1,349
Derivative liabilities
(2,506)
930
(1,576)
663
(913)
2023
Derivative assets
4,109
(1,433)
2,676
(1,041)
1,635
Derivative liabilities
(3,508)
1,433
(2,075)
1,041
(1,034)
G9 Deed of Cross Guarantee
The parent entity has entered into a Deed of Cross Guarantee through which the Group guarantees the debts of certain controlled entities in
the event that one of those entities is wound up. The controlled entities that are party to the Deed are shown in note F1.
During the year WINconnect Pty Ltd, Origin Energy People Services Pty Ltd and Origin Energy Upstream People Services Pty Ltd entered into
ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 and related Deed of Cross Guarantee with Origin Energy Limited.
The following consolidated statement of comprehensive income and retained earnings, and statement of financial position, cover the
Company and its controlled entities that are party to the Deed of Cross Guarantee after eliminating all transactions between parties to
the Deed.
2024
2023
for the year ended 30 June
$m
$m
Consolidated statement of comprehensive income and retained earnings
Revenue
16,055
16,230
Other income
110
27
Expenses
(15,060)
(16,155)
Share of results of equity accounted investees
960
1,185
Reversal of impairment/(impairment)
458
(67)
Interest income
45
51
Interest expense
(169)
(197)
Profit before income tax
2,399
1,074
Income tax expense
(687)
(434)
Profit for the year
1,712
640
Other comprehensive income
-
-
Total comprehensive income for the year
1,712
640
Retained earnings at the beginning of the year
508
436
Adjustments for entities entering the Deed of Cross Guarantee
23
-
531
436
Dividends paid
(345)
(568)
Transfers to accumulated profits reserve
(3,380)
-
Retained earnings at the end of the year
(1,482)
508
139
Financial Statements
G9 Deed of Cross Guarantee (continued)
2024
2023
as at 30 June
$m
$m
Statement of financial position
Current assets
Cash and cash equivalents
496
322
Trade and other receivables
3,990
3,549
Inventories
221
178
Derivatives
1,301
1,038
Other financial assets
630
346
Assets classified as held for sale
-
4
Other assets
125
117
Total current assets
6,763
5,554
Non-current assets
Trade and other receivables
2,923
2,078
Derivatives
703
1,557
Other financial assets1
282
108
Investments accounted for using the equity method
5,563
5,479
PP&E
3,408
3,036
Intangible assets
2,303
2,385
Other assets
48
75
Total non-current assets
15,230
14,718
Total assets
21,993
20,272
Current liabilities
Trade and other payables
3,044
2,024
Payables to joint ventures
136
139
Interest-bearing liabilities
66
64
Derivatives
668
886
Other financial liabilities
342
385
Provision for income tax
479
454
Employee benefits
361
276
Provisions
115
215
Liabilities classified as held for sale
-
2
Total current liabilities
5,211
4,445
Non-current liabilities
Trade and other payables
3,634
3,771
Interest-bearing liabilities
1,250
996
Derivatives
697
1,143
Deferred tax liabilities
413
390
Employee benefits
39
50
Provisions
875
565
Total non-current liabilities
6,908
6,915
Total liabilities
12,119
11,360
Net assets
9,874
8,912
Equity
Contributed equity
6,861
6,901
Reserves
4,495
1,503
Retained earnings
(1,482)
508
Total equity
9,874
8,912
1
Includes investment in subsidiaries relating to entities outside the Deed of Cross Guarantee.
140
Annual Report 2024
G10 Parent entity disclosures
The following table sets out the results and financial position of the parent entity, Origin Energy Limited.
2024
2023
Origin Energy Limited
$m
$m
Profit for the year
893
717
Other comprehensive income, net of income tax
28
211
Total comprehensive income for the year
921
928
Financial position of the parent entity as at 30 June
Current assets
386
576
Non-current assets
18,909
19,494
Total assets
19,295
20,070
Current liabilities
4,778
6,022
Non-current liabilities
3,584
3,191
Total liabilities
8,362
9,213
Contributed equity
6,861
6,901
Share-based payments reserve
257
243
Foreign currency translation reserve
932
910
Hedge reserve
(27)
(32)
Fair value reserve
4
4
Accumulated profits reserve1
2,906
-
Retained earnings2
-
2,831
Total equity
10,933
10,857
1
Refer to note D4 for details of the establishment of and movements in the reserve.
2 Refer to note A7 for details of dividends provided for or paid of $345 million.
The parent entity has entered into a deed of indemnity for the cross-guarantee of liabilities of a number of controlled entities. Refer to note F1.
G11 Government grants and assistance
Government grants and assistance are recognised when there is reasonable assurance that the associated conditions will be complied with,
and the grants or assistance will be received. Government grants relating to expenses are recognised in profit or loss over the same period as
the relevant expense. Government grants relating to the purchase and construction of PP&E are allocated to the carrying amount of the asset
and recognised in profit or loss on a straight-line basis over the expected useful life of the related asset as a reduced depreciation expense.
Coal price cap
In December 2022, the NSW Government introduced a legislated domestic coal price cap. During the year, the Group recognised
compensation relating to supply coal contracts that exceeded the price cap of $371 million (2023: $223 million) in cost of sales in the income
statement and $49 million (2023: $55 million) was recognised in inventory in the statement of financial position. Cash of $370 million (2023:
$184 million) has been received and a receivable of $34 million (2023: $39 million) has been accrued for compensation recognised but not
yet paid at the end of the financial year.
Regional Hydrogen Hubs Program
In June 2023 the Group and the Australian Government signed an agreement for $70 million in funding to develop the proposed Hunter Valley
Hydrogen Hub (HVHH). During the year the Group received cash of $6 million (2023: nil) as funding in advance for future expenditure. Of the
amount received, $3 million (2023: nil) has been allocated to the carrying amounts of related assets in PP&E and $3 million (2023: nil) was
recognised as deferred income within current liabilities at the end of the year. The grant funding is conditional and contingent upon the Group
making a project FID for the HVHH and complying with the reporting requirements and conditions of the grant agreement.
141
Financial Statements
G12 Subsequent events
Other than the matters described below, no item, transaction or event of a material nature has arisen since 30 June 2024 that would
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial periods.
Eraring battery investment
On 24 July 2024 the Group entered into an agreement for the supply and construction of the second stage development of a large-scale
battery at the Eraring Power Station, committing to an investment of approximately $406 million.
Dividends
On 15 August 2024, the Directors determined a fully franked final dividend of 27.5 cents per share, on ordinary shares. The dividend will be paid
on 27 September 2024. The financial effect of this dividend has not been brought to account in the financial statements for the year ended
30 June 2024 and will be recognised in subsequent financial statements.
APLNG dividends
On 29 July 2024, the Group received fully franked dividends from APLNG of US$72 million (A$110 million).
On 13 August 2024, the directors of APLNG determined to pay further fully franked dividends to shareholders. The Group expects to receive
US$99 million on 28 August 2024.
Octopus Energy
On 31 July 2024, Octopus Energy repaid £889 million (~A$1,779 million) of the funding agreement entered into as part of the acquisition of
Bulb Energy. This has the effect of decreasing both current assets and current liabilities disclosed in note B3.2.
142
Annual Report 2024
Consolidated entity disclosure statement
Set out below is relevant information relating to entities that are consolidated in the consolidated financial statements at the end of the financial
year as required by the Corporations Act 2001 (Cth).
