Apa Group · ASX:APA
Apa — H1 2009 Earnings Presentation
26 slides from Apa's earnings presentation, Feb 25, 2009
Slide 1: Financial Results Half year ended 31 December 2008
Financial Results Half year ended 31 December 2008 25 February 2009
Slide 2: Result overview and strategic highlights
Result overview and strategic highlights Mick McCormack Managing Director and CEO
Slide 3: Solid first half result
Solid first half result Continued strong underlying growth $ million 1H09 1H08 Change 1 Underlying revenue excluding pass-through 367.7 305.5 K 20% Underlying EBITDA 1 248.8 214.7 K 16% Underlying NPAT 1 56.7 44.7 K 27% Reported NPAT 18.0 35.9 L (50)% Underlying OCF 2 122.8 109.3 K 12% Underlying OC
Slide 4: Strategic and operational highlights
Strategic and operational highlights Completed the establishment of Energy Infrastructure Investments (EII) – Proceeds in excess of book value – Costs to create EII shown as one-off significant items – $647 million used to pay down debt – Strong equity partners – Marubeni Corporation and Osaka Gas
Slide 5: Financial performance
Financial performance Ross Gersbach Chief Financial Officer
Slide 6: Solid first half result
Solid first half result $ million 1H09 2 1H08 3 Change 1 Revenue 500.7 443.0 13.0% 1 Revenue excluding pass-through 367.7 305.5 20.4% 1 EBITDA 248.8 214.7 15.9% 1 EBIT 199.8 169.6 17.8% 1 Net interest expense (121.9) (110.4) (10.4)% 1 Tax (17.6) (13.2) (33.7)% 1 NPAT – underlying 56.7 44.7 26.7% Rep
Slide 7: Reconciling underlying result
Reconciling underlying result Reported Capital Comp. Significant Underlying 1 2 $ million result distributions assets items result Revenue 490.0 7.1 3.6 - 500.7 EBITDA 238.2 7.1 3.6 - 248.8 NPAT 18.0 7.1 - 31.6 56.7 Operating cash flow 114.1 - - 8.8 122.8 (1) Capital distributions – Envestra ($6.7 m
Slide 8: Significant items
Significant items $ million 1H09 Revaluation gain/(loss) - GasNet hedges (8.7) Establishment of Energy Infrastructure Investments after transaction costs (14.4) Settlement of acquisition related liabilities (1.5) Income tax effect (7.0) Total after tax cost (31.6) 1H08 Revaluation gain/(loss) - GasN
Slide 9: Segment performance
Segment performance $ million 1H09 1H08 Change Gas transmission and distribution Queensland 50.7 47.9 6% New South Wales 44.0 31.7 39% Victoria 50.5 35.1 44% South Australia 10.8 11.0 (2)% Western Australia 56.1 55.4 1% Northern Territory 1.9 1.2 60% Gas transmission and distribution - total 214.0 1
Slide 10: Operating cash flow
Operating cash flow $ million 1H09 1H08 Change Underlying operating cash flow (OCF) 122.8 109.3 12.3% 1 Distributions (net of DRP) 43.7 19.4 Available OCF 79.1 89.9 Underlying OCF per security (cents) 25.8 25.0 3.3% Distribution per security (cents) 15.0 14.5 3.4% Distribution payout ratio 60% 61% C
Slide 11: Major capital expenditure
Major capital expenditure $ million 1H09 1H08 Regulated Victoria Transmission System 8.0 42.1 Includes Brooklyn Lara Pipeline APA Gas Networks (Qld) 7.0 7.7 Includes southern network expansion (1H09) 15.0 49.8 Major Projects Queensland expansion 9.9 0.2 Davenport Downs New South Wales expansion 21.1
Slide 12: Continued distribution growth
Continued distribution growth 1H09 payout ratio 60% (on underlying OCF) 1H09 21.3% tax deferred component DRP continues at 2.5% discount On target to meet 5% growth guidance for 2009 full year distribution 1H09 Results Presentation Æ 12
Slide 13: Capital management
Capital management Strong balance sheet Cash and committed undrawn facilities of $710 million Improved gearing* of 69.7% - reduced from 72.0% at 30 June 2008 – Continue to target gearing in the range of 65-70% Equity raising totalled $57 million – Security Purchase Plan ($30.4m) – Distribution
Slide 14: Capital management
Capital management Secure long term debt portfolio Refinanced $150 million MTNs in August 2008 (plus additional $15 million debt facility) – Sub 100 bp average margin Refinancing requirement in 2009 to be repaid – March 2009 – MTN $300 million Interest rates – 80% fixed – Portfolio average int
Slide 15: Outlook
Outlook Mick McCormack Managing Director and CEO
Slide 16: Quality gas infrastructure portfolio
Quality gas infrastructure portfolio Delivering gas from all major gas production sources to all major gas markets – More than 50% of gas used in Australia is transported through APA’s pipelines Importance of APA infrastructure in the eastern states – Transporting more than 70% of gas in this re
Slide 17: Responding to uncertain times
Responding to uncertain times Global financial crisis – Inelastic gas demand – Quality businesses and assets consuming gas – Increasing borrowing costs ÆContinue to diversify earnings portfolio and actively monitor risk exposures Regulatory environment ─ WACC decision doesn’t apply to gas assets
Slide 18: Guidance and priorities
Guidance and priorities Guidance Underlying EBITDA guidance – $420-430 million for FY2009 – While APA will no longer earn EBITDA from the EII assets (other than through its 19.9% interest), APA will benefit from asset management fees and lower interest costs. Distribution guidance – growth targe
Slide 19: Supplementary information
Supplementary information APA Group
Slide 20: Financials: Key financial ratios
Financials Key financial ratios $ million 1H09 1H08 Comments Underlying operating cash flow (cps) 25.8 25.0 Weighted average securities on issue (m) 475.8 437.4 Payout ratio 59.8% 60.8% EPS (cps) underlying 11.9 10.2 including significant items 3.8 8.2 Interest cover ratio (times) 1.88 1.88 Gearing
Slide 21: Revenue analysis by business segment
Financials Revenue analysis by business segment $ million 1H09 1H08 Change Revenue Gas transmission and distribution Queensland 70.5 67.4 5% New South Wales 54.4 42.5 28% Victoria 66.0 47.5 39% South Australia 11.3 11.1 2% Western Australia 74.3 71.1 4% Northern Territory 11.1 9.8 13% Gas transmissi
Slide 22: Total committed debt facilities
Financials Total committed debt facilities Facility Facility amount Tenor Medium term notes $300 million March 2009 1 Bilateral borrowings $165 million July 2011 2003 US private placement $496 million 7, 10, 12 and 15 year tranches September 2010, 2013, 2015 and 2018 2 2007 Syndicated facility $1,80
Slide 23: APA Group business segments
APA Group business segments Gas Transmission and Electricity APA Asset Complementary Distribution Transmission Management Energy Assets Queensland: Interstate connectors: Envestra assets: Gas fired generation (Qld): - Roma Brisbane Pipeline - Murraylink (SA-Vic) - 19,100 km gas network - Daandine -
Slide 24: Regulatory update
Regulatory update Regulatory resets over the next five years The Carpentaria Gas Pipeline and Moomba Sydney Pipeline are now both Light Regulation pipelines. Murraylink and Directlink assets were sold to EII. The current regulatory revenue arrangements for these electricity transmission assets a
Slide 25: 1H09 Results Presentation Æ 25
1H09 Results Presentation Æ 25
Slide 26: 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