Apa Group · ASX:APA
Apa — H1 FY2020 Earnings Presentation
31 slides from Apa's earnings presentation, Feb 18, 2020
Slide 1: Financial results for half year ended 31 December 2019
financial results for half year ended 31 December 2019. 18 February 2020
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
results overview. Rob Wheals stay connected. CEO and Managing Director 2019 full year employee update.
Slide 4: Financial highlights - solid results
financial highlights - solid results $ million 1H FY20 1H FY19 change Revenue excluding pass-through(1) 1,077.8 1,012.9 Up 6.4% EBITDA 842.2 787.7 Up 6.9% Net profit after tax 175.0 157.4 Up 11.2% Operating cash flow(2) 511.9 470.2 Up 8.9% Operating cash flow per security (cents) 43.4 39.8 Up 9.8% D
Slide 5: Highlights
highlights Operations Growth Customers 99.9% reliability $38.3m EBITDA APA Customer Promise gas nomination delivery from new assets launched 8.4/10 Networks $68.5m $145.1m SIB & IT technology capex growth capex 7/10 Transmission Customer Satisfaction scores 3 new assets 1ST Energy Charter Community
Slide 6: Orbost Gas Processing Facility
Orbost Gas Processing Facility 11 February 2020 • Commissioning delayed due to construction delays, with further delays due to local bush fire threat & air quality issues from smoke • Successfully commissioned gas-fired power generation on site & safely introduced sales gas into the plant • Raw gas
Slide 7: Safety & environment
safety & environment • TRIFR safety metric 7.37 (FY2020 target 5.5) & LTIFR safety metric 0.6 (FY2020 target 1.0) Injuries are less severe but still too many, particularly for contractors Contractor management ongoing priority & focus • New three year HSE Strategic Plan developed and being rolle
Slide 8: Priorities for FY2020 - update
priorities for FY2020 - update complete review of APA’s purpose, vision and culture implement new organisational model to support strategy execution In progress: • progress APA’s growth strategy, both organic in Australia, and possible US acquisition • continued focus on operational and safety e
Slide 9: Financial performance
financial performance. Peter Fredricson stay connected. Chief Financial Officer 2019 full year employee update.
Slide 10: Summary results
summary results $ million 1H FY20 1H FY19 Change Revenue excluding pass-through(1) 1077.8 1,012.9 6.4% EBITDA 842.2 787.7 6.9% Depreciation and amortisation (319.4) (297.6) 7.3% EBIT 522.8 490.0 6.7% Net interest expense (245.3) (239.6) 2.4% Pre-tax profit 277.5 250.5 10.8% Tax (102.4) (93.1) 10.0%
Slide 11: 1H FY2020 result: EBITDA by business segment
1H FY2020 result: EBITDA by business segment $ million 1H FY20 1H FY19 Change Energy Infrastructure Queensland 506.3 511.6 (1.0%) New South Wales 81.6 75.4 8.1% Victoria & South Australia 63.5 68.8 (7.7%) Northern Territory 8.6 10.8 (21.0%) Western Australia 171.1 122.7 39.4% Energy Infra total 830.
Slide 12: 1H FY2020 EBITDA bridge
1H FY2020 EBITDA bridge Energy Infra structure 12
Slide 13: Low risk business model
low risk business model • Solid risk management processes in place • Continue to manage counterparty risks by: Diversification of customers and industry exposures Assessment of counterparty creditworthiness Entering into long term contracts to support major capital spend • Revenue weighted ave
Slide 14: Capital expenditure
capital expenditure $ million 1H FY20 1H FY19 Growth capex projects: Growth capex Orbost Gas Processing Plant in Vic Regulated – Victoria 28.4 14.0 Moomba Sydney Pipeline capacity Non-regulated expansion, providing additional capacity of ~20 TJ/day to Sydney/Melbourne East Coast Grid 98.8 104.3
Slide 15: Capital management
capital management • Cash and committed undrawn facilities of around $1,354 million as at 31 December 2019 to meet the continuing needs of the business • Credit ratings: S&P BBB (outlook Stable, confirmed Dec 2019) Moody’s Baa2 (outlook Stable, confirmed Dec 2019) • Key capital ratios are as follows
Slide 16: Debt maturity profile
debt maturity profile APA maintains diversity of funding sources and spread of maturities(1) Notes: (1) APA debt maturity profile as at 31 December 2019. (2) USD denominated obligations translated to AUD at the prevailing rate at inception (USD144A - AUD/USD=0.7879, Euro and Sterling - AUD/USD=0.777
Slide 17: Fully covered distributions
fully covered distributions • Distribution payout ratio(1) of 53.0% • Distribution components: • $71.8 million tax paid for FY19 8.52 cents APT franked profit distribution (FY2018: $52.0 million) 2.93 cents APT unfranked profit distribution • FY19 effective cash tax rate of 15.5%, 6.66 cents APT cap
Slide 18: FY2020 guidance
FY2020 guidance • Based on current operating plans and available information, APA reaffirms its guidance that EBITDA for FY2020 is expected to be within the range of $1,660 million to $1,690 million • Net interest expense for FY2020 expected to settle towards the lower end of the $505 million to $51
Slide 19: Outlook
outlook. Rob Wheals stay connected. CEO and Managing Director 2019 full year employee update.
