Frbiz.com Reports Origin Energy Ltd Readies For Carbon Constrained World

The company continued to grow during the global recession and still expects underlying profit for 2010 to be about 15 per cent higher than the previous year, it told investors at its AGM in Sydney on Friday.

Underlying profit for the year ended June 30, 2009 was $530 million, company accounts show.Chairman Kevin McCann told the meeting that Origin had been preparing for a carbon-constrained world.

“A shift from coal to natural gas for baseload power generation is inevitable if the world is to take large strides towards a lower emissions economy,” McCann said. “With our extensive gas reserves, in CSG (coal seam gas) and conventional gas, and as Australia’s leading developer of gas-fired electricity generation, Origin is very well placed to take advantage of that shift,” he said.

McCann said 2009/10 had begun with existing businesses well-placed and the CSG to liquefied natural gas (LNG) joint venture with ConocoPhillips established.”Your company is in a very strong financial position with access to $4.4 billion of cash and undrawn committed debt facilities, as of 30 September 2009,” McCann told the meeting.

With debate raging about the level of executive pay, McCann foreshadowed the company will make further submissions to the Productivity Commission about the issue. He said the two strikes proposal, and the “no vacancy” rule included in the recent draft report from the Commission were “unhelpful and unnecessary”.

The draft report from the Commission included a rule whereby two successive negative votes of 25 per cent or more on a company’s remuneration report would see the whole board face re-election.The proposed no vacancy rule would end the ability for boards to limit new nominations to themselves.

Origin managing director Grant King said that in the past year the company had doubled its operating capacity, and expected that by the end of 2010 calendar year it would have again almost doubled generation capacity, to 2,800 megawatts.

“The recent passage of the Renewable Energy Target legislation will drive significant investment in renewables technologies and Origin has positioned itself to respond to the Renewable Energy Target with a portfolio of renewable energy supply, including wind, geothermal and solar,” King said