Entity name
Place of
incorporation
or formation
Percentage
of
issued
share
capital1
Entity type
Australian
or
foreign
tax
resident2
Jurisdiction
for foreign
tax resident
Origin Energy Limited
Australia
N/A
Body Corporate
Australian
N/A
Origin Energy Power Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy SWC Limited
Australia
100
Body Corporate
Australian
N/A
Sun Spot 5 Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Sun Spot 6 Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Yarrabee Project Co Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Yarrabee Project Trust
N/A
N/A
Trust
N/A
N/A
Yarrabee One Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Yarrabee One Trust
N/A
N/A
Trust
N/A
N/A
Origin Energy Wind North Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Navigator North Holding Pty Ltd
Australia
80
Body Corporate - Trustee
Australian
N/A
Navigator North Project Pty Ltd
Australia
80
Body Corporate - Trustee
Australian
N/A
Origin Energy Wind North Trust
N/A
N/A
Trust
N/A
N/A
Navigator North Holding Trust
N/A
N/A
Trust
N/A
N/A
Navigator North Project Trust
N/A
N/A
Trust
N/A
N/A
Origin Energy Wind South Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Navigator South Holding Pty Ltd
Australia
80
Body Corporate - Trustee
Australian
N/A
Navigator South Project Pty Ltd
Australia
80
Body Corporate - Trustee
Australian
N/A
Origin Energy Wind South Trust
N/A
N/A
Trust
N/A
N/A
Navigator South Holding Trust
N/A
N/A
Trust
N/A
N/A
Navigator South Project Trust
N/A
N/A
Trust
N/A
N/A
Origin Energy Wind East Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Origin Energy Wind East Trust
N/A
N/A
Trust
N/A
N/A
Usses Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Templers Energy Trust
N/A
N/A
Trust
N/A
N/A
Templers Energy Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Northern Tablelands WF Holding Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Northern Tablelands WF Project Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Northern Tablelands WF Holding Trust
N/A
N/A
Trust
N/A
N/A
Northern Tablelands WF Project Trust
N/A
N/A
Trust
N/A
N/A
Dapper SF Holding Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Dapper SF Project Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Dapper SF Holding Trust
N/A
N/A
Trust
N/A
N/A
Dapper SF Project Trust
N/A
N/A
Trust
N/A
N/A
WalchaEnergy Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
WalchaEnergy Unit Trust
N/A
N/A
Trust
N/A
N/A
Salisbury Solar Pty Ltd
Australia
100
Body Corporate
Australian
N/A
RubyHillsWind Pty Ltd
Australia
100
Body Corporate
Australian
N/A
WalchaLink Pty Ltd
Australia
100
Body Corporate
Australian
N/A
UrallaHub Pty Ltd
Australia
100
Body Corporate
Australian
N/A
BrackendaleWind Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Eraring Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Eraring Services Pty Limited
Australia
100
Body Corporate
Australian
N/A
1
Relates to percentage of issued share capital held directly or indirectly by Origin Energy Limited and only applies to Body Corporate entities.
2 The Australian income tax laws do not provide a test for determining the tax residency of a trust entity or a general partnership.
143
Financial Statements
Consolidated entity disclosure statement (continued)
Entity name
Place of
incorporation
or formation
Percentage
of
issued
share
capital1
Entity type
Australian
or
foreign
tax
resident2
Jurisdiction
for foreign
tax resident
Origin Energy Battery Head Fund Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Origin Energy Battery Fund Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Origin Energy Eraring Battery 2 Holding Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Origin Energy Eraring Battery 2 Project Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Origin Energy Mortlake Battery Holding Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Origin Energy Mortlake Battery Project Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Origin Energy Battery Head Fund Trust
N/A
N/A
Trust
N/A
N/A
Origin Energy Battery Fund Trust
N/A
N/A
Trust
N/A
N/A
Origin Energy Eraring Battery 2 Holding Trust
N/A
N/A
Trust
N/A
N/A
Origin Energy Eraring Battery 2 Project Trust
N/A
N/A
Trust
N/A
N/A
Origin Energy Mortlake Battery Holding Trust
N/A
N/A
Trust
N/A
N/A
Origin Energy Mortlake Battery Project Trust
N/A
N/A
Trust
N/A
N/A
Origin Energy Renewable Head Fund Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Origin Energy Renewable Fund Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Yanco Delta WF Holding Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Yanco Delta WF Project Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Origin Energy Renewable Head Fund Trust
N/A
N/A
Trust
N/A
N/A
Origin Energy Renewable Fund Trust
N/A
N/A
Trust
N/A
N/A
Yanco Delta WF Holding Trust
N/A
N/A
Trust
N/A
N/A
Yanco Delta Wind Farm Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Yanco Delta WF Project Trust
N/A
N/A
Trust
N/A
N/A
Origin Energy Finance Limited
Australia
100
Body Corporate
Australian
N/A
Huddart Parker Pty Limited
Australia
100
Body Corporate
Australian
N/A
FRL Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Upstream Holdings Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Browse Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy West Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy C6 Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy C5 Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Future Fuels Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Future Fuels (Gladstone) Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Future Fuels (Avondale) Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Upstream Operator Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Holdings Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Retail Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy (Vic) Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Zero Investments Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy (TM) Pty Limited
Australia
100
Body Corporate
Australian
N/A
Cogent Energy Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Retail No. 1 Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Retail No. 2 Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Electricity Limited
Australia
100
Body Corporate
Australian
N/A
Eraring Gentrader Depositor Pty Limited
Australia
100
Body Corporate
Australian
N/A
Sun Retail Pty Ltd
Australia
100
Body Corporate
Australian
N/A
OE Power Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Uranquinty Power Pty Ltd
Australia
100
Body Corporate
Australian
N/A
OC Energy Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Eraring Battery Pty Ltd
Australia
100
Body Corporate
Australian
N/A
1
Relates to percentage of issued share capital held directly or indirectly by Origin Energy Limited and only applies to Body Corporate entities.
2 The Australian income tax laws do not provide a test for determining the tax residency of a trust entity or a general partnership.
144
Annual Report 2024
Consolidated entity disclosure statement (continued)
Entity name
Place of
incorporation
or formation
Percentage
of
issued
share
capital1
Entity type
Australian
or
foreign
tax
resident2
Jurisdiction
for foreign
tax resident
Ten Ants Connect Pty Ltd
Australia
100
Body Corporate
Australian
N/A
WINconnect Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Nextgen Utilities Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Carbon Energy Management Technologies Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
LM Unit Trust (No 1)
N/A
N/A
Trust
N/A
N/A
Carbon R&D Pty Ltd
Australia
100
Body Corporate
Australian
N/A
MyConnect Holdings Pty Ltd
Australia
100
Body Corporate
Australian
N/A
MyConnect Trading Pty Ltd
Australia
100
Body Corporate
Australian
N/A
1Bill Holdings Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Thought World Pty Ltd
Australia
100
Body Corporate
Australian
N/A
1Bill Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Thought World Investments Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Compare & Connect NZ Limited
New Zealand
100
Body Corporate
Australian
N/A
Fast Connect Limited
New Zealand
100
Body Corporate
Australian
N/A
Residential Connections Pty Ltd
Australia
100
Body Corporate
Australian
N/A
YP Connect Pty Ltd
Australia
100
Body Corporate
Australian
N/A
YourPorter Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
YourPorter Unit Trust
N/A
N/A
Trust
N/A
N/A
Origin Energy International Holdings Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy PNG Holdings Limited
PNG
100
Body Corporate
Australian
N/A
Origin Energy Tasmania Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Contracting Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy LPG Limited
Australia
100
Body Corporate
Australian
N/A
Origin (LGC) (Aust) Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy SA Pty Limited
Australia
100
Body Corporate
Australian
N/A
Hylemit Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy LPG Retail (NSW) Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy WA Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Services Limited
Australia
100
Body Corporate
Australian
N/A
OEL US Inc.
