Origin Energy has followed through on its advice it could cut the dividend unless oil prices rebounded, putting the priority on debt reduction after posting a $589 million full-year loss.

Underlying profit before impairments for plunged 41 per cent in 2015-16 to $354 million, falling short of JPMorgan's estimate of $392 million and Citigroup's of $383 million.

Origin Energy chief executive Grant King has overseen a decline in profits as commodity price have sunk. Credit:Philip Gostelow

Chairman Gordon Cairns said that given the "important task" of debt reduction and the absence of any generation of franking credits, the board had decided not to pay any dividend for the second half.

"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," he said.