Slide 1: Financial results year ended 30 June 2018
financial results year ended 30 June 2018. 22 August 2018
Slide 2: 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). The information in this presentation does not contain all the information
Slide 3: Results overview and strategic highlights
results overview and strategic results overview and highlights strategic highlights Mick McCormack Managing Director and CEO. 3
Slide 4: FY2018 highlights
FY2018 highlights $ million FY2018 FY2017 change Statutory results Revenue excluding pass-through(1) 1,941.4 1,888.3 Up 2.8% EBITDA 1,518.5 1,470.1 Up 3.3% Net profit after tax 264.8 236.8 Up 11.8% Operating cash flow(2) 1,031.6 973.9 Up 5.9% Operating cash flow per security (cents)(3) 90.7 87.1 Up
Slide 5: Investing in Australia's energy future
investing in Australia’s energy future Solid results, further pipeline of opportunities announced to continue to deliver customer-centric energy solutions - Expanded network of integrated assets - Enhanced services offering flexibility and reliability Badgingarra Wind Farm Existing assets $1.4 billi
Slide 6: Record capex program – FY2017 to FY2019
record capex program – FY2017 to FY2019 • growing portfolio of committed projects Yamarna Gas Pipeline (Commissioned) Yamarna Power Station Reedy Creek Wallumbilla Pipeline - commissioned May 18 Emu Downs Solar Farm – commissioned Dec/Jan 18 Darling Downs Solar Farm Mt Morgans Gas Pipeline - commiss
Slide 7: Our business - doing deals with customers
our business - doing deals with customers Incitec Pivot – 3,300km Yamarna Gas Pipeline & Power Station • ~3,300 km from Mereenie Basin (NT) to Gibson • ~1,500km from Carnarvon Basin to Island (Qld) eastern Goldfields region • Utilising APA’s Amadeus Gas Pipeline, • Utilising APA’s Goldfields Gas Car
Slide 8: Focused on delivering industry best practice
focused on delivering industry best practice TRIFR(1) 15 Health and safety 10.41 • Continue to target a zero harm workplace 10 8.94 8.11 7.5 • Injury rates increased in FY18, especially with contractors 5 • 2nd year of a new 3-year HSE Strategic Improvement Plan - Focusing on safety leadership 0 FY1
Slide 9: Customer focus
customer focus The Energy Charter – industry initiative • APA is one of 15 energy businesses from across the Australian energy supply chain to develop The Energy Charter • Objective is to reconnect industry as a whole Clarity Flexibility Simplicity with its purpose and create collective accountabili
Slide 10: Financial results overview and performance
financial results overview andperformance strategic highlights Peter Fredricson Chief Financial Officer. 10
Slide 11: Summary results
summary results $ million FY2018 FY2017 Change APA made the following Revenue excluding contributions to the 1,941.4 1,888.3 2.8% pass-through(1) broader economy EBITDA 1,518.5 1,470.1 3.3% during FY2018: Depreciation and amortisation (578.9) (570.0) (1.6%) • $1,600 million EBIT 939.6 900.1 4.4% pai
Slide 12: FY2018 result: EBITDA by business segment
FY2018 result: EBITDA by business segment % of FY18 $ million FY2018 FY2017 Change EBITDA(1) FY2018 EBITDA Bridge Energy Infrastructure Queensland 962.2 925.4 4.0% 60.7% New South Wales 147.1 149.5 (1.6%) 9.3% Victoria & 127.2 125.3 1.5% 8.0% South Australia Northern Territory 22.9 18.8 22.1% 1.4% W
Slide 13: Low risk business model
low risk business model • APA has robust risk management processes in place • Manage counterparty risks by: Diversification of customer & industry exposure Assessment of counterparty creditworthiness Putting in place appropriate credit support arrangements Entering into long term contracts t
Slide 14: Capital expenditure and investment cash flows
capital expenditure and investment cash flows $ million FY18 FY17 Growth capex Acquisitions & other investment cash flows Regulated – Victoria 33.0 106.1 Growth capex SIB capex 1,600 A$ m Non-regulated 6,284.4 1,400 6,000 6, 6, East Coast 326.6 78.7 0 00 0 0 1,200 0 Western Australia & Northern Terr
Slide 15: Growth projects schedule
growth projects schedule Project (% spent) Pipeline projects Renewables projects Midstream projects Projects FY17 FY18 1H FY19 2H FY19 1H FY20 2H FY20 Customer Emu Downs Solar Farm 100% 13-year contract Synergy (incl. $5.5m ARENA funding) Reedy Creek Wallumbilla 100% 20-year contract APLNG Pipeline
Slide 16: Capital management
capital management APA’s parameters for capital management and distributions Capital management: • Retain our 2 credit ratings at Baa2/Stable (Moody’s) and BBB/Stable (S&P) to facilitate access to global debt capital markets • Maintain gearing(1)~65-68% • Fund growth with an appropriate mix of retai
Slide 17: Capital management
capital management • Credit ratings: S&P BBB (CreditWatch Positive, Aug 2018), Moody’s Baa2 (outlook Stable, affirmed Aug 2018) • Majority of interest cost obligations known today are hedged – 97.7% as at 30 June 2018 • APA completed ~$500 million capital raising by way of a PAITREO Entitlement Offe
Slide 18: Debt maturity profile