USA
100
Body Corporate
Australian
N/A
Origin Energy Asset Management Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Pipelines Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Insurance Singapore Pte Ltd
Singapore
100
Body Corporate
Foreign
Singapore
Angari Pty Limited
Australia
100
Body Corporate
Australian
N/A
Oil Investments Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Southern Africa Holdings Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Vietnam Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Singapore Holdings Pte Limited
Singapore
100
Body Corporate
Foreign
Singapore
Origin Energy (Song Hong) Pte Limited
Singapore
100
Body Corporate
Foreign
Singapore
Origin Future Energy Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Metering Coordinator Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Resources NZ (Rimu) Limited
New Zealand
100
Body Corporate
Foreign
New Zealand
1
Relates to percentage of issued share capital held directly or indirectly by Origin Energy Limited and only applies to Body Corporate entities.
2 The Australian income tax laws do not provide a test for determining the tax residency of a trust entity or a general partnership.
145
Financial Statements
Consolidated entity disclosure statement (continued)
Entity name
Place of
incorporation
or formation
Percentage
of
issued
share
capital1
Entity type
Australian
or
foreign
tax
resident2
Jurisdiction
for foreign
tax resident
Origin Energy VIC Holdings Pty Limited
Australia
100
Body Corporate
Australian
N/A
OE JV Co Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy LNG Holdings Pte Limited
Singapore
100
Body Corporate
Foreign
Singapore
Origin Energy LNG Portfolio Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Australia Holding BV
Netherlands
100
Body Corporate
Australian
N/A
Origin Energy Mt Stuart BV
Netherlands
100
Body Corporate
Australian
N/A
OE Mt Stuart General Partnership
N/A
N/A
Partnership
N/A
N/A
Parbond Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Foundation Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Renewable Energy Investments No 1 Pty Ltd
Australia
100
Body Corporate - Trustee
Australian
N/A
Origin Renewable Energy Investment Trust
N/A
N/A
Trust
N/A
N/A
Origin Renewable Energy Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Geothermal Holdings Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Geothermal Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Chile Holdings Pty Limited
Australia
100
Body Corporate
Australian
N/A
Origin Energy Wind Holdings Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Wind Power Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy People Services Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Upstream People Services Pty Ltd
Australia
100
Body Corporate
Australian
N/A
Origin Energy Executive Share Plan Trust3
N/A
N/A
Trust
N/A
N/A
Origin Energy Limited Employee Share Trust3
N/A
N/A
Trust
N/A
N/A
1
Relates to percentage of issued share capital held directly or indirectly by Origin Energy Limited and only applies to Body Corporate entities.
2 The Australian income tax laws do not provide a test for determining the tax residency of a trust entity or a general partnership.
3 Holds assets on behalf of employees.
146
Annual Report 2024
Directors’ Declaration
1.
In the opinion of the Directors of Origin Energy Limited (the Company):
a. the consolidated financial statements and notes are in accordance with the Corporations Act 2001 (Cth), including:
i.
giving a true and fair view of the financial position of the Group as at 30 June 2024 and of its performance, for the year ended on
that date; and
ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001 (Cth).
b. the financial statements also comply with International Financial Reporting Standards as disclosed in the Overview of the
financial statements.
c. the consolidated entity disclosure statement required by subsection 295(3A) of the Corporations Act 2001 (Cth) is true and correct as
at 30 June 2024; and
d. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
2. There are reasonable grounds to believe that the Company and the controlled entities identified in note F1 will be able to meet any
obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and
those controlled entities pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.
3. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 (Cth) from the Chief Executive
Officer and the Chief Financial Officer for the financial year ended 30 June 2024.
Signed in accordance with a resolution of the Directors:
Scott Perkins
Chairman
Frank Calabria
Managing Director and Chief Executive Officer
Sydney, 15 August 2024
Sydney, 15 August 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent Auditor’s Report to the Members of Origin Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Origin Energy Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2024, the consolidated income statement, consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to
the financial statements, including material accounting policy information, the consolidated entity
disclosure statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a.
Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2024 and
of its consolidated financial performance for the year ended on that date; and
b.
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is
provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
report section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement of
the financial report. The results of our audit procedures, including the procedures performed to address
the matters below, provide the basis for our audit opinion on the accompanying financial report.
147
Financial Statements
Independent Auditor’s Report
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 2
Carrying Value of APLNG Equity Accounted Investment
Why significant
How our audit addressed the key audit matter
At 30 June 2024, the Group’s equity accounted
investment in Australia Pacific LNG Pty Limited
(APLNG) had a carrying value of $5,544 million.
As disclosed in Note B2.2, the carrying amount of
the Group's equity accounted investment in APLNG
is reviewed at each reporting date to determine
whether there are any indicators of impairment or
impairment reversal. Where an indicator of
impairment or impairment reversal exists, a formal
estimate of the recoverable amount is made.
At 31 December 2023 the Group identified
indicators of impairment reversal and therefore
performed an interim assessment of the
recoverable amount of the investment in APLNG.
The methodology adopted to determine the
recoverable amount is discussed in Note B2.2. This
assessment supported the reversal of historical
impairments of $477 million, being the full amount
of the investment previously impaired.
At 30 June 2024, in line with the Australian
Accounting Standards, the Group has performed an
impairment indicator assessment based on the 30
June 2024 (post impairment reversal) carrying
value. No indicators of impairment were identified.
Due to the significance of this investment relative
to total assets, the current period reversal of
historical impairment and the inherent complexity
in forecasting commodity prices and future market
outlooks, we considered the carrying value of this
investment to be a key audit matter.
In fulfilling our responsibilities as Group auditor, we considered the work
performed by the EY Component Auditor responsible for auditing APLNG,
which includes auditing the carrying value of APLNG’s assets at the Joint
Venture level. These oversight procedures included:
•
Sending instructions to the EY Component Auditor detailing the scope to
be covered for the purposes of our audit of the Group. This included the
risk associated with impairment or impairment reversal.
•
The Component Auditor confirmed compliance with the instructions
provided and reported the results of their procedures to us.
•
To ensure sufficient oversight, we, as the Group audit team:
o
Held frequent meetings with the Component Auditor to discuss
the outcome and extent of their procedures.
o
Reviewed underlying working papers and documentation of the
Component Auditor for selected areas of audit focus.
In relation to the impairment reversal, we undertook the following additional
procedures:
•
Reviewed the calculation of recoverable amount (being fair value) with
reference to all publicly available information included in the scheme
Implementation Deed and the Alternative Offer and associated pricing
information included within.
•
Considered the appropriateness of using the bid data as a measurement
of fair value.
•
Considered internal information in respect of recoverable amount being
the Group’s corporate model which uses a discounted cash flow
methodology to determine fair value. With the assistance of our
valuation’s specialists we:
o
Assessed the macroeconomic assumptions including oil price,
gas price and foreign exchange, with reference to publicly
available information on comparable companies in the industry
and markets in which the Group operates.
o
Evaluated the discount rate adopted with reference to external
market data including government bond rates and comparable
company data.
o
Agreed the production profile, operating cost and capital
expenditure forecasts applied in the Group’s corporate model
to forecasts prepared by APLNG and tested by the Component
Auditor as part of their testing of the carrying value of
APLNG’s assets at the Joint Venture level; and;
o
Considered the impact of climate risk on the asset life and key
macro-economic assumptions.
•
Considered further corroborative evidence, including the valuation
performed by the Scheme Independent Expert whose valuation
supported the reversal of the full value.
•
The Component Auditor of APLNG considered the impairment reversal
assessment prepared by APLNG at the Joint Venture level.
•
Assessed the impairment reversal related disclosures for compliance
with the requirements of the Australian Accounting Standards.
148
Annual Report 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 3
•
Assessed the climate related disclosures in respect of APLNG for
accuracy and consistency with other publicly disclosed information.
Unbilled Revenue
Why significant
How our audit addressed the key audit matter
At 30 June 2024, the Group recognised unbilled
revenue net of an allowance for impairment of
$1,711 million as disclosed in Note A2 and C1.
