Australian households should benefit from strong competition among energy retailers in the coming year, Origin Energy says.
Households can look forward to some power bill relief this year due to fierce competition between energy retailers.
Origin Energy managing director Grant King said his company’s gross profit per customer was falling because of stiff market competition and squeezed margins.
“It’s good for customers – they’ve got lots of choices,” Mr King told reporters after the company reported a 39 per cent drop in half year profit.
Energy bills had risen recently due to cost pressures including higher network costs and green charges, but those pressures had now moderated in Victoria and NSW, he said.
Some costs were still being passed through to Queenslanders, however.
But the outlook for customers was improving, Mr King said.
“If the outlook for customers gets better and better then maybe the outlook for retailers gets better, but right now competition’s tough and our margins are being compressed,” he said.
Origin expects a stronger performance in the second half of the financial year after higher liquefied natural gas (LNG) funding expenses and impairments impacted its first half profit.
The company is an oil and gas producer, power generator and retailer.
Mr King said he expects energy demand to remain stable, and the level of discounting and exploration would be key to Origin’s full year financial performance.
Origin Energy’s net profit in the six months to December 31 was $322 million, down from the $524 million in the same period a year earlier.
Underlying profit, which excludes one-off financial items, increased by five per cent to $381 million.
Shares in Origin dropped 30 cents to $14.55.