Origin Energy Lowers EBITDA Guidance, Shares Dip 4%

Origin Energy Ltd. cuts its 2025 EBITDA guidance, now expecting $1.3B-$1.4B, down from $1.1B-$1.4B. The negative outlook on Octopus Energy adds to investor concerns, contributing to a 4% drop in shares. Professional investors should weigh these factors when considering their positions.

Date: 26-05-2025

AI Rating: 5

Financial Outlook Review: The recent report indicates a significant revision in Origin Energy Ltd.'s EBITDA guidance for the full year 2025. The narrowed range of $1,300 million to $1,400 million reflects potential operational challenges and changing market dynamics, particularly stemming from unusually warm weather in the UK and the implications of past energy crisis subsidies.

This updated guidance wasn't just a minor adjustment; it signifies a shift from an earlier outlook that had a wide range accommodating better-than-expected performance. The previous estimate of $1,100 million to $1,400 million now excludes the low end, narrowing investor confidence significantly.

Octopus Energy Integration: Furthermore, the projection that Origin expects its share of Octopus Energy's FY25 Underlying EBITDA to reflect a loss of $0 to $100 million compared to prior expectations of a positive contribution adds fuel to investor skepticism. The adjustment reflects a downward trend which can raise concerns about future revenue streams and profitability.

Market Reactions: As indicated, shares fell approximately 4% post-announcement, reflecting immediate investor reaction to the revised guidance. This type of drop typically suggests lacking confidence in a company's upcoming financial health and could affect future stock performance if the market continues to anticipate negative outcomes.

From a professional investor's viewpoint, the outlook on earnings, particularly under EBITDA and potential profitability in conjunction with market conditions in the UK, presents a negative indicator. Such metrics could affect stock prices in the short to medium term, given the squeezed earnings expectations and altered market dynamics.

Stocks: OGFGY