Key Points
- Origin Energy's profits increased by 83.5 per cent last financial year, according to a report released on Thursday.
- The Australian Council of Trade Unions said this would “come as a shock to many energy consumers" amid rising bills.
- It comes just a week after the Commonwealth Bank reported a net profit of $10.2 billion for the 2023 financial year.
Origin Energy, one of Australia’s largest energy producers, has reported an 83.5 per cent surge in profits for the financial year ending 2023, equating to a net annual profit of $1.06 billion.
The company released its annual report on Thursday morning, revealing that its underlying earnings – that is, the company’s total earnings before interest, taxes, depreciation and amortisation – soared from $2.11 billion in the 2022 financial year to $3.12 billion.
Origin CEO Frank Calabria cited “elevated commodity prices” and declining coal supply costs as key factors in the increased earnings, which saw Origin’s shares jump by as much as 2 per cent on Thursday.
Outside the Australian Stock Exchange, however, the energy provider’s billion-dollar profit margin has been less well-received, with some questioning whether the company’s savings were being passed on to consumers.
Such concerns are particularly fresh less than two years after Origin announced its customers’ energy bills would rise by up to 25 per cent, equating to hundreds of dollars per year, as a result of higher prices due to inflation and increased wholesale costs.
The Australian Council of Trade Unions (ACTU) suggested on Thursday that, within that context, the company’s profits surge would “come as a shock to many energy consumers."
“Australians will find it hard to swallow that Origin can post such an enormous increase in profits especially when we hear heartbreaking stories of people going without heating, hot water or sacrificing lighting their homes at night just to be able to make ends meet,” said ACTU assistant secretary Joseph Mitchell.
“Customers will rightly wonder how these big energy companies can justify such large profits, especially as Origin reports that it is due partly to [the fact that] the cost of purchasing energy for them has fallen, and they have failed to promptly pass on those savings to consumers.”
A report published in June by financial comparison site Finder revealed that almost 80 per cent of the 1,090 people surveyed said they planned to reduce their electricity usage in the winter months due to higher power costs, with respondents saying they had been switching off lights and power points when not in use, cutting down on the usage of heaters or air conditioners and reducing the amount of time spent working from home.
Origin’s gas prices also increased sharply in January, with average household tariffs in some parts of the country rising by as much as 22.1 percent, or $370 a year, based on average annual consumption.
“Like all retailers, we have been facing materially high gas costs over recent months, which means it costs us more to supply gas to our customers,” an Origin spokesman said at the time, according to the Australian Financial Review. “Increasing prices is never a decision we take lightly, especially when we know people are struggling with higher costs of living.”
When announcing Origin’s profit increases on Thursday, Calabria said the company had acknowledged the cost-of-living pressures, including high energy prices, and had significantly increased its support for customers as a result.
“We are targeting $45 million to support customers in hardship this year,” he said. “This is on top of the $30 million spent helping customers who needed support last year.”
“We continue to work with governments and regulators on efforts to support the most vulnerable members of our community.”
News of Origin’s profit earnings comes just eight days after the Commonwealth Bank , reaching a record $10.2 billion in full-year net profit after tax. It also comes on the same day that Telstra, Australia’s largest telecommunications company, reported an annual profit of $2.1 billion, with a total income of $23.2 billion for the 2023 financial year.
