Origin Energy Limited

Okay, good morning, everyone, and welcome to the Origin Energy 2024 half-year results presentation. I'm Frank Calabria, and I'm joined here in Sydney today by the Origin executive leadership team. And while I'm on the topic of the team, many of you have seen that we made an announcement a couple of weeks ago that after six years at Origin and a career spanning more than 40 years, Laurie Tremaine has decided to retire in July this year, something he has been planning and also discussing with me for some time. And so while we have a few more months with Laurie at Origin, I would like to take this opportunity in front of all of you to acknowledge just the key role he has played in the repositioning and growth of Origin, and also as an integral member of the executive team. As we said in that announcement, a process has commenced to identify a successor, and we will share more information at the appropriate time. And I know many of you will get an opportunity to see Laurie over the coming days and weeks. So congratulations, Laurie. Slide two contains the outline for today, which most of you should be familiar with. This will be followed by an opportunity for you all to ask questions. Just pausing on the introduction slide, I just wanted to really outline the first section. So in this first section, we'll go through Origin's value proposition, how we're tracking on the execution of our strategy, key financial highlights for the half year, and also, very importantly, our continued focus and commitment to support customers and communities. which is more important than ever. And I'd like to share some of the specific things we're doing, but just also to continue to remind you that's at the core of the purpose at Origin. And as I said, we're never more important than the times we live in today. So just turning to slide four. Origin represents a unique energy transition value proposition. In energy markets, we have a retail business with scale and strong differentiated capabilities. We have a flexible generation portfolio that is difficult to replicate and increasingly valuable. And we have growth opportunities through emerging businesses and also investing into the transition. The energy transition is global, and through our investment in the rapidly growing Octopus Energy, we are creating value from this. Firstly, through their world-class enterprise software platform, and also their energy transition business, which you'd know through their UK retail business, but rapidly growing internationally and through energy services. Third dimension to the proposition is gas, which will play an increasingly valuable and critical role that is already today and for the future energy mix for many years to come. And I think that's increasingly appreciated. Our integrated gas business as both shareholder and operator of the high quality APLNG gas resource is reliably delivering gas and did that again in the last six months and also delivering very robust cash flows. I'll expand on the value proposition over the coming slides for those three aspects of Origin. It's worth just reflecting right now though over recent times at Origin, the corporate activity that you're no doubt aware over the last year or so and the strong business performance both stand out for me. Clearly the corporate activity has shone a spotlight on our business and what I believe to be an advantaged position that we hold. At the same time, I'm also proud of the strong business performance the team have delivered over this period. So both of these have enhanced our confidence on strategic direction and also our capabilities to execute. And I think equally important, we're excited about the opportunities ahead and getting after them. I think we've got good momentum and you've seen over recent times our investments in the Araring and Mortlake batteries. We've increased our stake in Octopus and we made the acquisition of two retail aggregator businesses, just to name a few of the things that have been underway. It is also timely with those two events over the last six months to evaluate our key strategic choices and our investor proposition. And so consistent with our message at the end of last year, we are actively working on this and we'll share more with you over the coming months. We do have an evolving view on capital allocation preferences and Laurie will discuss on our views in his section and expand on that a little further there. But overall, our beliefs are that there are good transition investment opportunities that deliver growth and equally the need to deliver good returns to our shareholders is paramount. So now turning to the financial highlights. Our underlying profit of 747 million is up from 44 million in the corresponding half in 2023. Our underlying EBITDA has now grown to 1.995 billion. Our balance sheet is healthy, and for many of you that have been on the journey with Origin, you would be pleased, like I am, to see that our adjusted net debt to underlying EBITDA is now at 0.9 times EBITDA. Our pre-tax return on capital employed over a rolling 24-month basis is 12.1%. And on the back of the business strength and performance and the confidence I mentioned earlier, we have declared an interim fully franked dividend of 27.5 cents per share fully franked, which is up from 16.5 cents per share for the equivalent period. On slide six, I outline our ambition to lead the energy transition through cleaner energy and customer solutions. This should be a slide that's