(Reuters) - Origin Energy <ORG.AX>, Australia's top power and gas retailer, reported a 51 percent rise in its full year underlying profit and said on Wednesday it would remain focused on cutting debt rather than reviving its dividend.
The result and the debt reduction beat analysts' forecasts and it gave a strong outlook for the year ahead, pleasing investors who sent Origin's shares up as much as 6 percent.
"Given our primary focus on reducing debt, we have determined not to pay a dividend for the second half of 2017," Origin Chairman Gordon Cairns said, adding that it was in the best interests of shareholders.
The company cut net debt to A$8.1 billion ($6.4 billion), down A$1 billion from a year ago.
Origin said it is aiming to cut net debt to below A$7 billion by the end of its full-year 2018, helped by the divestment of its gas business Lattice Energy.
Underlying profit for the year to June 30 rose to A$550 million ($430 million) from A$365 million a year ago, beating analysts' estimates around A$524 million.
Revenue grew 16 percent to A$14.11 billion.
Origin said it expects annual underlying earnings before interest, tax, depreciation and amortization (EBITDA) from its core energy markets business for the year to June 2018 to grow as much as 21 percent to A$1.7 billion to A$1.8 billion.
Analysts at Morgan Stanley and Royal Bank of Canada said the energy markets forecast for 2018 was better than expected, a touchy issue at a time when the Australian government is leaning on power retailers to slash prices to households.
Origin Energy's bottom line was marred by A$3.1 billion in impairment charges, including A$815 million for its 37.5 percent stake in the Australia Pacific liquefied natural gas (LNG) project, and a write down of A$357 million on Lattice Energy.
Origin was not alone in writing down the value of a coal seam gas-to-LNG project. Rival Santos <STO.AX> said on Tuesday it would book an $870 million impairment on its Gladstone LNG project, which sits next to APLNG on Australia's east coast.
($1 = 1.2765 Australian dollars)
(Reporting by Nicole Pinto in Bengaluru; Editing by Sonali Paul and Richard Pullin)
