April 29, 2020 / 11:36 PM / a month ago

Australia's Origin Energy APLNG revenue falls on lower contracted sales

FILE PHOTO: The logo of Australian energy company Origin is pictured in Melbourne, Australia, July 3, 2016. REUTERS/Jason Reed

(Reuters) - Electricity and gas retailer Origin Energy Ltd (ORG.AX) on Thursday said revenue from its stake in the Australia Pacific LNG (APLNG) project fell 18% in the third quarter due to lower contracted sales despite higher output.

Production at APLNG, the largest producer of natural gas in eastern Australia, rose 6% on-year to 66.8 petajoules during January-March, but fell marginally below the December quarter’s record level.

Steady output at APLNG has helped the Sydney-based company weather persistent weakness in its energy business, which has lately been hit by stiff competition, power outages and price regulation.

APLNG is a joint venture between Origin, ConocoPhillips (COP.N), and China’s Sinopec (600028.SS).

Origin’s revenue from APLNG came in at A$628.5 million ($411.60 million) for the quarter, down from A$763.9 million a year earlier, as lower contracted LNG sales and weaker realised prices countered a spike in domestic gas revenue.

“In energy markets, we are already seeing an initial impact from the (coronavirus) pandemic on electricity demand, which along with milder weather and lower customer numbers and usage, contributed to lower volumes compared to this time last year,” Chief Executive Officer Frank Calabria said.

Retail electricity volumes fell 11%, while business volumes were down 3%, with only the initial impacts of COVID-19 showing at this stage, the company said.

Origin maintained its full-year core earnings forecast for its energy division, saying it had not seen material hit to operations from the pandemic at a time when companies worldwide were scrapping previous estimates.

Electricity retailers have emerged as relatively resilient to the coronavirus-driven downturn on being deemed as essential services provider but still face substantial risk from customers’ inability to pay bills, as Origin warned earlier in the month.

Reporting by Arundhati Dutta and Anushka Trivedi in Bengaluru; Editing by Subhranshu Sahu

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