familiar to you all and our three strategic pillars and how we create value. This was launched in early 2022 and it has been our clear focus. And the reason I include that is to remind everyone as we turn to page seven or slide seven, we did at the same time set ourselves ambitious medium term goals to achieve when executing our strategy and also to hold ourselves accountable to. And we highlight the summary of those achievements on this slide, which I won't go through in item. You can see them all, but they'll be covered throughout the presentation largely. Now turning to that value proposition and peeling it away further. So slide eight highlights the value and growth drivers of energy markets that underpin that value proposition. Those growth and value drivers should be familiar to you based on the rainbow chart that you may have seen in the last results presentation that talked about the trajectory over the medium term. Our retail business has scaled strong brand and now has all customers on the Kraken enterprise software platform, which is an incredible achievement. They're not easy projects to do. So we're very pleased by that. And from which we will drive further benefits. Wholesale gas is a competitive strength through the combination of the assets and contracts we have. And we've recently concluded the beach contract price review that strengthens our medium term earnings outlook. Turning to wholesale electricity and our existing power asset base, we are continuing to engage with the New South Wales government on the timing of closure of Araring. And I'm just reminding everyone that we have the largest thermal peaking fleet, which is becoming more valuable as flexibility is more valuable as the market continues to increase towards more renewable energy. And we are growing renewables and storage. We have a pipeline of battery storage projects, some underway and more to come, and we'll share more on that. We now have 1.2 gigawatts on our virtual power plant, well on our way to achieve our two gigawatt target in a capital light way, and we are developing a portfolio of renewable and development options. Just pause on this at the moment because at the time prior to the bid by Brookfield and EIG, we had stated that a target of about four gigawatts in both renewables and battery storage by 2030. And while we are evaluating this, this should be your starting point, not the 14 gigawatt that was put forward by Brookfield. And I just do that to guide you as to where to start from. And that's where we're thinking now. But we'll continue to evaluate that. Turning to retail, I talk about that scale, strong brand and leading platform. You can see that we've delivered more than 300,000 customer accounts in growth since the financial year 21. We're advancing the product offerings we take to market. We've invested in new channels and segments, and we have over 78% of our customers interacting with us digitally. I talked about that leading platform being Kraken to put 4 million customer accounts onto that and to deliver that through this time. We feel like we're in a very strong position. It's a platform that has a number of advantages. It's low cost to scale. It has rapid development. It's a modern platform. It has AI capability. And at the same time, we've built a new business in retail with an operating model and ways of working established that align to the way Octopus leads its retail business. This is all pointing to the benefits that we're delivering today, but it's fair to say that we've got more to go. We can see the improvement in customer happiness over the last six months. We have an improved differential to churn to market, and we certainly have a customer-centered culture and high engagement continuing to go forward. And we have cost-to-serve improvements underway, which I'll expand on. We have delivered them, but we've got more to go in a more challenging cost environment. And then turning to that wholesale electricity position that we hold today, both existing assets and going into the future, you can see there the preeminent thermal peaking fleet, which is going to be very difficult to replicate, but also has more value through the transition we'll actually expand on in a moment. We have a pipeline of battery storage opportunities. Araring Stage 1 is under construction. We've taken the investment decision on Mortlake. And in respect of Araring Stage 2 and Darling Downs and Templars West, we're well underway. And our target would be that there would be further investment decisions on those projects in the 2024 calendar year. And you can see there just the growth in the VPP that I talked about earlier. The team have done a good job to add over 300 and something megawatts in the last six months. And exactly why do we believe flexibility in this asset portfolio or this combination of portfolios provides us with both increasing value and growth over time is really highlighted as you turn to slide 11. What you can see there is the changing market increasingly makes flexible generation more valuable. Not only can you see the intraday volatility arising through the evening peaks as a result of solar during the day, but what you're also now seeing is just the higher frequency of negative prices that year on year continue to grow dramatically. And that value is actually indicated or represented by the average cap prices that you can see on the right-hand side, giving you an indication that the market's also valuing this more every day. So we