Origin Energy Limited (ORG) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I would like to extend a warm welcome to our shareholders here in Sydney, those joining us online and to all of my origin colleagues. My name is Scott Perkins, and I'm the Chair of Origin Energy Limited. It's my privilege to chair Origin's 27th Annual General Meeting. Before I formally declare the meeting open, I would like to acknowledge the Gadigal people of the Eora nation, the traditional custodians of this land and pay my respects to their elders past and present. I would also like to pay my respects to the traditional custodians of the various lands from which many are watching the webcast. I'd like to provide you with some important information regarding safety procedures we all need to follow in the unlikely event of an emergency. You will note the emergency exits in the ballroom. Should there be an emergency situation, await directions from the hotel staff. If you hear the evacuation tone, you should move to the nearest exit. For any medical matters, please contact any of the staff members available for assistance. Thank you. It's now 10:00 a.m. and as there is a quorum of shareholders present, I formally declare the meeting open. I'm pleased to welcome all shareholders and visitors here today. In addition to those present, the holders of approximately 1.2 billion shares or approximately 70.07% of the issued capital are here represented by proxy. I will take the notice committing the meeting is read. The minutes of the 2025 AGM have been signed, and copies are available on request from the company secretary. Please note that this meeting is being webcast live via the online platform, and a copy of its recording will also be available on our website after the meeting. Shareholders that are watching the webcast online will see a split screen with the instructions on how to ask questions online on the left and on the webcast on the right. Further instructions are detailed in your online platform user guide, which is available on our AGM website. If you have trouble using the online platform, please contact boardroom on the telephone number shown on the online platform screen. Before commencing formal proceedings, I would like to introduce the Board and members of senior management who are here today. From your left are the nonexecutive directors, Dr. Nora Scheinkestel, Mr. Dion Campbell, Ms. Fiona Hick, Mr. Greg Lalicker, Ms. Ilana Atlas; Mr. Frank Calabria, our CEO and Managing Director. On my left is Ms. Helen Hardy, our Company Secretary; and other nonexecutive directors, Dame Jones Withers; Mr. Stephen Mickelson and Mr. Mike McCormick. In front of the room are the other members of Origin's senior management: Jon Briskin, Kate Jordan, Tony Lucas, Chief Financial Officer; James McGill, Alita Nickel, Alicia Patel and Samantha Stevens, along with Andrew Thornton. Mr. Ryan Fiske of EY, the company's auditor, is also present. The order of business today will commence with my address, following which Frank will discuss our results and prospects for the coming year. Finally, we will consider the formal business and resolutions set out in the Notice of Meeting. Refreshments will be served at the end of the meeting, which will also give you an opportunity to meet with directors and management. I'll now move to my address to today's meeting. Today, we will reflect on Origin's performance over the last year and our progress in executing our strategy, whilst continuing to be guided by our purpose, getting energy right for our customers, communities and the planet. It has been another dynamic year in energy. Geopolitical uncertainty has caused significant shifts in global commodity markets, cost-of-living pressures have persisted for Australian households, and we have seen continued regulatory and technological change. Australia's energy transition advanced this year although not evenly. An acceleration in the uptake of home batteries and electric vehicles, complementing Australia's high penetration rates of rooftop solar was evidence of the continued momentum in the energy transition for residential customers. Significant new grid scale battery capacity helped to ease wholesale electricity prices putting downward pressure on bills for homes and for businesses. But the build-out of infrastructure that the transition depends on new renewables, firming and transmission, is proving difficult. Projects are taking longer. Costs have risen materially. Connection and approval processes remain complex and the medium-term regulatory picture is uncertain. We are seeing these challenges firsthand at our Yanco Delta wind farm development in New South Wales, where even with capacity investment scheme support, the economics remain very challenging. This challenge, the pace, cost and scale of the build-out the transition needs is about to become more acute. The rise of artificial intelligence and the data centers that underpin it is one of the most significant investment thematics of our time, a genuine economic opportunity for Australia and increasingly, a matter of national capability. But it is also a demand story for our sector. The latest forecast to illustrate data center demand is expected to grow steeply over the next decade, presenting a challenge but also a unique opportunity to help underpin new renewable projects. Building the infrastructure, our energy system needs was already a significant task before this new source of demand arrived. Now the task to build it fast enough and at sufficient scale is upon us. Households and businesses depend on reliable, affordable power, as do the new industries that will define Australia's