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Origin Energy (ASX:ORG) has been the victim of panicked sellers to the tune of nearly -5% on Monday intraday, as the company reports it will post up to a $100 million loss for FY25.
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That comes from its exposure to a retail electricity business in the U.K., Octopus Energy. But the reason why it’s posting a loss is the interesting part.
In short: It’s at least half because of climate change. Namely, the U.K. is reporting the third warmest April since 1884. You could also say the third hottest April, but then you’d be exposed to technicality arguments about whether or not the U.K. is hot.
At any rate, a warming planet isn’t good news for Origin, at least not when things are meant to be cold. Octopus is losing the company up to $100M because homes in the U.K. have required less heating, given higher temperatures.
(To be fair: The company said around $50M of its loss was due to reduced heating demand; the company also pointed towards “continued investment” and “non-U.K. retail markets,” despite Octopus being in the U.K.)
At any rate, looking at the climate change angle, it’s not like the weather and energy markets aren’t already locked in a forever tango.
Ahead of hurricane season in the Gulf of Mexico (or Gulf of America, apparently), U.S. natural gas prices often rise, given that production in the GOM/GOA is where the hurricane likes to sit.
Forecasts for hotter-than-expected winters in America and elsewhere often impact futures prices; the reverse is also true. Agriculture is not the only industry that bows before the radar. At least sometimes.
But clearly, a loss of up to $100M was too much for some Origin investors on Monday. It’s helped to tank the entire Utilities sector.
ORG last traded at $10.52/sh.
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