do expect increased value opportunities for the combination of that peaking fleet, VPP, and the introduction of those battery projects, which is exciting for us to see. Turning to Octopus at a high level, you can just see the exceptional growth, not only in its retail business where it's now number one power and number two gas retailer by customer accounts, but also that you can see the exceptional growth of the Kraken software platform, which is now over halfway towards what was a very ambitious goal. I remember telling people that they had an ambition of going to 100 million accounts by 2027. We're now in 2024 and they're over 50 million. And what you now see is them expanding into new utilities with the water and broadband, and it now has a presence in 16 markets. Those two things have driven a rise in value and the way we've shown that here is based on the equity raisings by investors that they have introduced over time, but continue to be supported by existing investors. And that continues to drive the valuation with significant interest in the market for their services on the Kraken platform and the strong growth margins and customer growth. But they're also now growing increasingly into international retail and services and flexibility. Talked earlier about just the importance of gas. And I think this slide highlights two things, just the high quality resource that we have at APLNG of low cost reserves. And you can see that just the continual strengthening of that reserve base and the large contingent resources being converted over the last six years on that chart. And the team, I think, have established well a track record of continuing to improve, optimizing the network and creating value from the asset. And the combination of those two things you can see is delivering strong, robust cash flows, which are very valuable. Touched earlier on the fact that core to our purpose, but even more core to the communities and customers today is the support we provide them. It is really at the heart of what we need to do as Origin. And you can see there that we have done a number of specific things over the last six months. When you look at customers, we do support them every single day through our teams out there, but some of the specific things are is that none of our customers on our Power on Hardship program had any price increases at the last round in July 23. We'll spend up to $45 million providing support to customers of Hardship this year, which continues to grow year on year. And we have no origin customers paying above the regulated determined offerings, which is the VDO and Victoria and the DMO and other markets. We also continue to reach out specifically to community to provide assistance and customer support with billing and payment and queries, recognising that we need to engage with the community and customers in a variety of ways to make sure we can help them on this journey. In terms of our communities, our foundation contributed another $1.4 million in the half. We've kicked off our community initiatives in Ararang's Community Investment Fund in the first round. It's gone out for over 270,000. That's growing as we speak. And we are providing support for financial counsellors in terms of how they can also support the community as we go through some of the things we talked about with our customers. We do contribute a lot to community organisations, and we continue to focus on growing our spend both regionally and with our Indigenous suppliers, and we've done that again this year. So on that note, I will hand over to Laurie for the financial review and come back to you and talk operations after that.

Thanks, Frank, and good morning, everyone. Obviously, it's a privilege to be presenting to you for what will be the last time, but... but more importantly, perhaps a high quality and clean result. So as is typical, I'll start with a profit bridge on slide 16. Underlying profit increased 747 million with higher earnings from each of our businesses. The recovery of earnings in energy markets was a key driver, along with improved commodity hedging and LNG trading results in integrated gas. Our share of the octopus result was a net loss of 41 million compared to an 88 million loss in the corresponding half year. Tax on underlying earnings increased by 288 million, largely due to the stronger energy markets result. On slide 17, operating cash was a net outflow for the half year, reflecting both higher working capital and higher tax payments. Energy markets trade receivables were 260 million higher, mostly related just to the timing of receipts, but also an approximately 90 million increase due to slower mass market collections, partially associated with higher cost of living environment our customers are experiencing. A $60 million higher bad and doubtful debt expense has been recognised given this collection performance. Working capital has also increased due to timing impacts from green certificate purchases and traded LNG cargoes. Income tax payments of $447 million were $315 million higher than the corresponding half year due to the 2023 true-up tax payment, which included tax on higher APLNG unfranked dividends. Other payments include $77 million of transaction costs, mostly associated with the unsuccessful takeover process, and $55 million of Kraken stabilisation costs. Capital expenditure for the half year was higher than usual, with a larger proportion allocated to growth, including the eraring battery and early phase spend on