Apa Group · ASX:APA
Apa — 1H FY17 Earnings Presentation
33 slides from Apa's earnings presentation, Feb 22, 2017
Slide 1: ASX Announcement: Interim Results Presentation – clarification
Australian Pipeline Ltd ACN 091 344 704 | Australian Pipeline Trust ARSN 091 678 778 | APT Investment Trust ARSN 115 585 441 Level 19, 580 George Street Sydney NSW 2000 | PO Box R41 Royal Exchange NSW 1225 Phone +61 2 9693 0000 | Fax +61 2 9693 0093 APA Group | apa.com.au 22 February 2017 ASX ANNOUN
Slide 2: Financial results for half year ended 31 December 2016
financial results for half year ended 31 December 2016. For personal use only 22 February 2017
Slide 3: Disclaimer
disclaimer This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) as responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) (APA Group). For personal use only The information in this presentation does not conta
Slide 4: Results overview and strategic highlights
results overview and strategic highlights For personal use only Mick McCormack Managing Director and CEO. 3
Slide 5: 1H FY17 highlights
1H FY17 highlights $ million 1H FY17 1H FY16 change For personal use only Statutory results Revenue excluding pass-through(1) 954.3 812.5 Up 17.5% EBITDA 759.7 667.6 Up 13.8% Net profit after tax 139.8 99.5 Up 40.5% Operating cash flow(2) 518.2 462.1 Up 12.1% Operating cash flow per security (cents)
Slide 6: Results overview
results overview For personal use only • Solid results delivered through continued commitment to investment and innovation • Expanded network of integrated assets • Enhanced services offering flexibility and reliability • Increased capacity through removing bottlenecks East Coast Grid Western Austra
Slide 7: Evolution of the Moomba Sydney Pipeline
evolution of the Moomba Sydney Pipeline For personal use only Moomba Moomba TO Dec Sydney Sydney 2015 Pipeline Pipeline 2000 NOW point to point Moomba to • Integral part of East Coast Grid Sydney gas haulage • Bi-directional services • Foundation contract with AGL renewed with multi-asset, multi-ser
Slide 8: Delivering more for our customers through asset flexibility
delivering more for our customers through asset flexibility APA’s East Coast Grid has: For personal use only • Delivered increased throughput • Managed increased volatility Made possible by continued investment in: • East Coast Grid, in particular, removing bottlenecks • Integrated Operations Centre
Slide 9: Delivering more energy to more customers by removing bottlenecks
delivering more energy to more customers by removing bottlenecks Bi-directional projects Moomba Interconnect Victorian – Northern Interconnect For personal use only • Project completed progressively • Allows for more efficient • $240m+ total capex spend over 3+ years operation of APA’s East Coast •
Slide 10: Financial performance
financial performance Peter Fredricson For personal use only Chief Financial Officer 9
Slide 11: Summary results
summary results For personal use only $ million 1H FY17 1H FY16 Change Revenue excluding pass-through(1) 954.3 812.5 17.5% EBITDA 759.7 667.6 13.8% Depreciation and amortisation (282.0) (250.5) (12.6%) EBIT 477.7 417.1 14.5% Net interest expense (254.7) (253.3) (0.6%) Pre-tax profit 223.0 163.8 36.1
Slide 12: 1H FY17 result: EBITDA by business segment
1H FY17 result: EBITDA by business segment $ million 1H FY17 1H FY16 Change % of EBITDA(1) For personal use only Energy Infrastructure 1H FY17 EBITDA Bridge Queensland 460.9 426.7 8.0% 58.4% New South Wales 80.8 63.3 27.6% 10.2% Victoria & South Australia 79.4 69.8 13.8% 10.1% Northern Territory 10.
Slide 13: Low risk business model
low risk business model For personal use only • APA has solid risk management processes in place • Continue to manage counterparty risks by: Diversification of customers & industry exposures Assessment of counterparty creditworthiness Entering into long term contracts to support major capital
Slide 14: Capital expenditure and investment cash flows
capital expenditure and investment cash flows $ million 1H FY17 1H FY16 For personal use only Growth capex Regulated – Victoria 46.6 36.0 Non-regulated East Coast Grid 22.2 19.7 Western Australia 2.6 79.1 Other 27.7 14.0 Total growth capex 99.2 148.8 Stay-in business capex 27.0 24.7 Total capex 126.