economic future. We must be mindful that regional host communities are being asked to carry a disproportionate share of the burden of infrastructure build-out. And too often, the benefits they don't receive, they don't match what's being asked of them. Realizing the opportunities the energy transition and AI revolution represent for Australia should not come at the cost of ordinary households and small businesses. Sharing the benefits of growth properly, visibly and early and ensuring those who create new demand also bear its costs is the collective work of governments, regulators, networks and companies like ours. To this end, government policy will continue to shape the pace of this transition and how fairly its cost and benefits are shared. Origin's task is to navigate these challenges as they arise while continuing to build the assets, products and services our customers and the future energy system will need. I'll return to how we're doing on that shortly. Now turning to financial performance. Origin delivered a solid full year result with statutory profit of $1.574 billion up from $1.41 billion the prior year. Underlying profit was $1.159 billion compared to $1.49 billion in the prior year. Strong cash generation and a healthy balance sheet, allowed Origin to keep investing in the business and determine a fully franked final dividend of $0.30 per share, bringing total fully franked dividends for FY '26 to $0.60 a share, in line with FY '25 dividends. This reflects the Board's commitment to a stable shareholder returns while retaining balance sheet flexibility for growth. The team made good progress executing Origin's strategy and the portfolio is well positioned for a changing energy market. We bought significant new battery capacity into commercial operation, we progressed our Yanco Delta wind farm development and continue to grow our customer base through innovative new products and services. Australia Pacific LNG had another solid year contributing meaningfully to our free cash flow with $911 million of fully franked dividends. Our 22.7% economic interest in both Octopus Energy and Kraken Technologies, provides meaningful exposure to international growth. When our CEO, Frank Calabria, addresses you shortly, he will provide a more detailed review of Origin's FY '26 performance and the outlook for FY '27. Origin takes great pride in being Australia's largest energy retailer. We feel a sense of responsibility in providing an essential service that exists in every home and business and underpins our economy. We continue to focus on supporting our financially vulnerable customers. As cost of living pressures persisted for many Australians, our total support for customers in hardship grew to approximately $125 million over the past 3 years. More recently, our focus has been on supporting Origin customers affected by the recent data security incident involving unauthorized access to some of their information. Customers place enormous trust in Origin to protect their information, and we do not take that for granted. We have apologized to those customers who are affected whilst providing support and taken a number of steps to enhance the security of our systems to prevent future incidents of this kind. We've seen no evidence of the information being published on the Internet or the dark web to date. However, we note that this remains and affected customers will need to remain vigilant to any suspicious activity or scams. We continue to monitor this situation. Unfortunately, individuals and businesses no matter where they are around the world face a growing threat from this sort of criminally motivated cyber activity. The threat environment is constantly evolving, and we will have to work hard to continue to protect the security of our systems and our customers' information. We are committed to doing just that. I would also like to acknowledge the diligence and care for our customers, evident in management's response to this incident. More broadly, Origin plays its part in contributing to Australian communities from supporting many local initiatives around our assets and developments to our new sponsorship of the Australian Men's and Women's Cricket teams. Our philanthropic foundation, the Origin Foundation, contributed more than $3.7 million to community initiatives with a cumulative $49 million contributed since 2010, and more than 1/4 of our people volunteered their time to worthy courses. We continue to make progress against our 2030 emissions targets with total Scope 1, 2 and 3 equity emissions, down 2% from FY '25. Scope 1 equity emissions declined 7%. As we have said before, the path to our targets is not linear, and we will continue to take a prudent approach to achieving emissions reductions whilst balancing security, reliability and affordability of supply. I would also like to acknowledge the dedication and leadership of our CEO, Frank, and to his executive management team, along with the entire origin workforce. Our achievements this year would not have been possible without their care and commitment as they navigated considerable complexity while continuing to stay true to Origin's purpose and honoring the trust shareholders, customers and communities place in us. I also thank all my fellow directors for their contribution and their counsel. In conclusion, Origin is a great Australian business with the strategy, assets and capabilities to navigate this energy transition and to continue to deliver value to our customers, to Australia and to our shareholders in doing so. Thank you for your continued support. I now invite Chief Executive, Frank Calabria, to address the meeting.