renewable projects. Sustaining capital was also higher with major planned outages at the Araring and Mortlake power stations. We also completed two retail channel acquisitions in the period and the sale of the LPG Pacific business. Slide 18 shows distributions from APLNG in the current year are expected to be lower, consistent with lower effective oil prices. Origin received healthy distributions net of oil hedging of $657 million in the first half, and we expect between $1.2 and $1.4 billion for the full year. As foreshadowed, APLNG will fully utilise carried forward tax losses in the current financial year and is expected to commence paying company tax instalments. Distributions from APLNG later in this financial year are therefore expected to be partially franked. The cash tax burden will shift over time from Origin to APLNG. Moving next to our capital allocation framework on slide 19, Origin has entered a new phase of capital management with leverage low at a debt to EBITDA ratio of 0.9 times. We're now engaged in investing for growth, including construction underway on the Araring Battery, the recent FID on the Mortlake Battery, and the recent decision to increase our equity position, our Octopus Energy. These investments are expected to lift leverage back to the lower end of our target range. Our expectation is that renewable investments will largely be funded off balance sheet. Given our stronger balance sheet position, this is the right time to revisit our capital allocation framework and dividend policy. And we'll be doing so over the coming months with the intent to share this with investors at an investor briefing session expected in April or May. In the meantime, reflecting our lower leverage and confidence in the financial performance of the business, the board has determined a fully franked interim dividend of 27.5 cents per share, a substantial increase over last year's interim dividend of 16.5 cents. Energy markets half year earnings shown on slide 20 increased $813 million, reflecting an earnings rebound in the electricity business following a period of under recovery of wholesale costs. Slightly offsetting this, costs to serve were up $92 million. Electricity gross profit increased to $950 million from an unsustainable $39 million in the first half of the 2023 financial year. The recovery of higher wholesale costs from prior periods flowing into retail and business customer tariffs represented over $500 million of this increase. Lower generation fuel costs primarily due to the impact of the coal price cap contributed $245 million and lower spot purchase costs on a larger short position and lower contract procurement costs contributed a further $141 million. Gas gross profit increased by $10 million, with higher wholesale prices flowing into customer tariffs, largely offset by the non-repeat of JKM trading gains in the prior period and also lower volumes. Cost to serve increased, mostly reflecting higher bad and doubtful debts due to higher bill sizes, cost of living pressures, and additional compliance steps that have resulted in delayed disconnection of non-engaged and non-paying customers. On slide 21, origin share of Octopus underlying EBITDA was a $12 million loss, improved from a $83 million loss in the first half of 2023. In the first half of last year, there was a material under recovery of dramatically higher energy costs reflected in lagged UK retail tariffs. The non-repeat of this issue was the main driver of the improved results in the current half, along with growing customer numbers. These impacts were partially offset by higher bad and doubtful debt expense and rising renewable energy prices. The UK retail business is seasonal and we would expect higher earnings in the second half of the year. The Kraken licensed business is profitable and continuing to grow. Frank will later show the growth of the international retail and services businesses While growing rapidly, they're not yet profitable as they build scale, which explains the increased EBITDA loss half on half. Finally, it's worth noting the Octopus Group would have been profitable in the period, but for a couple of adjustments, including a non-repeatable prior year adjustment and a valuation adjustment to a short-term funding agreement with the UK government associated with the bulb acquisition. Turning now to integrated gas earnings on slide 22. Origin share of APLNG earnings were down 249 million with lower global oil and gas prices impacting both LNG and domestic gas revenues. Production was up 3% reflecting strong field performance, particularly from the successful reduction of the well work over backlog and effective well and gathering network optimisation. Stronger production enabled seven spot cargoes to be delivered in the period up from three in the first half of 2023. Operating costs were $89 million lower with lower royalties associated with lower prices, reduced gas purchases and lower downstream maintenance activity. Oil hedging resulted in a net gain of $9 million compared to a loss of $180 million in the 2023 half year. LNG trading activities generated a gain of 77 million benefiting from a favourable hedging locked in during the period of extreme disruption in global gas prices. We continue to expect substantial gains from LNG trading over the 25 and 26 financial years. Other origin only costs have reduced, particularly with the exit of our upstream exploration assets. And with that, I'll pass you back to Frank for our operational performance.

