Not a trader so can’t comment of the chart.
My view is more around fundamentals
Current upside
Significant debt reduction program will continue to reduce interest and financing charges, redemsion of the hybrids will significantly reduce costs.
With Lattice $1.4B sale and the over $1B already sold from the energy side of the business will reduce interest cost further and will put $200 -300M direct earnings.
Further sale of the metering business will reduce debt more and only add to earnings.
Oil price - with significant cost coming out of the Gas business iE the 650 Head count reductions should deliver 150M more to earnings, further work to reduce cost of production to Santos level is the key, dividends paid from APLNG are also key. Need to get cost of production below $30. A dollar increase in oil or a dollar in cost reduction adds millions to the bottom line.
On the Energy side wholesale electricity remain keys and production from key base load assets are key, I see more upside here if these asset are run harder,
On the gas retail side I see a lot of good, ORG seems to have the market covered and are holding all the cards with lots of options to run gas through its plants if needed.
Retails remains a small concern with ongoing discounting and Alinta’s aggressive campaigning to win customers. At some time the discount wars will have to stop as nobody wins.
I see a lot of upside still on the cost front for Origin, the overall operating cost seem very high still, so a $100M here is possible.
All in I see $400 to $500M in upside given the current directions by management.
I welcome otherviews on my analysis
Add to My Watchlist
What is My Watchlist?