Unbilled revenue represents the value of energy
supplied to customers between the date of the last
meter read and the reporting date where no bill has
been issued to the customer at the end of the
reporting period.
The estimation of unbilled revenue is considered a
key audit matter due to the complex estimation
process and significant audit effort required to
address the estimation uncertainty. Key factors that
require consideration impacting the complex
estimation process include:
•
Estimation of customer demand and energy
consumption, which is impacted by weather, an
individual customer’s circumstances and
market volatility.
•
Application of different customer rates across
different regulated and unregulated markets.
The Group’s disclosures in respect of the unbilled
revenue estimation process are included in Notes A2
and C1 of the financial report.
Our audit procedures included the following:
•
Assessed whether the methodology used to recognise unbilled
revenue met the requirements of Australian Accounting
Standards.
•
Assessed the effectiveness of the Group’s controls governing
energy purchased, energy sold and the customer pricing process.
•
Evaluated the unbilled revenue calculation as follows:
o
With the assistance of our data analytics specialists,
assessed the calculation methodology of the unbilled
revenue model.
o
Compared inputs used in the calculation to supporting
data such as historical temperature data and volume
data provided by the Australian Energy Market Operator
(AEMO).
o
Tested the reasonableness of the Group’s allocation of
energy consumed to residential and small and medium
enterprises (“SME”) with reference to historical billing
data.
o
Compared the prices applied to unbilled customer
consumption with historical and current billing data.
o
Reviewed the Group’s reconciliation of volumes acquired
from AEMO against volumes sold and volumes purchased
as used by the Group in their analysis.
o
Compared the historical accuracy of the unbilled revenue
accrual by comparing the historical accrual to final billing
data and performing a trend analysis of the accrual year
on year; and
o
Tested the accuracy of the unbilled revenue accrual for
business customers by comparing the unbilled revenue
accrual to subsequent invoices.
•
Evaluated the adequacy of the related disclosures in the financial
report including those made with respect to judgements and
estimates
149
Financial Statements
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 4
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Company’s 2024 annual report, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related
assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a) the financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b) the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue
as a going concern, disclosing, as applicable, matters relating to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
150
Annual Report 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 5
►
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
►
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
►
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
►
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
►
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
►
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
151
Financial Statements
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 6
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 55 to 79 of the directors’ report for the year
ended 30 June 2024.
In our opinion, the Remuneration Report of Origin Energy Limited for the year ended 30 June 2024,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Ernst & Young
Andrew Price
Partner
Sydney
15 August 2024
152
Annual Report 2024
153
Share and Shareholder Information
Share and Shareholder
Information
The information set out below was applicable as at 26 July 2024.
Corporate Governance Statement
The Company’s Corporate Governance Statement can be found on its website at originenergy.com.au/governance
Substantial shareholders
As at 26 July 2024, the Company received notice of three substantial holders:
Shareholder
Date notice
received
Number of
shares in notice
Percentage of
capital in notice
AustralianSuper Pty Ltd
14 November 2023
284,284,906
16.50%
State Street Corporation
3 June 2024
87,358,223
5.07%
Vanguard Group
28 April 2022
88,061,736
5.00007%
Number of equity securities holders and voting rights
As at 26 July 2024 there were:
•
122,737 holders of 1,722,747,671 ordinary shares in the Company;
•
79 holders of 2,920,375 Performance Share Rights, 67 holders of 3,078,435 Restricted Share Rights; and
•
674 holders of 96,770 Matching Share Rights.
Only ordinary shares of the Company are quoted. Only holders of ordinary shares are entitled to attend and vote at a meeting of members.
Voting rights of members
At a meeting of members, each member who is entitled to attend and vote may attend and vote in person or by proxy, attorney or
representative. On a show of hands, every person present who is a member, proxy, attorney or representative, shall have one vote; and on a
poll, every member who is present in person or by proxy, attorney or representative shall have one vote for each fully paid ordinary share held.
No other equity securities hold voting rights.
Analysis of holdings
Fully paid ordinary shares
Holdings Ranges
Holders
Total shares
%
1-1,000
60,295
23,656,603
1.37
1,001-5,000
45,102
108,846,318
6.32
5,001-10,000
10,550
75,094,024
4.36
10,001-100,000
6,620
138,168,743
8.02
100,001-9,999,999,999
170
1,376,981,983
79.93
Totals
122,737
1,722,747,671
100.00
Performance share rights
Holdings Ranges
Holders
Total rights
%
1-1,000
0
0
0.00
1,001-5,000
14
34,642
1.19
5,001-10,000
10
82,528
2.83
10,001-100,000
46
1,144,262
39.18
100,001-999,999,999
9
1,658,943
56.81
Totals
79
2,920,375
100.00
154
Annual Report 2024
Restricted Share rights
Holdings Ranges
Holders
Total rights
%
1-1,000
0
0
0.00
1,001-5,000
0
0
0.00
5,001-10,000
9
56,102
1.82
10,001-100,000
50
1,347,710
43.78
100,001-999,999,999
8
1,674,623
54.40
Totals
67
3,078,435
100.00
Matching Share Plan matched rights
Holdings Ranges
Holders
Total rights
%
1-1,000
674
96,770
100.00
1,001-5,000
0
0
0.00
5,001-10,000
0
0
0.00
10,001-100,000
0
0
0.00
100,001-999,999,999
0
0
0.00
Totals
674
96,770
100.00
Unmarketable parcels
4,405 shareholders held less than a marketable parcel as at 26 July 2024.
Top 20 holdings
Shareholder
Number of shares
% of Issued shares
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
565,722,267
32.84
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
461,724,064
26.80
CITICORP NOMINEES PTY LIMITED
167,355,451
9.71
NATIONAL NOMINEES LIMITED
29,191,423
1.69
BNP PARIBAS NOMINEES PTY LTD
23,594,094
1.37
BNP PARIBAS NOMS PTY LTD
18,562,106
1.08
ARGO INVESTMENTS LIMITED
12,576,603
0.73
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
12,485,472
0.72
BNP PARIBAS NOMINEES PTY LTD
7,063,182
0.41
CITICORP NOMINEES PTY LIMITED
5,478,764
0.32
CERTANE CT PTY LTD
4,984,300
0.29
UBS NOMINEES PTY LTD
3,721,547
0.22
NETWEALTH INVESTMENTS LIMITED
3,685,708
0.21
MUTUAL TRUST PTY LTD
3,171,624
0.18
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
3,055,247
0.18
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3,010,576
0.17
CERTANE CT PTY LTD
2,713,735
0.16
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
2,508,269
0.15
IOOF INVESTMENT SERVICES LIMITED
1,898,492
0.11
BNP PARIBAS NOMINEES PTY LTD
1,897,576
0.11
Securities exchange listing
Origin shares are traded on the Australian Securities Exchange Limited (ASX). The symbol under which Origin shares are traded is ‘ORG’.
Escrowed securities
There are no securities subject to voluntary escrow as at the date of this Report.
On-market buy-back
There is no current on-market buy-back of Origin shares.
155
Share and Shareholder Information
On-market purchases for employee equity plans
During the reporting period, 5,280,000 Origin shares were purchased on-market for the purpose of Origin’s employee incentive plans. The
average price per share purchased was $10.41.
Shareholder enquiries
For information about your shareholding, to notify a change of address, to make changes to your dividend payment instructions or for
any other shareholder enquiries, you should contact Origin Energy’s share registry, Boardroom Pty Ltd on 1300 664 446. Please note that
broker-sponsored holders are required to contact their broker to amend their address.
When contacting the share registry, shareholders should quote their security holder reference number, which can be found on the holding
or dividend statements.