Okay, thanks very much, Laurie. Now commencing the operational review, and we'll start with energy markets. And I'm now turning to slide 25, which shows the trend of electricity forward prices and how this flows through to the regulated tariffs, or what you may know as the DMO and VDO. The higher prices, in this case, it's the New South Wales electricity forward price, so it'll be indicative of the DMO. The higher prices that occurred between April and December 2022 that you can see there on the chart have fed into the determination of the tariff for this year, the FY24 tariff shown by the dotted blue line, and has been a driver of the electricity margin recovery. Now, based on the forward prices over the last 12 months and that are continuing now, we're expecting the tariff for the next financial year in FY25 to moderate. And you can see that through the yellow solid and dotted lines on the chart. Turning to the right-hand side, the cost of coal for Araring has also reduced since those peaks in 2022. That has contributed to our margin recovery. The coal price cap that's in place until June this year, and at the same time, you can see the market price for coal has also reduced. And so what you can see going forward in the bottom point there is that the team over the last several months have now contracted or hedged about 70% of the expected coal volume requirement for the next financial year. And when you're referencing where we're buying that coal, it's at or about that 5,500 index, not the 6,000. As I mentioned earlier, the last point on our RRing is that there's ongoing engagement currently underway with the New South Wales government. Now, turning to gas on the next page, gas margin in origin, as I said, was a source of strength, and you continue to see that it's underpinned by a strong supply portfolio. That portfolio, to remind investors, is comprised of fixed supply contracts, transport flexibility, which, when we combine it with our gas peaking plants and large, diverse customer base, brings us together to have that strength in the market. And we have concluded, looking on the right-hand side here, we have concluded the beach price review and are pleased with the outcome. The half-year gross profit has moderated to be broadly in line with the periods before the second half of last financial year. The trading gains in that period have not repeated, and the JKM exposure that we've hedged in in this first half is at higher average prices than during that period. But you can sort of see the trend there as to where the margin per gigajoule is, and it's going back to what we've achieved over prior periods of view. if you look prior to that half to FY23. Now turning to retail. We have built a strong competitive advantage. When you look at, we've re-platformed the customers onto Kraken. It's now translating through the customer experience. We've got a leading brand. We've strengthened our channels to market. And we now have also a 10% uplift in customers engaging exclusively through digital channels. What we've also done is that we've acquired two retailer aggregator businesses in late 2023, One Bill and MyConnect. And these businesses are contributing both to customer growth and customer experience and also lowering our average cost to acquire. So the combination of these capabilities are bringing the competitive advantage that I just talked about to life. And if we turn to the next page, we've been delivering consistent, strong growth. We grew our customer accounts over the half by over 60,000, taking a value-based approach. That's a combination of us bringing all of those things together, products, pricing channels, and renewables. And you can see the improvement to the churn differential on the right-hand side. And one of the features of that is our approach to multi-product bundling, which continues to advance. And talking about a couple of the growth opportunities in energy markets, you can see the community energy services businesses has grown and so has our broadband customer accounts. And we're continuing to focus on growing those businesses. In the case of CES, it's a strong business with a good growth profile and low churn and very pleased to see we're continuing to maintain strong customer experience as we grow broadband scale and capability. Now turning to the next slide, slide 30, we are now in the benefit realisation phase. We have built a new retail operating model and it's underway and that benefit realisation is underway following the migration of the customers. On cost benefits, we're currently in a more challenging environment with cost of living pressures, additional compliance measures being implemented as we improve efficiency. And on the latter, you can see that we've made improvements with all the technology CapEx savings realized. We've reduced the retail workforce by 13%. Employee productivity benefits are on track. But in terms of delivering net benefits in the half 24, those have been offset by the growth initiatives, both in retail and across Xero, the hire bad and daffle debts and compliance activity. And we still do have additional resources as we extract the benefits and continue to improve the way we operate. We continue to pursue further improvements on cost reduction and extend our cost to serve advantage. However, it will take longer to mitigate those with the cost environment headwinds. Turning to the VPP on slide 31, it has continued to scale, and you can see there that we've grown it to 1.2 gigawatts. That's 366,000 connected services. And we are