By David Winning
SYDNEY--Origin Energy Ltd. forecast a hefty impairment charge on a weaker outlook for commodity prices and the economic impact of the coronavirus pandemic, with more than half of the writedown tied to the Australia Pacific LNG project.
Origin estimated a post-tax charge of between 1.16 billion Australian dollars (US$809.2 million) and A$1.24 billion would be recorded in its results for the year through June.
The company said its share of the Australia Pacific LNG project would be impaired by A$720 million-A$770 million, driven by lower oil-price assumptions.
A noncash charge of A$440 million-A$460 million would also be recognized, relating to an onerous contract provision associated with Cameron LNG.
"Origin has responded quickly to Covid-19 and the decline in commodity prices, reducing operating costs and capital expenditure, and these actions have improved resilience and helped to mitigate some of the impacts on our business," said Chief Executive Frank Calabria.
"These factors, and the broader macroeconomic environment, have contributed to our revised medium and long-term outlook for commodity prices," he added.
Origin said it expects no change to existing guidance for the 2020 fiscal year, including underlying earnings before interest, tax, depreciation and amortization of A$1.4 billion-A$1.5 billion from its Energy Markets business.
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