Origin Energy has followed a long list of other companies in cutting spending to preserve cash during the current COVID-19 crisis.
Like so many energy companies, Origin is facing the twin impacts of the COVID-19 crisis killing demand, while global prices slump because of the threatened price and volume war between the Saudis, Russia, and US frackers.
In a statement to the ASX yesterday the company assured investors it is in a “resilient” financial position to withstand the period of economic uncertainty while detailing the cuts to spending this financial year and next.
Capex for the year to June 20, 2020, has been cut by 5% to 10% over the current quarter and by up to 30% overall of 2020-21.
Energy rivals such as Oil Search, Beach, Santos and Woodside have taken the large axe to their Capex plans this year and next to limit the outflow of cash.
Origin CEO Frank Calabria told the ASX on Monday that the company was maintaining its earnings forecast in its energy markets business at between $1.4 billion and $1.5 billion for the financial year to June 30, subject to any material increase in bad and doubtful debts.
It also maintained expected cash distributions from its Asia Pacific LNG joint venture project in Queensland at between $1.1 billion and $1.3 billion.
“The impacts experienced to date can be absorbed within the current guidance range, however considerable uncertainty remains regarding the final quarter impacts,” Mr. Calabria said.
The shares edged up 4% in Monday’s trade to $4.95.