• Annual underlying profit soars 58%
• FY25 Energy Markets EBITDA forecast to fall
• Costs, lower electricity prices to weigh in FY25
• Shares dip nearly 10% to a 4-month low

Aug 15 (Reuters) - Shares in Australia's Origin Energy (ORG.AX) , opens new tab crashed 9% on Thursday despite reporting a 58% jump in full year profit, with investors reacting to higher costs and a warning that profit in its electricity generation business would fall in fiscal 2025.

The country's second-largest power producer expects a pre-tax measure of earnings in its Energy Markets division to drop as much as a third as state-set electricity prices decline and the coal that fires a large power station gets more expensive.

The company also reported that costs in the division rose 40% to A$748 million in the year ended on June 30 as bad debts and labour costs spiralled. Origin said it expected those costs to modestly improve this year.

Origin shares were down 9.7% at A$9.58 at 3:12 p.m. (0512 GMT), while the broader benchmark (.AXJO) , opens new tab rose 0.2%.

CEO Frank Calabria said he hadn't spoken to investors about the results but that the company remained focused on delivering on its strategy.

"I expect it's about energy markets outlook relative to expectations, but I'll learn more, the market will react the way it reacts," he said in an interview.

"In the meantime we're very much focused on delivering our results, executing our plans."

Origin forecast underlying earnings before interest, taxes, depreciation and amortization (EBITDA) for its Energy Markets division in fiscal 2025 at A$1.1 billion to A$1.4 billion ($724 million and $921 million), down from A$1.66 billion reported on Thursday.

Analysts at UBS said the midpoint of the unit's guidance for fiscal 2025 is 13% lower than consensus estimates.

Origin reported A$1.18 billion in underlying profit for the year ended on June 30, up from A$747 million a year ago. But it missed an LSEG estimate of A$1.34 billion.

The result benefited from a big jump in electricity prices and a temporary cap on coal prices that restrained fuel costs.

Output rose at Origin's Eraring coal power plant, Australia's largest, where the government in May agreed to underwrite losses in exchange for Origin keeping the plant open for an extra two years to guarantee energy security.

The company said its annual performance was also helped by higher production and greater hedging earnings in its Integrated Gas business, where its owns a 27.5% stake in the Australia Pacific Liquefied Natural Gas (LNG) project.

The Sydney-based company declared a final dividend of 27.5 Australian cents per share, compared with 20 Australian cents a year earlier.

($1 = 1.5202 Australian dollars)

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https://www.reuters.com/business/energy/origin-energy-annual-profit-soars-shares-slip-bleak-electricity-outlook-2024-08-15/