The newly-minted LNG exporter reported an underlying earnings before tax of $807 million, up 16% on the previous period thanks largely to its LNG sales, despite a 70% drop in the price of oil.

The loss comes despite an underlying after tax profit of $243 million, down from $346 million a year earlier, and was driven driven by $244 million of impairments on the company’s decision to write-off its investments in geothermal energy ($157 million), the deferral of large-scale IT projects ($65 million) and restructuring costs.

It follows an impairment for 2014-15 of $390 million.

Origin chairman Gordon Cairns said yesterday morning that the major Australian gas producer was working hard to build “further resilience” in the current low oil price environment, and strengthen its balance sheet.

“The first production and export of LNG by Australia Pacific LNG has also been a very important milestone in the development of the company,” Cairns said

“Given the long-term nature of this project we believe our investment in Australia Pacific LNG will be rewarding for shareholders, notwithstanding the current low oil price environment.”

Origin owns 37.5% of APLNG and operates the upstream component. ConocoPhillips operates the downstream plant and owns 37.5%, while major customer Sinopec also owns 25%.

Over the past six months capital management has seen the company reduce debt by $5.5 billion, and believes it can reduce that to below $9 billion in 2016-17.

Origin managing director Grant King said there was no reason for shareholders or lenders to be concerned that Origin will not be able to meet its remaining contributions to APLNG, with $6.8 billion in committed undrawn debt facilities and cash, something that has been the source of much speculation in recent weeks.

The company is trying to reduce Australia Pacific LNG’s breakeven costs by $3-5 per barrel and that, combined with a number of oil put options, are designed to help ensure that Origin can withstand lower oil prices for longer, King said.

A planned $1 billion reduction in Australia Pacific LNG’s upstream operating costs has been achieved six months ahead of schedule, the workforce has been reduced by some 1900 and Origin on target to deliver $200 million in functional cost savings from 2016-17, he said.

A further $690 million is expected to be raised from asset sales, with $110 achieved last week from the sale of the Mortlake Terminal Station, and asset sales in the Cooper and Perth basins are continuing with a number of expressions of interest received.

King said solar was a serious emerging business for the integrated energy company with sales growing by 42% last half-year, driven by growth in the small to medium enterprise segment and initiatives such as Solar-as-a-Service and Tesla’s battery offering.

A planned Darling Downs Solar Farm provides an opportunity for Origin to accelerate the transition to a greater contribution from renewable energy, he said.

The company’s integrated gas business reported underlying earnings before tax halving to $137 million and its exploration and production earnings decreased $94 million to $117 million due to a non-cash write-off of exploration expense of $53 million in Vietnam following a decision to withdraw

from all international exploration activity outside New Zealand, and a mix of lower prices and production.

Its earnings from LNG also dropped substantially, from $62 million to $20 million as low oil prices hit the value of its gas sales via APLNG and to BG Group.

King said the upstream portion of APLNG is now complete and the first five cargoes have been sent from Train 1, with Train 2 on track to start up before the end of the year.

King restated Origin’s full year guidance, with the underlying earnings before tax of $1.45-1.55 billion in 2015-16 and $1.9-2.1 billion in 2016-17 despite a reduction in its oil price assumptions to below $US50/bbl and a delay in the handover of Train 1 from Bechtel until mid-year.

The company has reduced its unfranked interim dividend to 10 cents per share, and has warned that if the low oil price hampers its ability to tackle debt, it may suspend its dividend payments before mid-year.