Slide 15: Capital management
capital management For personal use only • Cash and committed undrawn facilities of around $970 million as at 31 December 2016 to meet the continued capital growth needs of the business • Credit ratings: S&P BBB (outlook Stable, confirmed Dec 2016), Moody’s Baa2 (outlook Stable, confirmed Aug 2016)
Slide 16: Debt maturity profile
debt maturity profile • APA maintains diversity of funding sources and spread of maturities For personal use only Note: (1) USPP notes of A$295m equivalent will mature in May 2017 (2) A$311.25m of bank facilities will mature in September 2017 (3) New 7 year AMTN ($200M @ 3.85% issued in October 2016
Slide 17: Fully covered distributions
fully covered distributions For personal use only • Distribution components: Franking Credits 4.67 cents APT franked profit distribution • APA cash tax payer - calendar 2017 4.92 cents APT unfranked profit distribution 5.47 cents APT capital distribution • Franking credits of 2.0 cents per 3.48 cent
Slide 18: FY17 guidance
FY17 guidance For personal use only • Based on current operating plans and available information, EBITDA for FY2017 is expected to be towards the upper end of the current range of $1,425 million to $1,445 million • Net interest costs for FY2017 expected within a range of $510 million to $520 million
Slide 19: Outlook
outlook Mick McCormack For personal use only Managing Director and CEO. 18
Slide 20: Industry overview
industry overview For personal use only • Gas is an essential fuel in Australia’s energy mix • Australia’s gas transmission sector is one of the most successful economic models which supports innovation and investment to meet customer demand • Australia’s energy system needs to undergo an overhaul i
Slide 21: APA's portfolio and strategy aligned with future energy needs
APA’s portfolio and strategy aligned with future energy needs Gas market dynamics East coast gas demand • Gas demand remains solid For personal use only • Ongoing need to develop new supply sources and connect them to the market • Focus needs to be on increasing supply, with enhancement of market-le
Slide 22: Executing on our growth strategy and opportunities
executing on our growth strategy and opportunities For personal use only APA’s investment Reedy Creek Emu Downs Western Slopes Badgingarra criteria Wallumbilla Pipeline Solar Farm Pipeline Wind Farm Project details • 50km, 300 TJ/day • 20MW solar farm • Preliminary • 130MW wind farm bi-directional E
Slide 23: APA's uniquely integrated energy assets
APA’s uniquely integrated energy assets For personal use only 22
Slide 24: Supplementary information
supplementary information For personal use only 23
Slide 25: Snapshot of APA
snapshot of APA Australian gas transmission pipeline ownership by kilometres APA Overview (Ticker: APA AU) For personal use only ~ APA is Australia’s largest gas pipeline owner ~ Market cap A$9.7 billion (as at 21 Feb 2017) ASX rank S&P/ASX 50 Credit rating Moody’s: Baa2 (outlook Stable) S&P: BBB (o
Slide 26: Group structure
group structure For personal use only • APA is a stapled structure comprising two registered managed investment schemes: Australian Pipeline Trust (ARSN 091 678 778) APT Investment Trust (ARSN 115 585 441) is a tax pass-through trust • Australian Pipeline Limited (ACN 091 344 704) is the respons
Slide 27: 1H FY17 operational summary – Energy Infrastructure
1H FY17 operational summary – Energy Infrastructure For personal use only East Coast + Northern Territory Western Australia • EBITDA increased by 11% • EBITDA from WA assets increased • Queensland assets performed as expected, increasing 8% overall. by 19% This included full period contribution from
Slide 28: 1H FY17 operational summary – Asset Management, Energy Investments and Corporate costs
1H FY17 operational summary – Asset Management, Energy Investments and Corporate costs For personal use only Asset Management Asset Management EBITDA • Connections continued to grow, however lower tariffs due to new SA access arrangement from July ‘16 • Customer contribution average remains ~$10m p.
Slide 29: Continued growth momentum
continued growth momentum Normalised EBITDA Normalised operating cash flow For personal use only Total assets Distributions 28
Slide 30: Debt facilities
debt facilities Total committed debt facilities at 31 December 2016 For personal use only $ million Facility Drawn Tenor amount amount 2015 & 2016 Bilateral bank facilities 550 25 2 to 5 year facilities maturing between May 2018 to May 2021 2.25, 3.25 and 5.25 year tranches maturing September 2017,
Slide 31: Regulatory update
regulatory update • Approximately 10% of APA’s Energy Infrastructure revenues in 1H FY17 was regulated revenue For personal use only • APA’s major regulatory resets over the next few years are as follows: • Roma Brisbane Pipeline access arrangement review APA lodged a proposed access arrangement f
Slide 32: Economic regulation of gas pipelines and networks
economic regulation of gas pipelines and networks Regulator • The Australian Energy Regulator (AER) is responsible for the economic regulation of gas For personal use only transmission and distribution networks and enforcing the National Gas Law and National Gas Rules in all jurisdictions except Wes
Slide 33: For further information contact
For personal use only For further information contact: Yoko Kosugi Head of Investor Relations Tel: +61 2 9693 0049 E-mail: yoko.kosugi@apa.com.au Or visit the APA website at: www.apa.com.au 32