Thank you, Scott. Good morning and a warm welcome to all our shareholders joining us today. It has been another strong year of progress for Origin growing our customer base, expanding our battery portfolio and providing secure and reliable electricity and gas for Australian households and businesses. Behind those results is a simple premise. Origin does well when our customers and communities do well. We work for them and with them in their homes, in their businesses, in the regions that host our assets and in the policy debates that will shape what they pay for energy for years to come. That is the lens I want to bring to this morning. And it is why I want to start with the challenges facing the sector before turning to our results. Energy underpins everything in our economy. The cost of living for every household, the competitiveness of every business and Australia's productivity. The reliability of energy today and its sustainability into the future is something everyone depends on. Few sectors carry that same weight and few are undergoing the scale of change that really energy is undergoing right now, at a time when Australian households and businesses are already under real cost pressure. The transition is now entering a harder phase. Significant progress is being led by customers, embracing rooftop solar, batteries and electric vehicles. Origin's data shows our customers who have electrified with solar, a battery and an EV are saving around $1,000 per annum on their total household energy costs, a significant saving. These customers may not yet represent the masses. However, they do reinforce the benefits the transition promises for customers are real. The path we're on is the right one. However, the next phase of the transition depends on large-scale infrastructure, transition lines, renewable projects, firming capacity, energy capacity storage and delivering that at scale and pace is now the binding constraint. Policy settings are absolutely crucial to deliver the significant investment needed and will ultimately determine whether or not this transition is reliable and affordable for customers. Origin is engaging constructively on several major policy reforms, which are now reaching decision points. These include the domestic gas reservation, the National Electricity Market review, including the proposed electricity supply entry mechanism, and reforms to environmental approvals under the Environment Protection and Biodiversity Conservation Act. There is also the emerging framework for data center energy use, now out for consultation. Each will shape investment in the energy system for the next decade and beyond. What these reforms need most is durability. Energy and climate policy is too often shifted with the political cycle and that uncertainty has a price. Investment gets deferred, projects stall and the cost of that delay ultimately lands on customers and on the broader economy. Bipartisan lasting agreement on the fundamentals across all levels of government is the outcome origin will keep advocating for. Now turning to Origin's 2026 financial year performance, which reflected the strength of our portfolio and focused progress against our strategy. A strong contribution from Energy Markets and disciplined cost management supported continued investment and shareholder returns even as Integrated Gas earnings moderated as expected on lower commodity prices. Energy Markets delivered underlying EBITDA of $1.701 billion, up from $1.404 billion in the 2025 financial year and towards the upper end of our guidance range with strong performance across electricity, natural gas, LPG and energy services. Origin brought significant new battery capacity into commercial operation with 1.3 gigawatts of large-scale batteries now operating as part of a 1.8 gigawatt development program. These assets will become increasingly important as variable renewable energy enters the system supporting reliable supply through the transition. Our Yanco Delta Wind Farm project also made progress towards a final investment decision. However, economics remain challenging even with support from the capacity investment scheme. More customers are choosing and staying with Origin with our customer base reaching 4.94 million accounts and churn almost 7% better than the market average. We continue to make it simpler for homeowners to manage their energy use with new app features, products and electrification options. More than 1/4 of origin customer homes now generate their own power through solar and the number with a home battery nearly doubled over the year. Customers electrifying are looking for a partner to help them get the most value out of their assets. And one way to do this is through joining our virtual power plant, Origin Loop, which grew to 409,000 connected services. As cost pressures persisted for Australian households, Origin also contributed $40 million in targeted assistance to those in financial hardship. Integrated Gas underlying EBITDA was $1.62 billion, down from $2.202 billion in the 2025 financial year, in line with our expectations of lower oil-linked earnings as Australia Pacific LNG and lower LNG trading gains. Australia Pacific LNG production continues to be 1 of the most largest and reliable sources of gas supply for Australia's East Coast market and delivered strong cash returns to Origin with fully franked dividends of $911 million, up from $797 million in FY '25. In FY '26, domestic gas prices remain significantly lower than international prices. Reliable and affordable gas supply will continue to be important for domestic customers, including manufacturers, and for firming electricity to keep the lights on through all weather supply and demand scenarios. Octopus Energy and Kraken Technologies continued to grow strongly following their separation into stand-alone businesses this year. Octopus Energy grew customer accounts by 2.2 million to 19 million accounts and was named Britain's most admired company in 2025. Kraken Technologies contracted customer accounts grew 28% to $95 million, approaching its 2027 target of 100 million accounts. In July, Kraken Technologies completed a USD 1 billion stand-alone equity raise at a valuation of USD 8.65 billion valuation in which Origin invested USD 140 million to maintain our interest. Combined, Origin's share of Octopus Energy and Kraken Technologies underlying EBITDA was a loss of $8 million, a significant improvement on the $88 million loss in FY '25 and reflecting the ongoing investment in growth. Looking ahead, our focus remains on the disciplined execution of our strategy. helping households and businesses get more value from their energy, including supporting them on their electrification journey and continuing to invest in our business. Today, I am pleased to reaffirm the FY '27 guidance provided at our full year results in August. Origin expects Energy Markets underlying EBITDA to be in a range of $1.55 billion to $1.85 billion, reflecting the ramp-up of our battery portfolio, offset by lower wholesale electricity prices. Australia Pacific LNG production in FY '27 is expected to be between 625 and 670 petajoules, reflecting natural field decline with increased drilling activity helping to partially offset that decline in future years. Octopus Energy is expected to continue to scale profitably in the U.K. with EBITDA per customer expected to be between GBP 25 and GBP 50. Origin expects continued growth in scaling customers in the non-U.K. retail markets and more moderate investment in Energy Services as it trends towards breakeven EBITDA. Kraken Technologies is expected to deliver revenue growth of more than 20% as it continues to bring new customer accounts onto its platform. Before I close, I want to acknowledge our people. Everything I've covered today for customers, communities and shareholders is possible, thanks to them. They're the ones on the phones, operating our assets and working behind the scenes to keep energy flowing reliably for Australia. I would also like to note our encouraging progress on safety this year with our total recordable injury frequency rate improving from 4.4% last year to 2.9%. Our engagement score also improved slightly to 7.5%. Origin strengths lie in our large and growing customer base. our diverse portfolio of assets and exposure to international growth through our investments in Octopus Energy and Kraken Technologies. We believe these strengths and continued discipline in executing our strategy position us well to keep delivering for the customers and communities we serve and create lasting value for our shareholders. Thank you for attending today and for your continued support of Origin.