Shareholders with internet access can update and obtain information regarding their shareholding online at www.originenergy. com.au/
about/investors-media
Tax File Number
For resident shareholders who have not provided the share registry with their Tax File Number (TFN) or exemption category details, tax at the
top marginal tax rate (plus Medicare levy) will be deducted from dividends to the extent they are not fully franked. For those
shareholders who have not provided their TFN or exemption category details, forms are available from the share registry. Shareholders are not
obliged to provide this information if they do not wish to do so.
Information on Origin
The main source of information for shareholders is the Annual Report. The Annual Report will be provided to shareholders on request and
free of charge. Shareholders not wishing to receive the Annual Report should advise the share registry in writing so that their names can be
removed from the mailing list. Origin’s website (www.originenergy.com.au) is another source of information for shareholders.
156
Annual Report 2024
Exploration and Production
Permits and Data
!(
!(
!(
!(
!(
!(
!(
!(
TAS
NT
WA
SA
VIC
QLD
NSW
DARWIN
SYDNEY
BRISBANE
ADELAIDE
HOBART
MELBOURNE
Gladstone
PERTH
²
0
300
600
150
Kilometres
Origin/APLNG (Operated and Non-Operated Permits)
Origin Interest
APLNG Interest
Pipelines (APLNG Interest)
Other Pipeline (Not APLNG/Origin)
!(
!(
!(
!(
!(
!(
BUNDABERG
ROMA
TOOWOOMBA
GLADSTONE
EMERALD
DALBY
Queensland
Gold Coast
Brisbane
Sunshine
Coast
Coral
Sea
!(
!(
DERBY
BROOME
Western Australia
Indian
Ocean
Adele Island
Cape Leveque
!(
!(
BLACKALL
QUILPIE
Queensland
1
2
3
1
Surat-Bowen Basins
2
Cooper-Eromanga Basins
3
Browse Basin
Canning Basin
²
²
²
0
40
80
20
Kilometres
0
30
60
15
Kilometres
0
50
100
25
Kilometres
157
Exploration and Production Permits and Data
1 Origin's Australian interests
Origin held interests in the following permits at 30 June 2024.
Basin/Project Area
Interest
Queensland
Surat-Bowen basins
Angry Jungle
ATP 631; PLs 281 and 282
4.9765375% 1
Carinya and Ramyard
ATP 972; PL 469, 470
and 471
25.50%
* 1
ATP 973
27.5%
* 1
Combabula/Reedy Creek/Peat and
Taroom East
ATP 2047
13.75%
1
ATP 606; PLs 297, 403,
404, 405, 406, 407, 408,
412 and 413; PL(A) 444
25.50%
* 1
PL 101
27.5%
* 1
PPL 178
27.5%
* 1
Condabri
PLs 265, 266, 267, 1011
and 1018
27.50%
* 1
PPLs 177, 185, 186, 2000
and 2059
27.50%
* 1
Denison Trough
ATP 1191; PLs 1082 and
1083 (Mahalo block deeps)
13.75%
1
ATP 1191; PLs 450, 451,
457, 1012; PL(A) 1062
13.75%
1
PLs 43, 44, 45, 183 (PLA
1116) and 218 (Deeps)
13.75%
* 1
Fairview and Arcadia
ATPs 745; PLs 420, 421
and 440
6.558623%
1
PL 1059
6.55875%
1
ATPs 2012; 90, 91, 92, 99,
100, 232, 233, 234, 235,
236 and 1017
6.580664% 1
Basin/Project Area
Interest
Queensland (continued)
Pipelines and Shared Facilities
PFL 20
27.50%
1
PPLs 162 and 163
27.50%
* 1
Ironbark
ATP 788; PL(A) 1106
(Deeps)
6.88%
* 1
ATP 788; PL(A) 1106
(Shallows)
27.50%
* 1
Kenya/Kenya East/Bellevue and Anya
PL 247
8.078125%
1
PFL 19
8.59375%
1
PL 1025
8.59375%
1
PLs 257, 273, 274, 275,
278, 279, 442, 466, 474
and 503 (Shallows)
8.59375%
1
PLs 179, 180, 228, 229
and 263
11.171875%
1
PPLs 107, 176, 2014
and 2063
11.171875%
1
Membrance and Lonesome
ATP 804
8.057017%
1
PLs 219 and 220
27.50%
* 1
Spring Gully
ATP 592; PLs 195, 268, 414,
415, 416, 417, 418 and 419
25.99%
* 1
PL 200
26.32%
* 1
PL 204
26.74%
* 1
PPL 143, 180 and 2026
27.50%
* 1
Talinga/Orana/Murrungama
PLs 215, 216, 225, 226, 272
and 1084
27.50%
* 1
PFL 26
27.50%
* 1
PPLs 171, 181 and 2032
27.50%
* 1
Basin/Project Area
Interest
Queensland (continued)
Cooper-Eromanga basins
ATPs 736, 737, 738, 2025
and 2026
75.00%
*
Boree North
EPM 27973
100.00%
*
Western Australia
Browse Basin
TR/7, TR/8, WA-90-R,
WA-91-R, WA-92-R
40.00%
South Australia
Geothermal
GRL 3
30.00%
Notes:
* Operatorship
1 Interest held through 27.5 per cent
ownership of Australian Pacific LNG
Joint Venture
158
Annual Report 2024
Annual Reserves Report
For the year ended 30 June 2024
1 Reserves and resources
This Annual Reserves Report provides an update on the reserves and resources of Origin Energy Limited (Origin) and its share of Australia
Pacific LNG Pty Limited (APLNG), as at 30 June 2024.
1.1 Highlights
APLNG (Origin 27.5 per cent share)
•
Reserves base largely stable before production with an overall 12 per cent 2P (proved plus probable) reserves replacement in operated and
non-operated areas during FY24. A detailed breakdown of movements in Origin’s share of APLNG 2P reserves is as follows:
–
52 PJ upward revision of operated 2P reserves before production;
–
29 PJ decrease in non-operated 2P reserves before production; and
–
191 PJ of production.
•
Developed 2P reserves accounted for 61 per cent of total 2P reserves as at 30 June 2024.
•
Origin’s share of 1P (proved) reserves increased 1 per cent or 23 PJ before production due to strong performance in producing fields. 1P
reserves represent 56 per cent of total 3P (proved plus probable plus possible) reserves as at 30 June 2024.
1.2 2P reserves (Origin share)
2P reserves increased by 23 PJ or 1 per cent before production and decreased by 168 PJ after production to a total of 2,843 PJ, compared
to 30 June 2023.
Origin 2P reserves by area
(PJ)
2P
30 June 2023
Acquisition/
divestment
New booking/
discovery
Revisions/
extensions
Production
2P
30 June 2024
Operated Assets
2,514
-
-
52
(153)
2,414
– Asset East
1,014
-
-
28
(80)
962
– Asset West
1,500
-
-
24
(72)
1,452
Non-Operated Assets
497
-
-
(29)
(38)
429
Total 2P
3,011
-
-
23
(191)
2,843
•
Summary of 2P reserves movement - key changes include:
–
191 PJ decrease due to production;
–
52 PJ various minor adjustments leading to an overall positive revision across operated areas;
–
29 PJ decrease in non-operated areas driven by minor updates to field recovery assessments.
•
As at 30 June 2024, developed 2P reserves represented 61 per cent of total 2P reserves.
•
As at 30 June 2024, 100 per cent of Origin’s share of 2P reserves are unconventional gas located in the Surat and Bowen Basins.
