Apa Group · ASX:APA
Apa — H1 FY2015 Earnings Presentation
34 slides from Apa's earnings presentation, Feb 25, 2015
Slide 1: Financial Results Half year ended 31 December 2014
For personal use only Financial Results Half year ended 31 December 2014 25 February 2015
Slide 2: Results overview and strategic highlights
For personal use only Results overview and strategic highlights Mick McCormack Managing Director and CEO APA 1H 15 Results Presentation 2
Slide 3: Sound financial performance
Sound financial performance $ million 1H 15 1H 14 Change For personal use only Statutory results EBITDA 849.6 398.9 up 113%(4) Net profit after tax 467.3 120.7 up 287%(4) Operating cash flow (1) 280.4 208.3 up 35%(4) Operating cash flow per security (cents) 31.9 24.1 up 32%(4) Normalised results (2)
Slide 4: Connected infrastructure creating value and opportunity
Connected infrastructure creating value and opportunity For personal use only HY15 highlights Strengthening our capabilities in a dynamic market – Expanding, extending and enhancing our infrastructure SWQP and GGP expansions driving portfolio enhanced returns – Additional, smart capabilities in our
Slide 5: QCLNG – long term contract gives access to new volumes
QCLNG – long term contract gives access to new volumes For personal use only Acquisition complements APA’s existing East Coast grid – Long term contracts with two highly credit-worthy counterparties – Immediate access to new volumes and full revenue upon commissioning – Possibility of additional int
Slide 6: Developing growth capital projects across Australia
Developing growth capital projects across Australia Continued expansion and enhancement of APA’s gas infrastructure portfolio, with many growth For personal use only opportunities unique to APA Committed projects underwritten by long term revenue contracts and/or regulatory arrangements APA 1H 15 Re
Slide 7: East coast grid – connecting multiple markets with multiple resources
East coast grid – connecting multiple markets with multiple resources For personal use only Provision of flexibility during dynamic market conditions for gas – SWQP expansion already delivering – NSW – VIC connection expansion under way – Flexible services to move gas where it is needed on the east
Slide 8: Financial performance
For personal use only Financial performance Peter Fredricson Chief Financial Officer APA 1H 15 Results Presentation 8
Slide 9: Reconciliation – statutory and normalised results
Reconciliation – statutory and normalised results For personal use only $ million 1H 15 1H 14 Change Normalised Significant Statutory Normalised Significant Statutory Normalised items items Revenue excluding pass-through(1) 522.7 - 522.7 509.6 - 509.6 3 %(3) EBITDA – continuing businesses(2) 401.3 1
Slide 10: EBITDA by business segment
EBITDA by business segment For personal use only 1H 15 EBITDA by business segment(2) $ million 1H 15(1) 1H 14(1) Change Energy Infrastructure Asset Management Energy Investments 5.0% 1.9% Queensland 136.4 108.8 25% New South Wales 59.6 62.2 (4)% Victoria & South Australia 70.3 62.4 13% Western Austr
Slide 11: 1H EBITDA Bridge
1H 15 EBITDA Bridge For personal use only $48.4m $398.9m $369.2m $401.3m Energy Investments ($16.3m ) Asset ($29.7m) Management Energy 9% net growth Infrastructure from continuing businesses 1H 14 Less Envestra 1H 14 Organic growth Reduced Customer 1H 15 equity earnings continuing (incl. SWQP / GGP)
Slide 12: Energy Infrastructure – Queensland
Energy Infrastructure For personal use only Queensland EBITDA South West Queensland Pipeline $160 Expanded capacity $136.4m $140 Moomba compression South West Complete Sep 2014 and operational $120 Queensland Pipeline Wallumbilla compression $100 Other Long-term agreement for compression Queensland
Slide 13: Energy Infrastructure – New South Wales, Victoria & South Australia
Energy Infrastructure EBITDA $80m For personal use only New South Wales $59.6m $60m Three agreements to transport increased gas volumes north from Victoria, two commencing in Jan 2015 and one in May 2015 $40m Moomba Sydney New 7-year grid services agreement from Sep Pipeline $20m System 2015, mainly
Slide 14: Energy Infrastructure – Western Australia & Northern Territory
Energy Infrastructure For personal use only Western Australia & Northern Territory Goldfields Gas Pipeline EBITDA Expansion project completed $120m Amadeus Gas $107.2m Pipeline Pilbara Pipeline System $100m Emu Downs Full HY contribution of a new contract wind farm Additional revenue agreement Cost
Slide 15: Asset Management and Energy Investments
Asset Management and Energy Investments EBITDA For personal use only Asset Management $40m One-off customer Reduction in one-off customer contributions contributions for relocating APA infrastructure Contracted $20.1m services $30m One-off customer contributions $20m $20m Average ~$10m/a $10m $0m $0
Slide 16: Capital expenditure
Capital expenditure For personal use only $ million 1H15(1) 1H14(1) Growth capex Committed growth capex Regulated - Victoria 55.5 14.9 $400m Major Projects Queensland 78.5 93.6 $300m New South Wales 0.6 4.8 Western Australia 14.1 39.1 $200m Other 13.3 11.4 Total growth capex 162.0 163.8 $100m Stay i