continuing to focus on the growth that'll come through uptake in solar batteries and EV, and also as we build the Spike customer base. And we also will continue new customer propositions, and we're very close to launching a number of those. What we've demonstrated on the right hand side is really to show you specifically in the example of our electric hot water heating profile and also an EV profile, just how that benefit can be realised by shifting load to times of low demand or high supply, whether that be overnight or where there's an abundance of solar energy. And we're applying and actively managing that to a bunch of customer cohorts now and continuing to refine. Our focus today has been on scale, connections, technical capability, and it's increasingly moving towards the customer propositions while we continue to scale. Very excited by what we've been able to achieve in that regard. Origin Zero has continued to grow. What you can see there, it's made good progress accelerating businesses, customers to net zero. The number of large businesses, customers on broader services has grown to 6% and we're securing long-term decarbonisation partnerships with key customers, including orchestration behind the meter asset solutions and co-investing in energy services projects. In the case of EVs, we now have more than 90 businesses signed up to EV fleet and subscription products, and we're driving the growth to now have more than 600 EVs on those products. So very pleased to see the building of the Origin Zero businesses as we work with large business customers on their journey to net zero and bring them all along on that, no matter where they are today in that regard. Turning to Octopus Energy, You can see it's just a fantastic brand and also core customer experience. It really is an energy business that has quite a key strength. And it does that while it maintains a cost to serve advantage. And it's also built that trust. And you can see that through some of the measures there. And it was evident really in 2023, probably most notably by the outstanding organic growth. If you looked at the pink on the right hand chart. And to grow 600,000 customers choosing to go to Octopus in that period is really a testament to just how well they are regarded by customers and performing that NPS differential. And at the same time, you can see the impact of the bulb and shell acquisitions on that scale by the purple acquisition bars on that right-hand chart. Slide 35 highlights really the impressive growth trajectory of Kraken. Now here we've highlighted Core, and you should think about Core being the platform that we've just implemented and the enterprise software we've just implemented at origin. And Kraken flexes their VPP offering to third-party customers and what they're increasingly utilizing in their own retail business. When it comes to the core Kraken, 19 million customer accounts added in the half. And you can also see that Kraken Flex has grown impressively. It now has six gigawatts of contractor capacity for what you would call large-scale assets. That's their Infralight Flex, and that includes up to 50% of the batteries on the UK grid that are bidding into the ancillary services markets. And when it gets to Smart Flex, it's really all about, I think, the EVs, heat pumps and home batteries being connected similar to what we're doing here in Australia. Now, Octopus is also scaling and investing in both international retail and services business. And this is the first time we've broken that out because that's where their investment is going. They have really rapidly grown in largest markets outside of UK, being Germany, France, and Japan that they've targeted. But they're clearly in a rapid growth phase for those markets. And thought we just would highlight the services business. They operate a renewable generation assets under management. It really is an asset management business. but this focus on growth in heat pumps, solar and EV charger sales, and they have an EV fleet that's grown to around 13 and a half thousand vehicles. They have their own heat pump technology. And as you know, there's a lot of support for heat pumps to displace the gas boiler in the UK market. And they're actively going after that. And you can see that growth rate there over the last 12 months or so. Turning to integrated gas, You can see there the sustained strong production. Production was up 3% in the equivalent period last year. It's been driven by well and field optimisation activities and reducing the work over backlog. And it was also supported by the operation of new infrastructure that's increased gas processing facilities flexibility. It was also very pleasing to see how the unplanned production turned down due to the LNG vessel power outage at Curtis Island in November was managed and just how well production recovered achieving a record production operating daily rate of 1,632 TJs a day in December, really supporting the resilience and sustainability of the strong production. which has us then looking at the revenue on slide 39, clearly all price, realised all prices down, $84 US compared to 109 in the equivalent period. The average domestic sale price that we get in the market stays well below the net back and continues to play an important role in the domestic market, does APL&G. The revenue has decreased on the back of those lower oil prices on the LNG export contracts. And in the half, we delivered seven spot cargoes, up from three, the equivalent half. You can see there that the cost per gigajoule on the right-hand