Origin 2P reserves by development type
Total 2P
Total 2P
(PJ)
Developed
Undeveloped
30 June 2023
Developed
Undeveloped
30 June 2024
Operated Assets
1,537
978
2,514
1,456
958
2,414
– Asset East
750
265
1,014
687
275
962
– Asset West
787
713
1,500
769
683
1,452
Non-Operated Assets
303
194
497
288
142
429
Total 2P
1,839
1,172
3,011
1,744
1,099
2,843
159
Annual Reserves Report
1.3 1P reserves (Origin share)
1P reserves increased by 23 PJ or 1 per cent before production and decreased by 167 PJ after production to 1,747 PJ, compared to
30 June 2023.
As at 30 June 2024, developed 1P reserves represented 94 per cent of total 1P reserves. The remaining 6 per cent of 1P reserves represents
wells that have been spudded but not connected or planned wells that are immediately adjacent to drilled wells. 100 per cent of 1P reserves
are unconventional gas located in the Surat and Bowen Basins.
Origin 1P reserves by area
(PJ)
1P
30 June 2023
Acquisition/
divestment
New booking/
discovery
Revisions/
extensions
Production
1P
30 June 2024
Operated Assets
1,542
-
-
21
(153)
1,411
– Asset East
731
-
-
27
(80)
678
– Asset West
811
-
-
(6)
(72)
733
Non-Operated Assets
372
-
-
2
(38)
336
Total 1P
1,914
-
-
23
(191)
1,747
Origin 1P reserves by development type
Total 1P
Total 1P
(PJ)
Developed
Undeveloped
30 June 2023
Developed
Undeveloped
30 June 2024
Operated Assets
1,477
65
1,542
1,368
43
1,411
– Asset East
721
10
731
658
20
678
– Asset West
756
55
811
710
23
733
Non-Operated Assets
267
105
372
273
63
336
Total 1P
1,744
170
1,914
1,640
107
1,747
160
Annual Report 2024
Appendix A: APLNG reserves and resources
Origin, as APLNG upstream operator, has prepared estimates of the reserves and resources held by APLNG for operated assets detailed in
this report.
Netherland, Sewell & Associates, Inc. (NSAI) has prepared a consolidated report of the reserves and resources held by APLNG for certain
non-operated assets. The reserves and resources estimates for the non-operated properties in their report have been independently estimated
by NSAI.
The tables below provide 1P, 2P and 3P reserves and 2C resources for APLNG (100 per cent) and Origin’s 27.5 per cent interest in these APLNG
(operated and non-operated) reserves and resources.
Reserves and resources held by APLNG (100 per cent share)
Reserves/resource classification
30-6-2023
Acquisition/
divestment
New booking/
discovery
Revisions/
extensions
Production
30-6-2024
1P (proven)
6,961
-
-
85
(694)
6,353
2P (proven plus probable)
10,949
-
-
83
(694)
10,339
3P (proven plus probable plus possible)
11,991
-
-
41
(694)
11,337
2C (best estimate contingent resource)
3,729
-
-
28
-
3,757
Reserves and resources held by Origin (27.5 per cent in APLNG)
Reserves/resource classification
30-6-2023
Acquisition/
divestment
New booking/
discovery
Revisions/
extensions
Production
30-6-2024
1P (proven)
1,914
-
-
23
(191)
1,747
2P (proven plus probable)
3,011
-
-
23
(191)
2,843
3P (proven plus probable plus possible)
3,297
-
-
11
(191)
3,118
2C (best estimate contingent resource)
1,025
-
-
8
-
1,033
See details above for movements in 1P and 2P reserves.
The 41 PJ increase in APLNG (100 per cent share) 3P reserves, excluding production, is due to minor adjustments to operated and
non-operated field recovery estimates.
161
Annual Reserves Report
Appendix B: Notes
relating to this report
a. Methodology regarding reserves
and resources
The Reserves Report has been prepared
to be consistent with the Petroleum
Resources Management System (PRMS)
2018 published by the Society of
Petroleum Engineers (SPE). This document
may be downloaded from the SPE
website: https://www.spe.org/en/industry/
reserves/. Additionally, this Reserves Report
has been prepared to be consistent with
the ASX reporting guidelines. For all assets,
Origin reports reserves and resources
consistent with SPE guidelines as follows:
proved reserves (1P); proved plus probable
reserves (2P); proved plus probable plus
possible reserves (3P) and best estimate
contingent resource (2C). Reserves must
be discovered, recoverable, commercial
and remaining.
The CSG reserves and resources held
within APLNG’s properties have either
been independently prepared by NSAI
or prepared by Origin. The reserves and
resources estimates contained in this report
have been prepared in accordance with
the standards, definitions and guidelines
contained within the PRMS and generally
accepted petroleum engineering and
evaluation principles as set out in the SPE
Reserves Auditing Standards.
Origin does not intend to report prospective
or undiscovered resources as defined by
the SPE in any of its areas of interest on an
ongoing basis.
b. Economic test for reserves
The assessment of reserves requires a
commercial test to establish that reserves
can be economically recovered. Within
the commercial test, operating cost and
capital cost estimates are combined with
fiscal regimes and product pricing to
confirm the economic viability of producing
the reserves.
Gas reserves are assessed against existing
contractual arrangements and local market
conditions, as appropriate. In the case
of gas reserves where contracts are not
in place, a forward price scenario based
on monetisation of the reserves through
domestic markets has been used, including
power generation opportunities, direct
sales to LNG and other end users, and
utilisation of Origin’s wholesale and retail
channels to market.
For CSG reserves that are intended to
supply the APLNG CSG to LNG project,
the economic test is based on a weighted
average price across domestic, spot and
LNG contracts, less short run marginal costs
for downstream transport and processing.
This price is exposed to changes in the
supply/demand balance in the market
through oil price-linked LNG contracts.
c. Reversionary rights
The CSG interests that APLNG acquired
from Tri-Star in 2002 are subject to
reversionary rights. If triggered, these
rights will require APLNG to transfer
back to Tri-Star a 45 per cent interest
in those CSG interests for no additional
consideration. Origin has assessed the
potential impact of these reversionary
rights, based on economic tests consistent
with the reserves and resources referable
to the CSG interests, and based on
that assessment does not consider that
the existence of these reversionary rights
impacts the reserves and resources quoted
in this report. Tri-Star has commenced
proceedings against APLNG claiming that
reversion has occurred. APLNG denies that
reversion has occurred and is defending
the claim.1
d. Information regarding the preparation
of this Reserves Report
The CSG reserves and resources held
within APLNG’s properties have either
been independently prepared by NSAI or
by Origin. All assessments are based on
technical, commercial and operational data
provided by Origin on behalf of APLNG.
The statements in this Report relating to
reserves and resources as at 30 June
2024 for APLNG’s interests in certain non-
operated assets are based on information
in the NSAI report dated 31 July 2024.
The data has been compiled by Mr
John Hattner, a full-time employee of
NSAI. Mr Hattner has consented to the
statements based on this information, and
to the form and context in which these
statements appear.
The statements in this Report relating to
reserves and resources for other assets are
based on, and fairly represent, information
and supporting documentation prepared
by, or under the supervision of qualified
petroleum reserves and resource evaluators
who are employees of Origin.
This Reserves Statement as a whole has
been approved by Mr Alistair Jones CPEng
NER MIEAust who is a full-time employee of
Origin. Mr Alistair Jones is Chief Reservoir
Engineer, a qualified petroleum reserves
and resources evaluator and a member of
the Society of Petroleum Engineers, has
consented to the form and context in which
these statements appear.
e. Rounding
Information on reserves is quoted in this
report rounded to the nearest whole
number. Some totals in tables in this report
may not add due to rounding. Items that
round to zero are represented by the
number 0, while items that are actually zero
are represented with a dash "-".
f.
Abbreviations
bbl
barrel
Tscf
trillion standard cubic feet
CSG
coal seam gas
kbbls
kilo barrels = 1,000 barrels
ktonnes
kilo tonnes = 1,000 tonnes
mmboe
million barrels of oil equivalent
PJ
petajoule = 1 x 1015 joules
PJe
petajoule equivalent
g. Conversion factors for PJe
CSG
1.038 PJ/Bscf
h. Reference point
Reference points for Origin’s petroleum
reserves and contingent resources are
defined points within Origin’s operations
where normal exploration and production
business ceases, and quantities of the
produced product are measured under
defined conditions prior to custody transfer.
