Australian power company Origin Energy has upgraded its 2023 financial year energy markets earnings due to a “stronger than expected” contribution from Octopus Energy.
As a result, Origin now expects its Energy Markets Underlying EBITDA to be between £509 million (A$950 million) and £644 million (A$1,200 million), up from its previously forecasted £322 million (A$600 million) to £391 million (A$730 million) range. Origin has owned a 20% stake in Octopus Energy since May 2020.
The statement read: “The increase in expected earnings is mainly driven by a stronger than expected contribution from Octopus Energy in the UK and an improvement in the underlying performance of the energy markets business.”
In 2022, Octopus Energy Group saw its revenues grow to £4.2 billion from £2.0 billion, a 110% increase year-on-year, which had been achieved against challenging conditions in the retail energy market.
One of the primary reasons for Origin’s reevaluated financial earnings is due to the stabilisation of the UK energy market in contrast to the first half of the year. As a result, Octopus had seen a “rapid” return to normal trading conditions and now is scaling both its renewable and technological arms to bolster the company’s expertise.
Octopus additionally grew in size and became the “second largest energy retailer in the UK by customer accounts”, primarily due to the acquisition of failed energy supplier Bulb, which entered special administration in late 2021 following its collapse.
The company successfully acquired the services of Bulb in December 2022 marking a successful bid to integrate Bulb’s services into its own offering which currently consists of 1.5 million customers.
One of the key arms of Octopus to see significant growth over 2022 was Kraken Technologies, which saw its revenue grow to £115 million from £69 million, a 66% jump year-on-year. Driving this, its operating profit increased by 10% to £40 million.
Over 2022, the company migrated 7.4 million energy accounts onto its platform, including licenses from E.ON, where it is serving over 16 million accounts as of the end of 2022.
This is up 26% compared to the number of migrations the previous year, and saw 370,000 customers migrated per week at peak times during E.ON migration.
Like the company’s retail arm, Kraken has also expanded internationally to nine countries, as well as working through incorporated subsidiaries in Turkey and Japan. To service this expansion, the number of UK employees within Kraken increased by 72% from 111 to 192.