CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Understanding Origin’s FY21 Guidance update in 30 seconds

We examine the key takeaways from the energy company’s latest market release.

The Origin Energy (ORG) share price fell 6.85% on Thursday, 4 February, after the company provided, what the market perceived as a poor FY21 guidance update.

Origin Energy share price: Understanding the guidance update in 30 seconds

For traders, here are the must-know points from Origin’s latest FY21 guidance update:

  • Full-year, FY21 Energy markets underlying earnings (EBITDA) are expected to come in at between $1,000-1,140 million, down from prior guidance of between $1,150-1,300 million
  • Australian Pacific LNG (APLNG) production has been raised to 685-705 petajoules, while distribution breakeven for APLNG was lowered to US$24-28 BOE
  • Cash distribution from APLNG (previously not provided), is now expected in the $575-675 million range
  • Full-year CAPEX is expected to be lower, while corporate costs are expected to be higher

Commenting on this guidance update, RBC analysts – who have a $5.50 price target on ORG – said:

‘Despite this downgrade, Origin continued to have a relatively strong FY21 FCF yield, and with a limited medium term capex spend outlook at ~$400-440m in FY21 per annum, implying potential for a solid dividend.’

However, the broker did add that:

‘Tax losses have also led to limited availability of franking credits and therefore we continue to expect an unfranked / partially franked FY21 dividend at the low end of Origin's targeted FCF range of 30-50% guidance.’

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. All share prices are delayed by at least 20 minutes. Prices are indicative only.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.