Thank you, Frank. Ladies and gentlemen, I now turn to the formal business of today's meeting. It's my duty is chair to ensure that shareholders have a whole have a reasonable opportunity to ask questions about or comment on the management of the company, the remuneration report and other items of business before the meeting today. To achieve this, the following procedures for this meeting will be adopted. Please note that as this is a shareholders' meeting, only holders of Origin shares, their attorneys, proxies and authorized corporate representatives are entitled to vote and ask questions or make comments on the management and operations of the company. Shareholders watching the webcast via the online platform may also submit their questions online but will not be able to vote. If you are here as a proxy and have been instructed how to vote, I ask you to ensure that any vote you cast is in accordance with those instructions. You may also ask questions of the auditor on the conduct of the audit, the preparation and content of the auditor's report, accounting policies adopted by the company in relation to the preparation of financial statements, the policies adopted by Origin in relation to the preparation of the sustainability report or the independence of the auditor in relation to the conduct of the audit. If there are any questions of that nature raised today, Mr. Ryan Fiske of EY is available to answer them. I may also direct questions of a more detailed nature to the Chief Executive Officer, Frank Calabria; or the Chief Financial Officer, Tony Lucas, or any other fortunate member of management. However, in the first instance, all questions are to be addressed to me as Chair. I can confirm that the external auditor did not receive any written questions from shareholders prior to the meeting. You may either ask questions in the room today or by submitting written questions via the online platform. If you are attending in person and wish to speak today, please come to the microphone, identify yourself and state whether you are here as a shareholder or a proxyholder. There are microphones in each aisle, and I'll ask you to put your questions in turn. Please also defer any questions or comments on a specific resolution until that resolution is put to the meeting. If you are watching the webcast online and wish to ask a question to the online platform, click the messaging tab at the top of the screen. Select the resolution you would like your question to be put to, type your question into the text box and then select the send icon. You do not have to wait for the resolution to submit your questions online. I encourage you to submit them as soon as possible and we'll put them to the meeting at the relevant resolution. For those in the room, if you have questions relating to your personal dealings with Origin as a customer, I ask that you speak with the company's representative, April Ethridge after the meeting. Could April identify herself. Thank you very much, April. For those online, the moderators can take your details and arrange for a customer representative to contact you after the meeting. In order to allow a reasonable opportunity for all shareholders to ask questions, I will limit shareholders to no more than 2 questions or comments at a time. If you have more than 1 question or comment, please ask them together upfront, and I'll respond to both. I would like to stress that it's not in the interest of this meeting nor respectful of all the shareholders attending for questions to be repeated nor for individual shareholders to dominate proceedings with large numbers of questions. I would like to give all those shareholders wishing to ask a question, the opportunity to do so and therefore, won't permit repeated questioning on essentially the same matters. Finally, please ask your questions or raise your comments in a courteous and respectful way. I now move to the first item on Notice of Meeting being the financial report, sustainability report and the reports of the directors and auditor for the year ended 30 June 2026. These are now laid before the meeting for consideration. Please note this item of business does not require any shareholder vote. I now open the floor for discussion. Are there any questions or comments on these reports or the management of the company? Welcome back Natasha.

