News: Origin Energy suspends dividend as annual profit slumps

MELBOURNE, Aug 18 (Reuters) - Australia's Origin Energy suspended its final dividend as it scrambles to cut debt after weak oil prices and continued spending on the A$26 billion ($20 billion) Australia Pacific LNG project knocked its underlying annual profit.

Australia's top power and gas retailer, whose Australia Pacific liquefied natural gas project started producing just as oil and LNG prices have slumped, said on Thursday cutting debt to below A$9 billion was its top priority.

Underlying profit fell to A$365 million ($280 million) for the year to June 2016 from A$682 million a year earlier, in line with analysts' forecasts around A$370 million.

"While the Board will review each dividend decision in light of the prevailing circumstances, the Board's view is that suspension of the dividend is in the best overall interest of shareholders," Chairman Gordon Cairns said in a statement.

The second unit of two units at the 9 million tonnes a year APLNG project is on track to start producing in the December quarter, Origin said.

With both units operating, the company said it expects underlying earnings before interest, tax, depreciation and amortisation to rise by at least 45 percent to between A$2.37 billion and A$2.6 billion in the year to June 2017, roughly matching market forecasts.

Origin shares fell 1.7 percent in early trade in a flat overall market.

($1 = 1.3057 Australian dollars)