APA Group (APA) SNAPSHOT
Profile: APA Group (APA) is an energy infrastructure business. It primarily generates revenue through the ownership and operation of gas transmission pipelines across Australia. These pipelines include the Wallumbilla Gladstone Pipeline (WGP), South West QLD Pipeline and Moomba Sydney Pipeline. Its activities also include the provision of gas storage and processing services, gas fired and renewable energy generation, and infrastructure asset management.
History: APA listed on the ASX in 2000 when it had c.7,000km of transmission pipelines, during which time it transported c.25% of gas used in Australia, according to the company. Since then, APA has acquired and constructed various pipeline and energy infrastructure assets. In 2015, it finalised the acquisition of the Queensland Curtis LNG (QCLNG) pipeline, which has since been renamed the Wallumbilla Gladstone Pipeline. More recently, from FY17-19, APA has invested over $1.4bn in new assets, such as the Darling Downs Solar Farm in QLD.
Earnings composition: In FY19, the Energy Infrastructure segment reported Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of $1,572m (95%). The Asset Management segment generated $53m (3%) EBITDA, while Energy investments reported $28m (2%). Corporate costs totalled $80m.
Most recent result – FY19: EBITDA increased 3.6% on the prior corresponding period (pcp) to $1,574m. This was driven by the Energy Infrastructure EBITDA which increased 5% on the pcp to $1,572m. This increase was largely driven by new assets as well as contributions from price increases and positive exchange rate impacts. Within the Energy Infrastructure segment, Western Australia performed strongly with a 16.9% increase in EBITDA on the pcp to $279m and QLD, which represents 61% of FY19 EBITDA, increased 5% to $1,010m. Group NPAT increased 8.8% on the pcp to $288m. Operating cash flow per security (after interest and tax payments) decreased 5.4% to 86 cents. In FY19, total distributions were 47 cents per security, up from 45 cents in the pcp.
Company outlook: APA has provided FY20 EBITDA guidance of $1,660-$1,690m, net interest cost guidance of $505-515m and distribution guidance of c.50 cents. First gas delivery from the Orbost Gas Processing Plant is expected in Q4 CY19.
Important dates: AGM is scheduled for 24 October 2019. Investor day is scheduled for 21 November 2019. 1H20 ex-distribution date is 30 December 2019.
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