Natasha Lee, shareholder. Of course, I couldn't disappoint you. I had 3 meetings in a same time today, but I decided, hey, you guys want to see me. Anyway, thank you for your solid results. That's the Board and the management of staff of origin. The first question concerns I I suppose there's 2 parts to this. The first part relates to your AI voice agent, which you say services some 2.5 million customers. I take it that that's based on generative AI. And I was just wondering what the performance is because I haven't used your AI in any matter. But I know that in the past when you ring up and you get a -- when you ask a question, you say something is -- something completely different. So I was just wondering how effective that is in actually being able to answer and not having to and especially people with a foreign accent or disability of some sort, needing to go to, say, a voice, not a voice a human operator to clarify. The second part of the AI question relates to your general rollout is -- to what extent is generative -- I'm sorry, Gentech AI being applied throughout the company and how is that happening? The second question for now is the Victorian retail electricity market has shown a decrease, which was quite significant. What are the particular reasons for that decline?

Great. So thank you, Natasha, for those questions. So the AI question is, obviously, it's a vital one, it's very much front of our mind, and we'll also address your vectoring question as well. fact might ask Frank to address the Victorian one. So the first thing I'd say about AI and Origin is that Origin starts the AI journey with in a very sound position. And as much as the underpinnings of the location of our data the cleanliness of the data, the processes set behind it have been in place for quite some period of time, which has been the bedrock of our ability to build our VPP, which is effectively was in the early days, machine learning to orchestrate several hundred thousand devices to shift power throughout the day in order to optimize power usage. So we start with a high degree, I think, of machine learning and data analytics capability in origin. When it comes to AI deployment, we've been cautious, been careful to ensure that both from a data perspective, choice of partner, the right use cases for us to focus on, that they were deployed in a manner that would enable us to test and learn and ramp up over time. And that's exactly what we've done with our customer service agent that is now handling multiples of the original customer volumes and has been increased over time, and the feedback we're getting is very, very positive. You raised an interesting point on Accent. That was one of the early problems we had with different people of different age groups and different primary languages all had to be interpreted by the agent, but we've managed to fine-tune that and continue to increase performance. We're also seeing it help us with compliance as well because it might just be that a customer rings us and on particular -- fails to disclose a particular detail of their account. But while that detail might be quite important. And that detail might be in their records in terms of prior builds, prior conversations and AI enables us to flag any compliance or any, for example, with a life support customer or any other customers needing particular help or support, we're able to be almost doubly sure that we can identify that customer and treat at a customer in the appropriate way with the use of AI. So I think we're all in the reasonably early stages of AI, but we are methodically rolling it out where we are comfortable that there is a case -- real productivity case. It's always customer first. Are we trying to solve a customer problem and improving the customer experience. And I think you'll see it more pervasively employed in Australian communities but also at Origin for the benefit of our customers. Let me now turn to Victorian performance, Frank, you would mind.

