Origin Energy (ORG) 2015 AGM Report

Company/ASX Code : Origin Energy Limited (ORG)
Venue :
10.30am Westin Hotel
1 Martin Place
Sydney, New South Wales
Monitor : Mr Geoffrey Orrock
AGM Details / NoM : Wednesday 21st October, 2015
# of Attendees : 140 shareholders plus staff and visitors
# Holdings represented by ASA : 753
Value of Proxies : $20 million
# Shares Represented by ASA : 3.65 million
Market Capitalisation : $8.5 billion

Origin puts house in order and announces it is first energy company to seriously address climate change

The Chairman commented upfront that he understood shareholder’s frustration and that no-one was happy with the Origin share price, this week at $5.36, less than half of what it was at the beginning of the last financial year. He said that the Board felt the company would be largely insulated from the oil price fall which was not expected to affect Origin until 2017, when both trains of APLNG would be in production. However, the share price had consistently declined with the fall in the price of oil, and the oil price was a reality the Board had needed to confront.

Mr Cairns told the meeting that a $6.9 billion suite of initiatives to strengthen the balance sheet and restore investor confidence included more rigorous allocation of capital and significant capital expenditure reductions in 2016 and 2017, a range of cost savings across the businesses, non-core asset sales to increase focus on the core businesses, Energy Markets and Integrated Gas, a $2.5 billion PAITREO capital raising, and a reduction in the dividend. All of these measures would contribute to cash preservation and debt reduction.

He said looking to the future the Integrated Gas business had delivered a world class facility in APLNG, which would be distribution breakeven at an oil price of US$38-42. The Energy markets business has leading positions in retail and power generation capacity and is committed to becoming a leading player in solar technology and a leader in distributed energy and storage.

Mr Cairns also announced that Origin has committed to all seven initiatives for companies addressing climate change under the We Mean Business Coalition. These initiatives include climate change reporting, responsible engagement on climate policy and adoption of science based reduction targets.

Prior to the meeting, the company had advised both executive directors had decided to forego equity incentive in 2015 and the relevant resolutions were withdrawn. The Chairman also advised that the resolution to re-elect Ms Karen Moses was withdrawn as Ms Moses had informed the company of an intention to retire in 2016.

Other directors were elected with support of 92% to 98%, the Against vote not too surprising given the shareholder outcome. The remuneration report suffered the same fate with support of only 86%.

The resolution to approve termination benefits received 95% support, including from ASA after we asked for more details and were told the Act is badly written. We were later invited to ask the regulator if the Corporations Act could be clarified. A resolution to alter the constitution regarding climate change reporting attracted only 6% support.

ASA voted in line with its voting intentions.

This company is monitored by Geoff Orrock and Kerrie Tarrant.