Origin Energy Reports 3% Revenue Dip but Adds 600,000 Customers in Q2 2025

Integrated Gas Performance and Outlook

Origin Energy’s latest quarterly report for June 2025 highlights a nuanced performance in its Integrated Gas segment, primarily the Australia Pacific LNG (APLNG) joint venture. While production edged up 1% quarter-on-quarter, revenue declined by 3%, largely due to a lower realised LNG price averaging US$10.26 per million British thermal units (mmbtu), down from US$10.70 in the prior quarter. Year-on-year, FY25 production fell 2%, reflecting natural field declines and operational challenges, yet revenue remained stable, supported by steady domestic gas prices and a concluded price review with Sinopec effective January 2025.

Looking ahead, Origin projects FY26 production between 635 and 680 petajoules (PJ), a modest reduction from FY25, driven by natural declines in some fields. To counter this, the company plans increased capital and operational expenditure, between $2.9 billion and $3.2 billion in capex and $4.3 to $5.0 per gigajoule in opex, focusing on well optimisation, infrastructure upgrades, and exploration activities. These investments aim to sustain medium-term supply and offset declines, though some initiatives await joint venture approval.

Energy Markets – Stability Amid Shifting Demand

In the Energy Markets segment, Origin reported steady electricity sales volumes for FY25, with a slight 3% decline in natural gas volumes, attributed mainly to lower business sales and reduced gas use for electricity generation. Despite these volume shifts, the wholesale portfolio performed strongly, benefiting from good generation plant availability and effective contracting strategies that navigated market volatility. Notably, approximately 80% of the anticipated Eraring coal volume for FY26 is now contracted or hedged at prices comparable to FY25, providing some revenue certainty.

Customer accounts across electricity, gas, and internet services grew by 104,000 in FY25, underscoring Origin’s success in expanding its retail footprint despite broader market challenges such as weather variability and energy efficiency gains reducing per-customer consumption.

Octopus Energy and Kraken Technologies Drive Growth

Origin’s international retail arm, Octopus Energy, continues its rapid expansion, adding roughly 600,000 net customer accounts in the quarter across the UK and international markets. With 7.6 million customers and 14 million accounts in the UK alone, Octopus has solidified its position as the largest UK energy retailer. Meanwhile, Kraken Technologies, the technology platform powering Octopus and other retailers, has grown its contracted accounts by 45% in FY25 to 74 million, recently securing its first major US customer, National Grid. This milestone positions Kraken on track to reach its 2027 target of 100 million contracted accounts, enhancing recurring revenue streams.

Renewables and Battery Projects Progress

Origin is advancing its renewable energy and storage ambitions, with significant progress on the Eraring and Mortlake large-scale battery projects. Both are moving forward as planned, complemented by ongoing environmental approvals for the Yanco Delta Wind Farm. These developments align with Origin’s strategic pivot towards cleaner energy solutions, aiming to balance its traditional gas and electricity operations with sustainable investments.

CEO Frank Calabria emphasised the company’s balanced approach, highlighting consistent cash flow from APLNG dividends, strong retail customer growth, and strategic investments to support medium-term supply and renewables. The company’s FY26 outlook reflects cautious optimism, balancing natural production declines with targeted capital deployment and operational efficiencies.