side on that blue line has remained relatively steady compared to the previous financial year in the half. There has been increased activity, both work overs and operating well activity, but the strong field performance and that continued optimization of the network has just enabled us to defer the ramp up of the drilling program. And that highlights the strength of resource, but also the continuous improvement to get more value out and maintain that cost profile. And then the next slide on 40 just really does break down our continued focus and approach on how to deliver that, which is really on the short cycle, low cost supply initiatives. And so it really means working from the top to the bottom. It starts with optimizing existing wells where we've improved the well performance with the operation of artificial lift pumps and also reducing bottom hole pressures. And both of those are contributing. The well availability has improved from reducing the wet weather backlog and also the work over performance. The infrastructure de-bottlenecking through interconnected pipelines but also upgrading our spring gully water has enabled us to get more out of the existing fields and add to that flexibility I talked about. And with the focus on these, it has enabled well development deferral, which we continue to target. That really highlights the approach that the team and Integrated Gas are going after and yielding good results. APL&G, just turning to 41, it continues to play an important role supplying the gas to the domestic customers on the East Coast. And the domestic sales volume have remained consistent as a percentage of total sales. Now, the Australian government, you'll be all well aware of the gas market code and what's been undertaken in the gas industry. It's good to see regulatory certainty now under that code. They've granted APLNG a conditional ministerial exemption from the $12 price cap under the gas market code, and it is subject to conditions including a commitment to supply gas to the domestic market. It is good to see this clarity and certainty and APL&G has entered into sales agreements for an additional 9.6 petajoules to the domestic market in calendar year 2024 at the regulated price of $12. So that's a good development over the last six months for the gas business and industry. Now turning to Outlook. Now, all of our guidance is provided on the basis market conditions and regulatory environment do not materially change. Firstly, for energy markets, we've lifted the guidance to 1.6 to 1.8 billion. This excludes our octopus energy. And the improved guidance really reflects improvement to both electricity gross profit and gas gross profit. and is offset by higher cost to serve. So they're all contributing to the uplift and the overall performance of the business and pleased to be able to communicate that upgraded guidance. In the case of Origin's share of Octopus Energy EBITDA, it's expected to make a positive contribution of less than $100 million this year. There are improved earnings from the UK retail business. It is seasonal and it will be stronger in the second half. And there will be the ongoing contribution in the second half from the Kraken licensing business as it grows. It is partially offset by the not repeating of the recovery in margins from the lag in regulated tariffs reset that happened in the second half of last financial year. They are investing money into the international retail and energy services business and the full year impact of the bulb acquisition accounting adjustments and rising renewable energy prices will also have an impact. But it's a business growing rapidly and you can see the drivers of that growth are impressive. And in turning to FY25, energy markets EBITDA, consistent what we said previously to you, we do expect the EBITDA to be lower compared to this year. And it really is all about the reduction in the electricity gross profit as the regulated customer tariffs are expected to be lower in line with those wholesale costs that I showed on an earlier side. But we will expect also to have lower costs to serve. It does assume when we make that statement that current forward energy prices are maintained and also priced into the customer tariffs. Turning to the guidance of integrated gas, I think it's fair to say that we have maintained what we have previously communicated as guidance. Good to see that despite the events in November that we've maintained that production guidance of 680 to 710 petajoules. The unit capex and opex guidance continues to be $3.90 to $4.40 a gigajoule this financial year. And the drivers of that increase from the previous year are that weather-related catch-up of workovers and the higher not-operated development. But we are doing lower cyclical maintenance. And we provide the unit CAPEX and OPEX guidance for FY25 and 26, which is expected to be lower than this, at $3.60 to $4.10 a gigajoule. It will be following delivery of this optimisation in production, the cost-to-supply initiatives, completion of the cyclical maintenance program and expected lower power costs. And I just repeat what Laurie had said earlier, the cash distribution is expected to be 1.2 to 1.4 billion net of origin hedging from APLNG this financial year. You can see there the LNG trading guidance expect to make 60 to $90 million in 24 and that range for the combined years of 25 to 26 is 450 to $650 million. Thank you very much for your patience listening to this and we'll now hand over to the team and look forward to hearing all of your questions.