debt maturity profile APA maintains diversity of funding sources and spread of maturities(1) $1,600m Headroom (bank borrowings) $1,400m Bank borrowings $1,200m Sterling MTN Euro MTN $1,000m US 144A Notes $800m Canadian MTN $600m Australian MTN US Private Placement Notes $400m USD denominated obligat
Slide 19: Fully covered distributions
fully covered distributions • FY2018 distribution payout ratio(1) of 51.5% Franking Credits • Components for FY18 distribution: • $52 million tax payable for FY18 8.93 cents APT profit distribution • Franking credits of 3.83 cents per 9.03 cents APT capital distribution security allocated to the fin
Slide 20: FY19 guidance
FY19 guidance • Based on current operating plans and available information, EBITDA for FY2019 is expected to be in the range of $1,550 million to $1,575 million • Net interest costs for FY2019 expected within a range of $500 million to $510 million • In the event that the CKI proposal does not proce
Slide 21: Outlook
outlook results overview and strategic highlights Mick McCormack Managing Director and CEO. 21
Slide 22: Implementing energy policy changes
implementing energy policy changes APA supports Government initiatives to improve information transparency and increase market liquidity • Pricing principles East Coast and Central Region • Pipeline schematics disclosure on 31 Jan 2018 Information • Standard Gas Transportation Agreement Western
Slide 23: APA's strategy
APA’s strategy APA is committed to delivering to customers energy solutions East coast gas demand & production by field that are safe, reliable, innovative and cost-effective 2,500PJ Undeveloped Reserves Surat/Bowen 2P Developed • Our growth focus is to enhance our portfolio: 2,000PJ Gippsland 2P De
Slide 24: Implementation Agreement - APA and CKI Consortium
Implementation Agreement - APA and CKI Consortium • Conditional Implementation Agreement announced 13 August 2018 • A$11.00 per security cash offer and no change to FY18 final distribution (due 12 September 2018) • Compelling offer: – >30% premium (5 day, 1 month, 3 month VWAPs) – 15.3x FY2017 EV/EB
Slide 25: APA's uniquely integrated energy infrastructure
APA’s uniquely integrated energy infrastructure Assets and Investments Glossary AGPGLOS Amadeus Gas Pipeline BGP Bonaparte Gas Pipeline BWSF Badgingarra Wind and Solar Farm BWP Berwyndale Wallumbilla Pipeline CGP Carpentaria Gas Pipeline CRP Central Ranges Pipeline & distribution network CWP Central
Slide 26: Supplementary information
supplementary information 26
Slide 27: Snapshot of APA
snapshot of APA Australian gas transmission pipeline ownership by kilometres APA Overview (Ticker: APA AU) ~ APA is Australia’s largest gas pipeline owner ~ Market cap A$ 11.8 billion (as at 20 Aug 2018) Jemena 2,344 km ASX rank S&P/ASX 50 Credit rating Moody’s: Baa2 (outlook Stable) AGIG 3,622 km S
Slide 28: Group structure
group structure • 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 pass-through trust • Australian Pipeline Limited (ACN 091 344 704) is the responsible entity of APT and APT
Slide 29: Solid historical performance
solid historical performance Normalised EBITDA $1,200m Normalised operating cash flow $1,600m $1,518 $1,400m $1,470 $1,000m $1,032 $1,331 $974 $1,200m $862 $800m $1,000m $800m $600m $822 $747 $545 $600m $662 $400m $433 $440 $535 $490 $400m $336 $290 $200m $200m $0m $0m FY11 FY12 FY13 FY14 FY15 FY16
Slide 30: FY2018 operational summary – Energy Infrastructure
FY2018 operational summary – Energy Infrastructure Wallumbilla Gladstone Pipeline South West Queensland Pipeline Roma Brisbane Pipeline Reedy Creek Wallumbilla Pipeline Carpentaria Gas Pipeline Diamantina Power Station Other Qld assets Moomba Sydney Pipeline Victorian Transmission System SESA Pipeli
Slide 31: FY2018 operational summary – Asset Management, Energy Investments and Corporate costs
FY2018 operational summary – Asset Management, Energy Investments and Corporate costs Asset Management 70 A$ m Asset Management EBITDA • Connections continued to grow, as natural gas remains 60 One-off a fuel of choice for cooking in APA’s network areas Customer 50 • Customer contribution average in
Slide 32: Debt facilities
debt facilities Total committed debt facilities at 2 July 2018 $ million Facility Drawn Tenor amount amount 2015, 2016, 2017 & 2018 Bilateral 550 200 2 to 4.6 year facilities maturing between May 2019 to July 2022 bank facilities 2018 Syndicated bank facilities 1,000 - 5 and 5.5 year tranches maturi
Slide 33: Regulatory update
regulatory update • Approximately 9.0% of APA’s Energy Infrastructure revenue in FY18 was regulated revenue • APA’s major regulatory resets over the next few years are as follows: Note: *Asset will cease to be covered as of 1 July 2019 in accordance with the National Gas Law and Rules • Roma Brisban
Slide 34: 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 transmission and distribution networks and enforcing the National Gas Law and National Gas Rules in all jurisdictions except Western Australia • The E
Slide 35: www.apa.com.au
For further information contact: Jennifer Blake Group Head of Investor Relations Tel: +61 2 9693 0097 E-mail: jennifer.blake@apa.com.au Or visit the APA website at: www.apa.com.au 35