Origin Energy (ASX:ORG) reported “solid” 2026 half-year results and upgraded full-year guidance for its Energy Markets segment, citing stronger-than-expected operational performance, customer growth and continued cost discipline. CEO Frank Calabria told investors the company’s retail momentum continued to strengthen, while new grid-scale batteries provided additional flexibility across the portfolio.
Financial snapshot and dividend
For the half, Origin reported statutory profit of AUD 557 million and underlying profit of AUD 593 million. Underlying EBITDA was AUD 1,589 million, with higher Energy Markets earnings offset by lower contributions from Octopus Energy and a lower Integrated Gas outcome compared with the prior period.
Energy Markets: stronger electricity margins, cost-to-serve reductions
Energy Markets delivered segment EBITDA of AUD 860 million for the half, which management said was higher than expected. CFO Tony Lucas said Energy Markets EBITDA rose 17%, supported by higher electricity earnings due to lagged flow-through of higher wholesale prices into retail tariffs, alongside lower green scheme costs and solar feed-in costs.
Gas earnings in Energy Markets were lower versus the prior period, reflecting lower trading volumes and legacy contracts rolling off. However, Lucas said the company still expects full-year gas earnings to be “moderately higher” than FY2025 as sale and purchase contracts reprice in the second half.
Management highlighted ongoing cost-to-serve reductions, with AUD 32 million reduced in the half and “ongoing Kraken benefits.” Calabria said Origin is on track to deliver its FY26 cost-savings target of AUD 100 million to AUD 150 million (or by FY26), while noting higher bad and doubtful debts following the non-repeat of energy bill relief.
Customer growth, acquisitions, and technology initiatives
Origin grew its customer base by 96,000 during the half, marking more than 10 consecutive halves of customer growth. Calabria said the increase included 52,000 customer accounts from the Energy Locals acquisition. He also noted a subsequent acquisition completed in February—First Energy—which is expected to add 80,000 additional customers.
The company pointed to continued investment in technology and customer experience, including expanded use of AI. Calabria said digital interactions reached 80% (up from 75%), and voice-based servicing using AI increased to serving over 100,000 customers, up from 25,000.
Energy supply: batteries online, Eraring extension, and APLNG operations
Origin said generation performance was strong across its fleet, with high reliability for gas peaking and hydro. Calabria said coal for FY2026 was largely contracted at prices lower than the prior financial year. For Eraring, Origin generated 6.4 TWh in the half at 72.26% availability (after planned and unplanned outages).
The company brought Eraring battery stage one online, generating revenue since December, and said it was delivered on time and on budget. Supernode One was in commissioning in January and also earning revenue. Origin committed a further AUD 80 million to expand Eraring Stage Two, increasing the project to nearly six hours of storage. Overall, management described a 1.7 GW / 6.3 GWh storage program underway, “on time and on budget,” with post-tax return targets of 8% to 11%, with early asset life expected toward the upper end.
Origin also reiterated that Eraring Power Station operations have been extended to April 2029. Executive Greg Jarvis said the company is “very confident” in maintaining Eraring to that date and expects to manage units proactively by taking them out during periods of low demand and high capacity to support reliability, without major outages.
In Integrated Gas, segment EBITDA was AUD 860 million, described as in line with expectations for APLNG and LNG Trading. Lucas said APLNG experienced lower realized prices and volumes, reflecting softer oil and spot LNG markets and the impact of the Sinopec price review effective 1 January 2025. APLNG production of 339 petajoules for the half was described as on track to meet updated full-year guidance of 645 to 680 petajoules. Calabria said APLNG unit costs remained stable at AUD 4.30/GJ.
Octopus and Kraken: growth, investment, and transactions
Octopus recorded an EBITDA loss of AUD 89 million for the half, which management attributed to seasonality, UK regulatory costs, investments in smart tariffs, and continued investment to scale non-UK retail and energy services. Lucas added that EBITDA was also affected by investment in accelerated client delivery, growth opportunities, and a change in capitalization policy for technology development costs at Kraken.
Calabria said Octopus added 1.2 million customer accounts in the half, with 0.8 million of those outside the UK. Octopus’ UK customer accounts increased by 400,000 to 14.5 million, while international accounts rose by 800,000 to 3.5 million. Management said Germany reached 1 million customer accounts.
Kraken announced its first standalone equity raise at a look-through valuation of $8.65 billion, alongside a licensing agreement that increased contracted accounts to 90 million. Calabria said Kraken has doubled contracted annual recurring revenue over the last 18 months. Origin said it will invest AUD 210 million as part of the raise, receiving 1.5% in exchange for releasing exclusivity to the Kraken platform in energy in Australia, and that Origin retains a 22.7% economic interest in Kraken and Octopus following the transactions. Management also flagged an investor day with Kraken’s CEO on 28 April in Sydney.
Updated guidance and capital outlook
Origin upgraded full-year Energy Markets EBITDA guidance to AUD 1.55 billion to AUD 1.75 billion, up from AUD 1.4 billion to AUD 1.7 billion. Guidance for LNG Trading and Octopus was unchanged. Group capex guidance was AUD 900 million to AUD 1.1 billion, and Origin provided APLNG cash distribution expectations to Origin of AUD 700 million to AUD 950 million.
In Q&A, management discussed the outlook for FY2027, pointing to tailwinds from battery earnings and lower coal costs, but headwinds from lower forward wholesale prices potentially flowing into lower default market offer tariffs. Calabria and Lucas said the company was not providing specific FY2027 guidance, while noting the wholesale team has been active early on positioning for 2027. On dividends, management emphasized maintaining a sustainable, fully franked payout within its target leverage range and said capital allocation would continue to balance investment opportunities and shareholder returns.
About Origin Energy (ASX:ORG)
Origin Energy Limited, an integrated energy company, engages in the exploration and production of natural gas, electricity generation, wholesale and retail sale of electricity and gas, and sale of liquefied natural gas in Australia and internationally. The company operates through, Energy Markets, and Integrated Gas segments. Its exploration and production portfolio includes the Bowen and Surat basins in Queensland; the Browse basin in Western Australia; and the Cooper-Eromanga basin in Queensland.
