Origin Energy
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To Company Announcements Office Facsimile 1300 135 638 Company Australian Stock Exchange Limited Date 12 September 2008 From Bill Hundy Pages 179 Subject ANNUAL REPORT, REVIEW AND NOTICE OF MEETING Attached are the following documents: 1. 2008 Shareholder Review 2. The Annual Report including Financial Statements and Directors’ Report for year ended 30 June 2008 3. Notice of Annual General Meeting and Proxy Appointment Form These documents are being sent to shareholders in accordance with their elections as to the receipt of printed reports. Regards Bill Hundy Company Secretary 02 8345 5467 – [email protected] For personal use only Origin Energy Limited ACN 000 051 696 • Lvl 45 Australia Square, 264-278 George Street, Sydney NSW 2000 GPO Box 5376, Sydney NSW 2001 • Telephone (02) 8345 5000 • Facsimile (02) 9252 1566 • www.originenergy.com.au SHAREHOLDER REVIEW 2008 Review 08 Delivering STRATEGY PERFORMANCE GROWTH For personal use only Origin Energy Limited ABN 30 000 051 696 Contents P.2 Our year in review P.3 A message from your Chairman and Managing Director P.6 Company scorecard P.8 Operations review P.8 – Exploration and Production P.9 – Generation P.10 – Retail P.11 – Contact Energy P.12 – Sustainability P.13 Board of directors P.14 Executive management team P.15 Financial history P.16 Exploration and production data IBCFor personal use only Share and shareholder information Financial calendar 2008/2009 3/10/08 Final dividend paid 15/10/08 Annual general meeting 31/12/08 Half year end 26/2/09 Half year profi t announcement 30/6/09 Financial year end Cover photo: Tom Lynam, Spring Gully Field Operator, at a wellhead on site. STRATEGY PERFORMANCE GROWTH Since separately listing in 2000, Origin has pursued a strategy of developing a fuel integrated generation and retail business through acquisitions, major development projects and organic growth. Today, Origin is… a leading producer, wholesaler and retailer of energy in Australia and New Zealand. the largest holder of proved and probable gas reserves in eastern Australia. the largest owner and developer of gas fi red electricity generation in Australia. the largest green energy retailer in Australia and a leading wholesaler and retailer of energy. For personal use only Caring. Listening. Learning. Delivering. OUR YEAR IN REVIEW • 31 July 2007 – Announced an 80% net increase in 2P CSG • 14 February 2008 – Acquired balance of interests in reserves from the previous year. exploration permits over the Halladale and Black Watch fi elds off the south west Victorian coast. • 29 October 2007 – Announced a strategic expansion in geothermal energy through a 30% joint venture • 29 April 2008 – Proposal received from BG Group to acquire agreement with Geodynamics. all the shares in Origin through a scheme of arrangement. • 2 November 2007 – Commenced construction of • 30 May 2008 – Rejected BG Group’s scheme proposal the 630 MW gas fi red Darling Downs Power Station. and announced an increase in 2P and 3P CSG reserves of 91% and 121% respectively from 1 July 2007 to • 30 November 2007 – Awarded ‘Sustainable Company 15 May 2008. of the Year’ for 2007 by Ethical Investor magazine. • 13 June 2008 – Completed development of offshore • 6 December 2007 – Commenced the 120 MW expansion facilities for the Kupe Gas Project. of the gas fi red Quarantine Power Station. • 24 June 2008 – BG Group announced a hostile takeover • 20 December 2007 – Acquired oil and gas production assets offer for Origin. from Swift Energy in Taranaki, New Zealand. • 4 July 2008 – Announced the acquisition of the 640 MW • 22 January 2008 – Entered a strategic relationship with gas fi red Uranquinty Power Station and approval of the Epuron for the option to develop up to 590 MW of wind fi rst 550 MW of the gas fi red peaking power station at generation in New South Wales, starting with the 30 MW Mortlake. Rejected hostile takeover offer from BG Group. Cullerin Range Project. • 31 July 2008 – Announced a fi nal year-on-year net increase • 1 February 2008 – Committed to a $92 million expansion in 2P reserves of 66%, including a net increase of 92% in of the Mt Stuart Power Station, for additional generation 2P CSG reserves. capacity of 126 MW. Origin has an outstanding track record of delivering strong and consistent fi nancial results. 