But managing director Grant King said the adoption of Australia equivalent International Financial Reporting Standards (A-IFRS) would create volatility and make forecasting more difficult.
"Under these circumstances and based on prospects for the coming year, our current expectation is that estimated recurring A-IFRS earnings of $299 million will increase by approximately 10% in 2006," King said.
Origin’s generation arm struggled, with earnings before interest, tax, depreciation and amortisation (EBITDA) falling by 23% to $52.7 million, although the previous year had been boosted by a one-off $9.4 million tax consolidation gain.
In contrast the exploration and production business lifted by 25% to $245.5 million and the retail business had a 7% rise in EBITDA to $254.1 million.
An initial contribution from Origin’s new New Zealand arm, Contact Energy, also boosted the bottom line. But earlier this month, Contact, which generates nearly a third of New Zealand's electricity, reported a lower-than-expected 8 percent rise in third-quarter profit, as high costs offset buoyant power prices and gas sales.
Analysts are wary about profit margins for Australia' and New Zealand’s existing energy retailers as regulators put presure on already tight margins and new players enter the markets.
Earnings in the the current financial year would be boosted by the Spring Gully coalbed methane project in Queensland, which was completed on schedule and on budget at a capital cost of $199 million and began operating in June.
"Spring Gully will ramp up production over the year delivering into the long term contract with AGL, and contracts with QAL and Incitec Pivot in 2007," King said.
Oil production from the Perth Basin and the commissioning of the BassGas Project in the December quarter would also contribute to the bottom line in the coming year.
Origin also expected a full 12 months of contribution from its New Zealand energy business Contact Energy, which it acquired last October, to boost the group’s performance.
In the medium-to-long term, growth would be driven by the Otway Gas Project, the Kupe Gas Project in New Zealand and the development of further opportunities in electricity generation, according to King.
Origin’s revenue increased 38% to $4.914 billion during the 12 months to June 30, 2005.
King said the result was driven by an the improved contribution from exploration and production, a strong performance from the retail business and a initial contribution from Contact Energy over the nine months since acquisition.
The exploration and production business lifted earnings before interest, tax, depreciation and amortisation (EBITDA) by 25% to $245.5 million.
The retail business had a 7% rise in EBITDA to $254.1 million. But the generation business's EBITDA fell by 23% to $52.7 million, although the previous year had been boosted by a one-off $9.4 million tax consolidation gain.
Meanwhile, Origin is counting on the the BassGas project, in Victoria’s offhsore Otway Basin, to start contributing to the bottom line in 2005/06.
The project was originally slated for commissioning in September 2004 but a dispute with contractor Clough pushed the start up back to October 2005. Origin now expects the project to come online in the last quarter of 2005.
Last month Origin warned that costs at the A$450 million BassGas venture could blow out by as much as 25% because of rectification work needed on an onshore gas plant and the Yolla A platform.
The project is targeting annual production of around 20 petajoules of gas and one million barrels of liquids.
The final cost of BassGas can’t be determined until arbitration between Origin and Clough has been finalised. This is not expected to occur until the first half of next year.
