Origin Energy’s profits are surging as Australians struggle with energy costs.

Origin Energy, Australia's largest energy retailer, has reported a significant profit increase, sparking controversy as the cost-of-living crisis deepens across the country. 

The company announced a near one-third jump in full-year underlying profit, reaching $1.2 billion, with a dramatic 172 per cent surge in gross profit margins from its electricity arm. 

These figures were revealed shortly after AGL, another major energy provider, reported a 189 per cent rise in underlying profit to $812 million.

This financial success comes at a time when many Australians are grappling with soaring electricity bills. 

Consumer advocates have criticised these profit increases, accusing the energy giants of capitalising on the financial hardships faced by households. 

Brendan French, CEO of Energy Consumers Australia, says that these profits do not reflect a mere correction over time but rather an exploitation of a difficult period for many Australians. 

“There have been greater profits generated in this period coinciding with more and more people finding it very hard to live a comfortable life and pay for the energy they need,” French told reporters.

The timing of these profit announcements has also raised concerns about the effectiveness of the federal government's cost-of-living measures, particularly the $300 energy bill rebate introduced to ease the financial burden on households. 

French warned that these rebates might be rendered ineffective if they are absorbed by the rising profits of energy retailers and higher network costs.

The rising cost of energy is further highlighted by the growing number of Australians seeking assistance with their bills. 

Origin Energy recently disclosed to a Senate Select Committee on the Cost of Living that the number of customers enrolled in its hardship programs has nearly doubled over the past two years, from 58,000 in 2022 to 98,000 by June this year. 

This surge reflects the increasing strain on households, with many struggling to keep up with their energy payments.

In response to the criticism, Origin’s CEO, Frank Calabria, acknowledged the financial pressures on consumers, stating that the company is “acutely aware of the pressure on household budgets at this time given the rising cost of living”.

He noted that Origin has allocated $100 million over two years for supporting vulnerable customers.

However, the company’s financial reports also reveal a concerning rise in “bad and doubtful” debt provisions, attributed to larger bills and slower payment collections due to economic pressures.

Regulatory bodies and consumer advocates are watching. 

Earlier this year, former competition watchdog head Allan Fels criticised energy companies for creating confusing utility plans that deter consumers from making informed comparisons. 

The sector remains highly concentrated, with Origin, AGL, and Energy Australia dominating the market, drawing parallels to other industries like supermarkets, airlines, and banking where competition is similarly limited.

As the financial year progresses, many Australians are hoping to see the promised price cuts as lower wholesale costs are passed on.