So in terms of the Victorian market and probably the broader national electricity market on the East Coast, but most pronounced in Victoria, you've seen very benign conditions over the last year. You've seen high coal reliability and the introduction of batteries. So the introduction of batteries, as you know, is not -- it enables to manage on many day-to-day scenarios, the utilization of the power that's in the middle and the evening peak. The -- and high coal availability and those conditions, the combination of all of those has meant that the market has been very well supplied. That's been a phenomenon across the market. The reason you see it more pronounced in Victoria is the extent of brown coal plant that's running really baseload over the full day. So it's a very, very well supplied market and without any of those other events that might spike demand, if I could use that expression, what you're seeing is that, that's meant that overall wholesale prices have been lower. What we have seen over recent weeks just to highlight what can happen in the market, probably more so in New South Wales is that as people are anticipating a very hot summer, and there have been a risk events and higher temperatures, what we've seen is that's changed a little bit in the market over the last couple of weeks. But overall, that's the reason why Victoria is down quite a bit in wholesale prices.

Right. Just going back to you, Scott, what you said about AI that seemed to be primarily about generative AI and I can understand sort of the history and the progression like every company is moving with you say it's on a treadmill on the escalator on AI, specifically Agentic AI, how far is original on that journey? How do you plan to roll that out?

Yes. So interestingly, the Board at our last Board meeting spent some time down with the Melbourne Retail team, John's team, looking at how agents are actually being deployed already in order to smooth the customer journey, improve compliance. So I think we also expect a world where more customers will be deploying their own agents to help them choose the best plans and the best provider. So we're certainly entering a world and you'll have seen recent developments with news, with open AI and dots with Instinct. These are all new customer agents that are entering the market. And we have to be absolutely prepared for that with the right set of products, the right customer understanding, the right attributes that assure that Origin remains the preferred supplier in an agentic world.

Right. Okay. Yes, because the major productivity gains can be made through the correct application of IngenecAI, and it's important you -- it's important for every company to sort of get that right and apply.

I'd be disappointed, we don't see you again next year.

I'll try my best.

Any other questions on this Section of today's AGM. Sir, please?

Thank you. My name is William Prentis, and I'm a shareholder. So I've got just a couple of questions. I'll just ask 1 and someone's got something else to say that's fine. But I'm just wondering how you balance all the pressures on your cash flow, and that's between you could do it in future growth, you could reduce your debt or increase your dividends. And there's probably other things that I haven't thought of. I'm just wondering how you do that, how you balance that and whether -- with your dividends, is there any potential for growth in your dividends? And what sort of conditions would that require? So can I ask your second question?

Please.

The second question, a fairly simple question is that you've got some major investments in various things, and I guess you did feasibilities on them and you worked out sort of what sort of returns you expect, where those major investments that you are doing have deviated from the original base case scenarios. What do you do? Are you prepared to sell them? Are you prepared to step back and say, we're not putting any more money into these things. And I know there's some really major investments that you've got? And how do you assess what sort of return that you would accept from those?

Thank you. Two great questions. So in terms of the dividend payout, we would love to be able to be increasing our dividend over time. Clearly, that's a hallmark over the long haul of a company that's doing the right thing. We have a dividend payout policy that reflects the balance that you rightly pointed to. And when we consider our dividend policy and the absolute amount of that payout, it is going to be impacted by what returns we have for projects that require us to reinvest in the business as well as the year-to-year operating profits and cash flow we generate from operating the business. So we're always thinking about both things. how we can run origin better and how we can grow. And in recent years, you've seen quite significant CapEx funded from free cash flow, principally into acquisition of our shares in Octopus Energy, which have obviously been very significant from a value creation perspective. And also our battery program is part of 1.8 gigawatts being the size of the total program. And if you look at both of those, we absolutely expect those to earn risk-adjusted returns higher than the cost of capital that is intrinsic with a project of that risk. And so to the second part of your question, it's a very important part of the Board's role and the investment committee's role that Frank and the management team run to look back and examine the actual performance compared to business case of all of our major projects. So we call these PIRs, post-investment reviews. They regularly come to the Board on major projects so that we can actually see, well, this is why we thought was going to happen. This has happened. What can we learn from that? And how can we continue to refine and improve our investment decision-making. The final element of your question is, again, a good 1 and as much as there will be situations where certain assets or projects, and we've made recently a decision in respect of 1 wind project, not Yanco Delta, but another one, where actually, on the basis of current information and new information because things do change, especially in energy, as you're all intimately familiar with, it no longer makes sense to pursue the project or we may conclude there's a higher and better owner of the project. So we're constantly assessing these questions, how to grow, how to invest, holding ourselves to account in terms of the investments that we make and asking ourselves whether we are as Origin, the best and highest value owner of any part of our portfolio. Thank you for the question. Are there any other questions on this part of -- Natasha?

