Apa Group · ASX:APA
Apa — Craigs Investor Day 2009
23 slides from Apa's conference presentation, Sep 24, 2009
Slide 1: APA Group – delivering security and growth
APA Group – delivering security and growth Peter Fredricson, Chief Financial Officer Craigs Investor Day 2009, Auckland 24 September, 2009
Slide 2: About APA Group
About APA Group APA is Australia’s largest gas transmission and distribution infrastructure owner and operator – Gas transmission and distribution: gas pipelines and storage facilities; gas distribution networks in Qld and NSW – Asset Management: asset management, operating and maintenance service
Slide 3: APA's gas infrastructure portfolio
APA’s gas infrastructure portfolio Australia has an abundance of natural gas reserves – 60,300 PJ of 2P reserves, with half (29,700 PJ) in eastern Australia Increasing demand for natural gas APA delivers gas from all major gas production sources to all major gas markets – More than 50% of natu
Slide 4: APA's strengths
APA’s strengths Unrivalled gas asset footprint – largest gas transporter of natural gas across Australia by pipeline length, capacity and volume Integrated portfolio of gas pipeline assets – providing revenue and operating synergies Attractive growth opportunities – enhancing capacity in APA’s
Slide 5: APA's strategy
APA’s strategy Maximise value for securityholders Focusing on gas infrastructure assets in Australia’s growing gas market and enhancing APA’s portfolio of assets Capturing revenue and operational synergies from APA’s significant asset base Pursuing opportunities that leverage APA’s knowledge a
Slide 6: Record full year result
Record full year result (1) Underlying result 2009 (2) 2008 (3) Change $ million $ million Revenue 958.8 897.8 6.8% Revenue excluding pass‐through 687.4 614.9 11.8% EBITDA 458.7 430.5 6.5% EBIT 359.1 330.8 8.6% Net interest expense (213.0) (223.8) 4.8% Tax (35.9) (24.8) (45.0)% Underlying NPAT 110.1
Slide 7: FY 2009 strategic and operational highlights
FY 2009 strategic and operational highlights Strong balance sheet Completed the establishment of Energy Infrastructure Investments – Achieved book value and reduced debt – Additional avenue for investments Completed 2010 debt refinancing – Raised $1.365 billion – Syndicated facility, USPP, bilat
Slide 8: FY 2009 strategic and operational highlights
FY 2009 strategic and operational highlights Business growth Capacity expansion of gas transmission pipelines – Goldfields Gas Pipeline, Carpentaria Gas Pipeline, Moomba Sydney Pipeline Attractive investments – Central Ranges Pipeline – part of APA’s New South Wales pipeline system – Increase in
Slide 9: Consistent and predictable performance
Consistent and predictable performance Underlying operating cash flow Underlying EBITDA 250 $234 m 500 $459 m 200 400 $ million $ million 150 300 100 200 50 100 0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2001 2002 2003 2004 2005 2006 2007 2008 2009 Operating cash flow per security Distribution
Slide 10: Growing distributions
Growing distributions Achieved 5% growth guidance for 2009 full year distribution cents per security 31.0 FY09 payout ratio 66% (on 29.5 underlying OCF) 28.0 3.5 5.5 14.2 FY09 45.8% tax deferred 24.0 component 22.5 DRP continues at 2.5% discount 24.5 24.0 16.8 Tax deferred distribution Income
Slide 11: Strong segment performance
Strong segment performance Strong EBITDA growth in gas transmission and distribution 120 EBITDA split by segment Energy Assets sold to 100 investments EII Asset management 2008 5% 5% 7% 2009 80 Gas transmission $ million 60 and distribution 83% 40 EBITDA growth 20 Gas transmission and distribution
Slide 12: Prudent capital management
Prudent capital management FY2009 metrics – Improved gearing(1) of 70.3%, reduced from 72.0% at 30 June 2008 – Interest Cover Ratio of 2.13x, increased from 1.86x in 2008 Equity raised – $79 million (Security Purchase Plan and Distribution Reinvestment Plan) Credit rating – S&P ‘BBB’ stable ou
Slide 13: Stable and secure revenue
Stable and secure revenue More than 90% of APA’s revenues are derived from price regulated (natural monopoly) assets and long‐term contracts Tariffs are set by regulation for price regulated assets, but existing contract terms remain Tariffs commercially negotiated for all other pipelines and
Slide 14: Increased demand for natural gas
Increased demand for natural gas Natural gas and Australian primary energy consumption Growth rates It is estimated that Australia’s underlying 7.0% gas demand will grow an average of 4%* 6.0% annually over the next 10 years. Key growth Natural gas Total 5.0% drivers include: 4.0% – Greater use of
Slide 15: Pipeline capacity for power generation
Pipeline capacity for power generation APA primarily sells pipeline capacity – Gas fired power generation requires pipeline capacity and gas throughput: Baseload generation – capacity and gas volumes throughout the year Peak/intermediate generation – capacity and storage required throughout th
Slide 16: Discretionary capital expenditure
Discretionary capital expenditure APA has a low level of stay‐in‐business capex which is required annually – up to $20 million per annum – Bulk of the assets are underground and require a minimal level of maintenance capex – APA controls the timing of non‐critical capex APA maintains flexibility
Slide 17: Development and growth opportunities
Development and growth opportunities Northern expansion on the Victorian Transmission System Increase Moomba Sydney Pipeline winter capacity in line with contracts Installation of automated multi‐directional hub at Young, providing flow and storage flexibility Increased capacity for gas fire
Slide 18: Summary
Summary Strong FY2009 results demonstrate strength of APA’s business APA continues to deliver value to its securityholders through growth in distributions and operating cash flow – at least 5% growth in distributions for FY2010 Quality portfolio of gas infrastructure assets throughout Australi
Slide 19: Supplementary information
Supplementary information 19
Slide 20: APA's gas infrastructure business
APA’s gas infrastructure business 20
Slide 21: APA business segments
APA business segments FY2009 EBITDA % 1 Australia’s largest gas pipeline owner, present in each mainland state and territory APA manages and operates all its major gas transmission and distribution assets 83% Gas transmission pipelines: – Approximately10,000 km of high pressure gas transmissio
Slide 22: Disclaimer
Disclaimer The information contained in this presentation is given without any liability whatsoever to Australian Pipeline Trust or APT Investment Trust or any of its related entities (collectively “APA Group”) or their respective directors or officers, and is not intended to constitute legal, tax o
Slide 23: Delivering Australia's energy
Delivering Australia’s energy For further information visit APA’s website www.apa.com.au 23