Slide 17: Capital management
Capital management For personal use only Cash and committed undrawn facilities of around $2,400 million as at 31 December 2014 . Metrics 31 Dec 2014 30 Jun 2014 Gearing (1,2,3) 44.5% 64.2% Interest cover ratio 2.48 times 2.31 times Average interest rate applying to drawn debt (2) 7.07% 7.12% Interes
Slide 18: Funding – Illustrative @31 Jan 2015
Funding – Illustrative @31 Jan 2015 Post completion of funding of QCLNG Pipeline acquisition, APA expects: For personal use only – Gearing of around 65% – Maintain headroom of cash and available facilities of A$1bn+ Net debt profile A$ million Gearing Headroom profile A$ million Net debt @31 Jan 201
Slide 19: Capital management – debt maturity profile
Capital management For personal use only Maintain strong BBB/Baa2 investment grade ratings (re-affirmed in December 2014) Maintain funding flexibility – internal cash flows plus additional equity and/or debt A$1,200m Debt Maturity Profile (at 31 December 2014) A$1,000m $425m A$800m $265m A$600m $400
Slide 20: FY 2015 Guidance
FY 2015 Guidance For personal use only APA standalone (pre-acquisition) guidance for EBITDA and net interest cost for FY 2015 is revised as follows: – Statutory EBITDA is expected within a range of $1,222 million to $1,237 million(1) – Normalised continuing business EBITDA within a range of $775 mil
Slide 21: FY15 Guidance bridge - normalised
FY15 Guidance bridge - normalised For personal use only $41-83m $78-93m $(50m) $816-873m $747m Asset Management $697m FY14 Less Envestra FY14 continuing Organic growth Plus QCLNG FY15 Guidance equity earnings business EBITDA Pipeline Note: All conversions are based on AUD/USD exchange rate of 0.7804
Slide 22: Outlook
For personal use only Outlook Mick McCormack Managing Director and CEO APA 1H 15 Results Presentation 22
Slide 23: Connecting gas markets and resources
Connecting gas markets and resources Organic growth For personal use only – Capacity expansions, enhancements and new services, provide flexibility and new opportunities for customers – New services and more flexible contracts supplement traditional take-or-pay East coast LNG – QCLNG Pipeline acquis
Slide 24: Outlook for FY 2015
Outlook for FY 2015 Outlook For personal use only Continued construction and development to increase flexibility and capacity of our infrastructure footprint on both east and west coasts Transaction completion and integration of QCLNG Pipeline Continued Northern Territory – east coast interconnectio
Slide 25: Fully covered distributions
Fully covered distributions For personal use only On target to deliver distribution guidance for FY 2015 cents 1H 15 distribution payout 60 56.0 ratio(1,2) of 55.6% 51.9 52.6 52.5 52.6 48.2 Distribution components: 50 17.5 cents profit distribution 40 nil capital distribution 31.9 17.5 cents 35.0 35
Slide 26: Questions
For personal use only Questions APA 1H 15 Results Presentation 26
Slide 27: Supplementary information
For personal use only Supplementary information APA 1H 15 Results Presentation 27
Slide 28: Revenue by business segment
Revenue by business segment For personal use only $ million 1H 15 1H 14 Change 1Y 15 Revenue split Energy Infrastructure Other 1% Queensland 161.4 132.3 22% New South Wales 71.9 74.1 (3%) Victoria & South Australia Regulated 94.7 81.0 17% (revenue subject to price regulated tariffs) Western Australi
Slide 29: Balance sheet
Balance sheet For personal use only $ million 31 Dec 2014 30 Jun 2014 Change Current assets 1,114(1) 203 449 % Property, plant and equipment 5,677(1) 5,574 2% Other non-current assets 1,959(1) 2,195 (11) % Total Assets 8,750(1) 7,972 10 % Current debt 149(1) - - Other current liabilities 364(1) 374
Slide 30: Debt facilities
Debt facilities For personal use only Total committed debt facilities at 31 December 2014 Facility Drawn $million(1) amount(4) amount Tenor 2011 Bilateral borrowing 150 0 5 years maturing October 2016 2011 Bilateral borrowings (2) 400 0 5 years maturing December 2018 2014 Syndicated facilities (3) 1
Slide 31: Regulatory update
Regulatory update APA’s major price regulated assets For personal use only Regulatory resets over the next five years Goldfields Gas Pipeline Access Arrangement Review – Application lodged 15 August 2014 – Western Australian Economic Regulation Authority (“ERA”) has commenced its review, with a draf
Slide 32: APA asset and investment portfolio
APA asset and investment portfolio For personal use only APA 1H 15 Results Presentation 32
Slide 33: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) the responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) (APA Group). Summary information: This presentation contains su
Slide 34: For further information contact
For personal use only For further information contact Yoko Kosugi Delivering Australia’s energy Investor Relations, APA Group Tel: +61 2 9693 0049 E-mail: yoko.kosugi@apa.com.au or visit APA’s website www.apa.com.au