Fuel, flare and vent consumed to the
reference points are excluded.
i.
Preparing and aggregating
petroleum resources
Petroleum reserves and contingent
resources are typically prepared by
deterministic methods with support from
probabilistic methods. Petroleum reserves
and contingent resources are aggregated
by arithmetic summation by category and
as a result, proved reserves may be a
conservative estimate due to the portfolio
effects of the arithmetic summation. Proved
plus probable plus possible may be an
optimistic estimate due to the same
aforementioned reasons.
j.
Methodology and internal controls
The reserves estimates undergo an
assurance process to ensure that they
are technically reasonable given the
available data and have been prepared
according to our reserves and resources
process, which includes adherence to
the PRMS Guidelines. The assurance
process includes peer reviews of the
technical and commercial assumptions.
The annual reserves report is reviewed
by management with the appropriate
technical expertise, including Integrated
Gas General Managers.
1
Refer to Section 7 of the Operating and Financial Review released to the ASX on 15 August 2024 for further information.
162
Annual Report 2024
Five-year
Financial History
A reconciliation between statutory and underlying profit measures can be found in note A1 of the Origin Consolidated Financial Statements.
20241
20231
20221
20211
20201
Income statement ($m)
Total external revenue
16,138
16,481
14,461
12,097
13,157
Underlying:
EBITDA
3,528
3,107
2,114
2,036
3,122
Depreciation and amortisation expense
(521)
(527)
(449)
(541)
(501)
Share of interest, tax, depreciation and amortisation
of equity accounted investees2
(1,066)
(1,163)
(1,138)
(956)
(1,303)
EBIT
1,941
1,417
527
539
1,318
Net financing costs
(123)
(134)
(126)
(133)
(126)
Income tax benefit/(expense)
(635)
(533)
10
(90)
(174)
Non-controlling interests
-
(3)
(4)
(2)
(3)
Segment result and underlying consolidated profit
1,183
747
407
314
1,015
Impact of items excluded from segment result and
underlying consolidated profit net of tax
214
308
(1,836)
(2,595)
(894)
Statutory:
Profit/(loss) attributable to members of the
parent entity
1,397
1,055
(1,429)
(2,281)
121
Statement of financial position ($m)
Total assets
20,454
18,948
24,020
21,308
25,340
Net debt/(cash)
2,829
2,888
2,818
4,786
5,688
Shareholders' equity - members/parent
entity interest
9,489
8,891
9,997
9,455
12,333
Adjusted net debt/(cash)3
2,833
2,877
2,838
4,639
5,158
Shareholders' equity - total
9,489
8,911
10,022
9,475
12,354
Cash flow
Net cash from operating and investing activities -
total operations ($m)
1,098
585
3,363
1,183
1,813
Key ratios
Statutory basic earnings per share (cents)
81.1
61.3
(81.5)
(129.6)
6.9
Underlying basic earnings per share (cents)
68.7
43.4
23.2
17.8
57.6
Total dividend per share (cents)4
55.0
36.5
29.0
20.0
25.0
Net debt to net debt plus equity (adjusted) (%)3
23
24
22
33
29
Underlying EBITDA by segment ($m)
Energy Markets
1,655
1,038
401
982
1,454
Share of Octopus Energy
55
240
(36)
(3)
(4)
Integrated Gas
1,951
1,919
1,837
1,135
1,741
Corporate
(133)
(90)
(88)
(78)
(69)
163
Five-year Financial History
20241
20231
20221
20211
20201
General Information
Number of employees
5,616
5,630
5174
4,979
5,232
Weighted average number of shares
1,722,199,759
1,720,567,672
1,753,612,216
1,759,555,663
1,759,801,186
Integrated Gas
2P reserves (PJe)
2,843
3,011
3,148
4,252
4,268
Product sales volumes (PJe)
183
177
211
246
251
Liquified Natural Gas (PJ)
139
136
159
187
180
Natural gas and ethane (PJ)
45
41
52
59
70
Production volumes (PJe)
191
185
220
263
265
Energy Markets
Generation (MW) - owned
6,079
6,080
6,052
6,047
6,029
Generation dispatched (TWh)
17
15
15
16
18
Number of customers ('000)
4,657
4,525
4,458
4,266
4,236
Electricity
2,763
2,742
2,733
2,625
2,631
Natural gas
1,323
1,282
1,277
1,249
1,220
LPG
359
368
368
359
365
Broadband
152
96
61
33
20
Other5
60
37
20
Electricity (TWh)
36
36
35
34
34
Natural gas (PJ)
161
187
188
193
204
LPG (Kt)
331
374
357
389
417
1
Includes discontinued operations and assets held for sale unless stated otherwise.
2 Origin discloses its equity accounted results in two lines: 'share of EBITDA of equity accounted investees,' included in EBITDA; and 'share of interest, tax, depreciation and
amortisation of equity accounted investees,' included between EBITDA and EBIT.
3 Total current and non-current interest-bearing liabilities only, less cash and cash equivalents excluding APLNG related cash, less fair value adjustments on hedged borrowings.
4 Dividends represent the interim and final dividends determined for each FY. This includes the final dividend for FY24 determined on 15 August 2024 to be paid on
27 September 2024. The amounts paid within each FY are 47.5c, 33c, 20c, 22.5c and 30c respectively.
5 Largely relates to Origin Home Assist customers.
164
Annual Report 2024
Glossary
and Interpretation
Glossary
Statutory financial measures
Statutory financial measures are measures included in the Financial
Statements for the Origin Consolidated Group, which are measured
and disclosed in accordance with applicable Australian Accounting
Standards. Statutory financial measures also include measures that
have been directly calculated from, or disaggregated directly from
financial information included in the Financial Statements for the
Origin Consolidated Group.
Term
Meaning
Cash flows from
investing activities
Statutory cash flows from investing activities as
disclosed in the Statement of Cash Flows in the
Origin Consolidated Financial Statements.
Cash flows from
operating activities
Statutory cash flows from operating activities as
disclosed in the Statement of Cash Flows in the
Origin Consolidated Financial Statements.
Cash flows used in
financing activities
Statutory cash flows used in financing activities as
disclosed in the Statement of Cash Flows in the
Origin Consolidated Financial Statements.
Net Debt
Total current and non-current interest-bearing
liabilities only, less cash and cash equivalents
excluding cash to fund APLNG day-to-
day operations.
Non-
controlling interest
Economic interest in a controlled entity of
the consolidated entity that is not held by
the Parent entity or a controlled entity of the
consolidated entity.
Statutory
Profit/Loss
Net profit/loss after tax and non-controlling
interests as disclosed in the Income Statement
in the Origin Consolidated Financial Statements.
Statutory earnings
per share
Statutory Profit/Loss divided by weighted
average number of shares as disclosed in the
Income Statement in the Origin Consolidated
Financial Statements.
Non-IFRS financial measures
Non-IFRS financial measures are defined as financial measures that
are presented other than in accordance with all relevant Accounting
Standards. Non-IFRS financial measures are used internally by
management to assess the performance of Origin’s business, and to
make decisions on allocation of resources. The Non-IFRS financial
measures have been derived from Statutory financial measures
included in the Origin Consolidated Financial Statements, and are
provided in this report, along with the Statutory financial measures
to enable further insight and a different perspective into the financial
performance, including profit and loss and cash flow outcomes, of
the Origin business.
The principal Non-IFRS profit and loss measure of Underlying Profit
has been reconciled to Statutory Profit in Section 4.1. The key Non-
IFRS financial measures included in this report are defined below.