Slide 20: Energy outlook
energy outlook Global energy demand expected to continue steady growth in most scenarios – IEA Gas remains a key part of the energy mix Global East Coast Australia – Gas supply & demand Contingent and Prospectives 2,500PJ 2P Undeveloped 2P Developed 2,000PJ AEMO gas demand forecast 1,500PJ 1,000PJ 5
Slide 21: Growth opportunities
growth opportunities EAST WEST ENERGY FUTURE NORTH AMERICA “supply” “demand” “lower carbon” “core business” - new infrastructure to - new infrastructure - renewables infrastructure - due diligence being connect new gas for new projects - firming power required undertaken on regulated supplies to mar
Slide 22: Organisational review - complete
organisational review - complete Purpose: why we exist We strengthen communities through responsible energy Vision: what we aspire to To be world class in energy solutions Culture: how we do things Build on our STARS values, we are customer focused, innovative and collaborative, with empowered and e
Slide 23: APA's operating model
APA’s operating model “creates strategic alignment across the organisation to empower APA’s people to make the best decision every time, balancing speed and governance in pursuit of superior outcomes consistent with its vision and purpose” New operating structure as at 10 February 2020: CEO & MD Rob
Slide 24: Summary and outlook
summary and outlook 1H FY2020 – a solid result • EBITDA up 6.9% • Operating cash flow up 8.9% • First full period contribution from new growth assets- $38.3 million • Growth capital expenditure continued - $145.1 million • Distribution of 23 cps, up 7.0% ps, plus 3.65 cps franking credits Business s
Slide 25: APA's uniquely integrated energy assets
APA’s uniquely integrated energy assets Assets and Investments Glossary AGPGLOS Amadeus Gas Pipeline AL Agnew Lateral BGP Bonaparte Gas Pipeline BWSF Badgingarra Wind and Solar Farms BWP Berwyndale Wallumbilla Pipeline CGP Carpentaria Gas Pipeline CRP Central Ranges Pipeline & distribution network C
Slide 26: Supplementary information
supplementary information. stay connected. 2019 full year employee update.
Slide 27: 1H FY20 operational summary - Energy Infrastructure
1H FY20 operational summary – Energy Infrastructure 0 100 200 300 400 500 600 700 800 A$ 900m 1H FY17 1H FY18 1H FY19 1H FY20 East Coast + Central regions Western Australia Wallumbilla Gladstone Pipeline South West Queensland Pipeline Roma Brisbane Pipeline Carpentaria Gas Pipeline Diamantina Power
Slide 28: Energy infrastructure contracting
energy infrastructure contracting Recontracting ongoing: Number of renewed firm service contracts • No formal access requests which may trigger 60 arbitration process 50 • Since the GMRG reforms (1 Aug 2017) were introduced, APA has entered into ~234 contracts or 40 contract changes across all trans
Slide 29: Corporate costs
corporate costs • APA’s corporate costs (excluding one-off items) have been steady at ~ $36 million per half year period, despite EBITDA increasing 109.9% since 1H FY2015 1,000 A$ m 10% 800 8% 600 6% (1) 400 4% (2) 200 2% 0 0% 1H FY15 1H FY16 1H FY17 1H FY18 1H FY19 1H FY20 Corporate costs (LHS) EBI
Slide 30: Debt facilities
debt facilities Total committed debt facilities at 31 December 2019: $ million Facility Drawn Tenor amount amount 2015, 2016, 2017, 2018 & 2019 400 120 3 to 5 year facilities maturing between May 2020 to July 2022 Bilateral bank facilities 2018 Syndicated bank facilities 1,000 0 5 and 5.5 year tranc
Slide 31: For further information contact
For further information contact: Jennifer Blake Head of Investor Relations T: +61 2 9693 0097 M: +61 455 071 006 E: jennifer.blake@apa.com.au stay connected. Or visit the APA website at: 2019 full year www.apa.com.au employee update.