Yes. Natasha Lee again. Just a couple of quick ones. -- your integrated gas fugitive emissions showed an increase from 290 kilotons of CO2 equipment from EUR 246 million kilotons from last year. And I understand that there can be fluctuations. What was the particular reasons for that increase and I suppose the longer-term trajectory of that? And the second question, which is a bit of a hypothetical was the government's draft 20% reserve on gas, understanding that it is gas that it is a draft and you're probably still working through. But do you want to comment about the -- how you see the implications from what I understand is it should be less difficult for this company to manage apps than some of the others. But just some initial thoughts on that matter?

Yes. So I'll initially handle that in the future divisions question, but also invite you if you wanted to go into any deeper detail, [indiscernible] here at the front, Alicia, if you could just identify yourself would I'm sure be delighted to take you through in a bit more detail. There's nothing -- there's no significant incident. There's no change in operating procedures, which just sort of year in, year out, how the plant operated that led to that small increase of future emissions. This is an issue that comes to the Board and has dealt with at the Sustainability Committee principally as we examine what's the best technology of measuring future emissions, how our plant performs to global benchmarks what our CapEx program does in terms of effectively stopping wasted gas. So we've got a real incentive to make sure that future emissions are low in APLNG, which is the reason why if you ever get the chance to go to Curtis in and not that many people do, you go out there and you see one enormous decision that Origin made in contrast to the other plants on Curtis Island. We made a decision to adopt a pit-based flaring regime for necessary emissions. That is a cost us -- was a significantly higher CapEx item but results in much lower fugitive emissions from the -- and much lower disruptions to local communities. So we always are thinking about if we need to have huge emissions, how we manage them, the pit-based approach, better measurement and CapEx that over time will reduce it. Frank, I wonder whether you could comment on the latest on gas policy, which is a live matter.

Yes. And there could well be further announcements today or tomorrow in relation to the domestic gas reservation. So firstly, we won a very well functioning gas market. And I said earlier in my speech, we certainly want a gas price that's conducive to manufacturing and firming and electricity. And at the same time, we want that price to provide an incentive for investment in future gas production in Australia. So probably my main comments regarding the design of that scheme is that it's equitable amongst participants. It's fair to say that Astra Pacific LNG, the producer in our portfolio is producing quite a lot of gas and supplying a lot of gas to the domestic market and can meet that commitment. So we -- you're right to make the comment that we can meet that. What is important is that the design of the scheme and a couple of key features right now is it for sale? What is the level of oversupply in the market? And do we have confidence in that design? And that's what we've been advocating now to make sure that, that operates equitably across the market. And the design of that is quite important because it's currently set at a at an oversupplied market of around 10%. And so how that works in practice and is very important in terms of its efficacy and our support for it. So we've been advocating to make sure that operates well, but shareholders should be aware that APLNG is certainly a very significant supplier to the domestic market today and meets a commitment. There are no more questions in the room. I will now turn to the online questions.

Chair, we have a number of questions online on this item. The first question is from Fabian Conan Please, can we get some comments on the impending Victorian court class action?

Sorry, could you repeat the question?

Yes, he -- please can we get some comments on the impending Victorian Court class action?

Yes, as that is a matter of before the court, it would be entirely inappropriate for me to comment on it other than to say that we would be vigorously defending those claims.

Chair. The next question is from Stephen Mayne. The question is in 2 parts. The first part is Ernst & Young replaced as our auditor in 2019 and presumably has not faced a competitive tender during its first 6-year run. Given that U.K. law now mandates audit tenders every 10 years, will the Audit Committee Chair or Scott Perkins commit to running an audit tender before 2029. The second part, Chair, is also could EY signing partner, Ryan Fiske comment on how much of his origin energy time this year was spent auditing our first AASBS2, climate-related disclosures, sustainability report?