Term
Meaning
AASB
Australian Accounting Standards Board
Adjusted
Net Debt
Net Debt adjusted to remove fair value adjustments
on hedged borrowings
Adjusted
Underlying
EBITDA
Origin Underlying EBITDA – Share of APLNG
Underlying EBITDA and Octopus Energy EBITDA
+ net cash from APLNG over the relevant 12
month period.
Average
interest rate
Interest expense divided by Origin’s average drawn
debt during the period.
cps
Cents per share.
EBITDA
Earnings before interest, tax, depreciation
and amortisation
Free Cash Flow
Net cash from operating and investing activities
(excluding major growth projects), less interest paid.
FY24
(Current period)
Twelve months ended 30 June 2024.
FY23
(Prior period)
Twelve months ended 30 June 2023.
Gearing
Adjusted Net Debt / (Adjusted Net Debt +
Total equity)
Gross Profit
Revenue less cost of goods sold.
ITDA
Interest, tax, depreciation and amortisation
Items excluded
from Underlying
Profit (IEUP)
Items that do not align with the manner in which
the Chief Executive Officer reviews the financial and
operating performance of the business which are
excluded from Underlying Profit. See Section 4.1
for details.
MRCPS
Mandatorily Redeemable Cumulative
Preference Shares.
Non-cash fair
value uplift
Reflects the impact of the accounting uplift in
the asset base of APLNG which was recorded on
creation of APLNG and subsequent share issues
to Sinopec. This balance will be depreciated in
APLNG’s Income Statement on an ongoing basis
and, therefore, a dilution adjustment is made to
remove this depreciation.
Share of ITDA
Origin’s share of equity accounted interest, tax,
depreciation and amortisation.
Total Segment
Revenue
Total revenue for the Energy Markets, Integrated Gas
and Corporate segments, as disclosed in note A1 of
the Origin Consolidated Financial Statements.
Underlying EPS
Underlying Profit/Loss divided by weighted average
number of shares.
165
Glossary and Interpretation
Term
Meaning
Underlying
EBITDA
Underlying earnings before underlying interest,
underlying tax, underlying depreciation and
amortisation (EBITDA) as disclosed in note A1 of the
Origin Consolidated Financial Statements.
Underlying
share of ITDA
Share of interest, tax, depreciation and amortisation
of equity accounted investees adjusted for items
excluded from Underlying Profit.
Underlying
Profit/Loss
Underlying net profit/loss after tax and non-
controlling interests as disclosed in note A1 of the
Origin Consolidated Financial Statements.
Underlying
ROCE (Return
on Capital
Employed)
Calculated as Adjusted EBIT / Average
Capital Employed.
Average Capital Employed = Shareholders Equity
+ Origin Debt + Origin’s Share of APLNG project
finance - Non-cash fair value uplift + net derivative
liabilities. The average is a simple average of opening
and closing in the given period.
Adjusted EBIT = Origin Underlying EBIT and
Origin’s share of APLNG Underlying EBIT + Dilution
Adjustment = Statutory Origin EBIT adjusted to
remove the following items: a) Items excluded from
underlying earnings; b) Origin’s share of APLNG
underlying interest and tax; and c) the depreciation of
the Non-cash fair value uplift adjustment. In contrast,
for remuneration purposes Origin’s statutory EBIT
is adjusted to remove Origin’s share of APLNG
statutory interest and tax (which is included in
Origin’s reported EBIT) and certain items excluded
from underlying earnings. Gains and losses on
disposals and impairments will only be excluded
subject to Board discretion.
Non-financial terms
Term
Meaning
Boe
Barrel of oil equivalent
Cleaner Energy
Includes solar, wind, hydro, hydrogen, batter storage,
bioenergy, and energy efficiency
CES
Community Energy Services
C&I
Commercial and Industrial
Consortium
Comprising affiliates of Brookfield Renewable
Partners L.P. (Brookfield Renewable), together with
its institutional partners and certain other global
institutional investors, and MidOcean Energy, an
entity managed by EIG Partners, who have proposed
to acquire all the issues shares in Origin by way of a
scheme of arrangement
CHI
Customer Happiness Index
DMO
Default Market Offer
ERP
Enterprise resource planning
FID
Final Investment Decision
FEED
Front End Engineering Design
GJ
Gigajoule = 109 joules
JCC
Japan Customs-cleared Crude (JCC) is the average
price of crude oil imported to Japan. APLNG’s long-
term LNG sales contracts are priced based on the
JCC index.
JKM
Japan Korea Marker is the Northeast Asian spot price
index for LNG delivered ex-ship to Japan and Korea.
Joule
Primary measure of energy in the metric system.
Kansai
When referring to the off-taker under the LNG Sale
and Purchase Agreement (SPA) with APLNG, means
Kansai Electric Power Co. Inc.
kT
kilo tonnes = 1,000 tonnes
Term
Meaning
Mtpa
Million tonnes per annum
MW
Megawatt = 106 watts
MWh
Megawatt hour = 103 kilowatt hours
NEM
National Electricity Market
NPS
Net Promoter Score (NPS) is a measure of
customers’ propensity to recommend Origin to
friends and family
PJ
Petajoule = 1015 joules
PJe
Petajoules equivalent = an energy measurement
used to represent the equivalent energy in different
products so the amount of energy contained in these
products can be compared.
PPA
Power Purchase Agreement
Proposed
Acquisition
The proposed acquisition of Origin by
the Consortium
SPA
Sale and Purchase Agreement
Sinopec
When referring to the off-taker under the LNG Sale
and Purchase Agreement (SPA) with APLNG, means
China Petroleum & Chemical Corporation which has
appointed its subsidiary Unipec Asia Co. Ltd. to act
on its behalf under the LNG SPA.
SME
Small Medium Enterprise
TRIFR
Total Recordable Incident Frequency Rate
TW
Terawatt = 1012 watts
TWh
Terawatt hour = 109 kilowatt hours
VDO
Victorian Default Offer
VPP
Virtual Power Plant
Watt
A measure of power when a one ampere of current
flows under one volt of pressure.
Interpretation
All comparable results reflect a comparison between the current
period and the prior period, unless otherwise stated.
A reference to APLNG or Australia Pacific LNG is a reference to
Australia Pacific LNG Pty Limited in which Origin holds a 27.5 per
cent shareholding. A reference to Octopus Energy or Octopus is a
reference to Octopus Energy Group Limited in which Origin holds
an ~23 per cent shareholding. Origin’s shareholding in APLNG and
Octopus Energy is equity accounted.
A reference to $ is a reference to Australian dollars unless specifically
marked otherwise.
All references to debt are a reference to interest bearing debt only.
Individual items and totals are rounded to the nearest appropriate
number or decimal. Some totals may not add due to rounding of
individual components.
When calculating a percentage change, a positive or negative
percentage change denotes the mathematical movement in
the underlying metric, rather than a positive or a detrimental
impact. Percentage changes on measures for which the numbers
change from negative to positive, or vice versa, are labelled as
not applicable.
Directory
Registered Office
Level 32, Tower 1
100 Barangaroo Avenue
Barangaroo, NSW 2000
GPO Box 5376
Sydney NSW 2001
T (02) 8345 5000
F (02) 9252 9244
originenergy.com.au
enquiry@originenergy.com.au
Secretary
Helen Hardy
Share Registry
Boardroom Pty Limited
Level 8, 210 George Street
Sydney NSW 2000
GPO Box 3993
Sydney NSW 2001
T Australia 1300 664 446
T International (+61 2) 8016 2896
F (02) 9279 0664
boardroomlimited.com.au
origin@boardroomlimited.com.au
Auditor
EY
Further information about Origin’s
performance can be found on our website:
originenergy.com.au