59 8,275 ^ 54.7 1,309 6,436 1,195 5,880 1,076 41.9 39.5 4,870 937 ^ † † 30 † 3,522 3,327 % % 24.8 % 2,389 532 20.2 491 1,655 17.1 29 405 12 8 EXTERNAL 305 EBITDAF* 2008 BASIC EARNINGS REVENUE 2008 $1,309 MILLION PER SHARE 2008 ($million) $8,275 MILLION ($million) per share) (cents 59 CENTS 0102 03 04 05 06 07 08 0102 03 04 05 06 07 08 0102 03 04 05 06 07 08 25 517 21 2,027 457 18 1,685 15 1,474 332 13 % † 301 % † %† 10 897 205 19 162 13 17 129 529 524 509 5 98 403 4 DIVIDENDS 2008 STATUTORY NET PROFIT CAPITAL For personal use only 25 CENTS AFTER TAX # 2008 EXPENDITURE 2008 (cents per share) (cents ($million) $517 MILLION ($million) $1,685 MILLION 0102 03 04 05 06 07 08 0102 03 04 05 06 07 08 0102 03 04 05 06 07 08 Acquisitions Growth Stay-in-business † When compared to the financial results for the year ended 30 June 2007. * Earnings before interest, tax, depreciation, amortisation, significant items and the impact of fair value changes to financial instruments. ^ EBITDAF increase of 12% based on EBITDAF from continuing businesses of $1,165 million in 2007 after elimination of contribution from the Networks segment which made no contribution to EBITDAF in 2008. Reported EBITDAF for 2007 was $1,195 million including the Networks segment. # Statutory profit before elimination of significant items. 2 ORIGIN Shareholder Review 2008 Kevin McCann Chairman (left) Grant King Managing Director (right) A MESSAGE FROM YOUR CHAIRMAN AND MANAGING DIRECTOR Origin Energy: Continuing to deliver This year has been signifi cant for Importantly, during this time, we have continued to deliver strong fi nancial performance and we have further Origin. By pursuing our fuel integrated consolidated a solid platform for the ongoing growth of generator and retailer strategy Origin your company. has become a leading integrated energy Financial performance company with interests in oil and gas We reported an underlying profi t of $443 million for the year production, merchant and contracted ended 30 June 2008, up 20% on the prior year, highlighting power generation and energy retailing. the strength of our existing businesses. Our statutory profi t for the fi nancial year to 30 June 2008 was Our long term focus on establishing an extensive gas $517 million, an increase of 13% compared with $457 million resource base with unequalled access to energy markets in reported last year. In addition to the underlying profi t, this eastern Australia is delivering signifi cant value to you – our statutory profi t contains a number of signifi cant items, shareholders. As the largest holder and leading developer of including the sale of our Networks business and Mokai CSG reserves, Origin is well placed to benefi t from rising energy For personal use only geothermal assets, the impact of fair value changes to prices and increasing demand for gas in eastern Australia. fi nancial instruments (predominantly associated with our Your Board has been working hard to look after your interests energy procurement activities), and one-off costs associated in light of BG Group’s hostile and conditional takeover offer. with the New Plymouth Power Station and the purchase of The Target’s Statement that was recently mailed to you the Sun Retail business. outlines our rationale for unanimously recommending Basic earnings per share calculated from the underlying that shareholders reject BG Group’s offer. profi t increased 14% to 50.6 cents on an expanded weighted average capital base of 875 million shares. This compares to 44.3 cents based on the same calculation from last year. 3 A MESSAGE FROM YOUR CHAIRMAN AND MANAGING DIRECTOR We have declared a fully franked fi nal dividend of 13 cents per Stay-in-business capital expenditure associated with the share in view of the strength of our underlying profi t and sound maintenance of ongoing operations was $178 million for the fi nancial position. This brings the total fully franked dividend for year of which $80 million was attributable to Contact Energy, the year to 25 cents per share, an increase of 19% over the $49 million related to Exploration and Production and prior year. $42 million related to Retail (customer systems and LPG). To provide a clearer understanding of operational performance Growth capital expenditure was $1,398 million, 141% higher than for our stakeholders, we report earnings before interest, tax, the prior period. This included expenditure of over $40 million in depreciation, amortisation, signifi cant items and the impact of the following areas: Kupe Gas Project ($291 million); CSG assets fair value changes to fi nancial instruments (EBITDAF). For the in Queensland ($273 million); Darling Downs Power Station year to 30 June 2008, EBITDAF from continuing businesses was ($248 million); Contact Energy ($128 million); Geodynamics $1,309 million, a 12% increase from the prior year of $1,165 million. ($105 million); Otway Gas Project ($48 million); and expansion of the Quarantine Power Station ($45 million). Record production, sales and revenues have resulted in higher earnings from the Exploration and Production segment. This Capital expenditure on acquisitions totalled $109 million covering refl ected our growing coal seam gas operations, a full year acquisition of exploration and production assets from Swift Energy contribution from the BassGas Project and an initial contribution in New Zealand and the Halladale and Black Watch exploration from the Otway Gas Project.