Origin Energy reveals shock profit warning

ORIGIN Energy shares are expected to be hit today after it warned that its underlying profit would fall by up to 10 per cent.

ORIGIN Energy shares are expected to be hit today after the nation's biggest integrated energy retailer last night warned that regulatory and pricing decisions would cut its underlying profit by as much as 10 per cent this financial year.

"Having reviewed actual performance for the first four months of the financial year, and based on current forecasts for performance for the remaining eight months, Origin is revising its guidance for the 2013 financial year from around a 10 per cent increase to a 5-10 per cent increase in underlying earnings before interest, tax, depreciation and amortisation," Origin said in a statement.

"This revised guidance to underlying EBITDA will also result in a reduction in underlying profit of 5-10 per cent compared to the prior year."

Origin reported a net profit of $980 million for the 12 months to June 30, and just three months ago gave guidance that underlying EBITDA would increase by about 10 per cent and underlying profit would be in line with the 2012 financial year. Its underlying profit was $893m in the year to June. Origin has been a leading critic of the carbon tax, calling on the Climate Change Authority to conduct a review of the cost of the Renewable Energy Target Scheme that it says could add $1.4 billion to household electricity bills.

In its August 23 guidance statement, Origin also warned that regulatory uncertainty, particularly related to pricing decisions made by the Queensland Competition Authority, was hampering its ability to issue guidance.

Origin was forced to drop plans to increase electricity prices in Queensland in the face of public pressure on the Newman government in July and is seeking a judicial review of the ruling.

"Regulatory uncertainty continues to affect our trading conditions," Origin said last night.

It also said revised estimates for costs of the Small-scale Technology Certificates made by the Clean Energy Regulator would cost it an additional $40m. Origin shares closed down 14c at $11.05.

ADDITIONAL REPORTING: AAP