Apa Group · ASX:APA
Apa — H1 FY2018 Earnings Presentation
31 slides from Apa's earnings presentation, Feb 21, 2018
Slide 1: Financial results for half year ended 31 December 2017
financial results for half year ended 31 December 2017. For personal use only 21 February 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). For personal use only The information in this presentation does not conta
Slide 3: Results overview and strategic highlights
For personal use only results overview and strategic results overview and highlights strategic highlights Mick McCormack Managing Director and CEO. 3
Slide 4: 1H FY18 highlights
1H FY18 highlights $ million 1H FY18 1H FY17 change For personal use only Statutory results Revenue excluding pass-through(1) 954.7 954.3 steady - EBITDA 755.3 759.7 steady 0.6% Net profit after tax 124.0 139.8 down 11.3% Operating cash flow(2) 462.5 518.2 down 10.8% Operating cash flow per security
Slide 5: Results overview
results overview • Sound results delivered and in line with FY2018 guidance expectations For personal use only • On track to deliver growing portfolio of committed growth projects in FY2018-19 • Enhanced services offering customers more options, flexibility, clarity and simplicity East Coast Grid We
Slide 6: Market dynamics – East Coast Grid
market dynamics – East Coast Grid 15 new GTA’s on non-scheme pipelines, commercially For personal use only Dynamic eastern Australia energy market negotiated since 1 August 2017 Changing customer needs - point-to-point is yesteryear - require greater flexibility & seamlessness APA continues to
Slide 7: A record capex program – FY2018 & FY2019
a record capex program – FY2018 & FY2019 - a growing portfolio of committed projects For personal use only Yamarna Gas Pipeline & Power Station Reedy Creek Wallumbilla Pipeline Darling Downs Solar Farm Mt Morgans Gas Pipeline Emu Downs Solar Farm Badgingarra Wind Farm Orbost Gas Processing Plant 7
Slide 8: Financial performance
For personal use only financial results overview andperformance strategic highlights Peter Fredricson Chief Financial Officer. 8
Slide 9: Summary results
summary results For personal use only $ million 1H FY18 1H FY17 Change Revenue excluding pass-through(1) 954.7 954.3 - EBITDA 755.3 759.7 (0.6%) Depreciation and amortisation (289.1) (282.0) (2.5%) EBIT 466.1 477.7 (2.4%) Net interest expense (262.6) (254.7) (3.1%) Pre-tax profit 203.5 223.0 (8.7%)
Slide 10: 1H FY18 result: EBITDA by business segment
1H FY18 result: EBITDA by business segment $ million 1H FY18 1H FY17 Change For personal use only Energy Infrastructure 1H FY18 EBITDA Bridge Queensland 474.0 460.9 0.8% New South Wales 71.8 80.8 -$4.4m Victoria & 71.5 79.4 (9.9%) South Australia • Earnings were Northern Territory 11.4 10.0 13.8% st
Slide 11: Low risk business model
low risk business model • APA has solid risk management processes in place For personal use only • Continue to manage counterparty risks by: Diversification of customers and industry exposures Assessment of counterparty creditworthiness Entering into long term contracts to support major capita
Slide 12: Capital expenditure and investment cash flows
capital expenditure and investment cash flows $ million 1H FY18 1H FY17 400m A$ For personal use only Growth capex Acquisitions & Regulated – Victoria 22.4 46.6 other 320.8 investment 295.7 cash flows Non-regulated 300 East Coast Grid 78.9 22.2 Western Australia 120.1 2.6 212.6 Growth capex 200 Othe
Slide 13: On track to deliver growth projects
on track to deliver growth projects Project (% spent) Pipeline projects Renewables projects Midstream projects For personal use only Projects 1H FY18 2H FY18 1H FY19 2H FY19 1H FY20 2H FY20 Customer Emu Downs Solar Farm ~98% 13-year contract Synergy (incl. $5.5m ARENA funding) Reedy Creek Wallumbill
Slide 14: Capital management
capital management • $500 million equity raising announced in line with APA’s capital management strategy of For personal use only supporting growth and investment with appropriate funding • Cash and committed undrawn facilities of around $1,350 million as at 31 December 2017 to meet the continuing
Slide 15: Debt maturity profile
debt maturity profile APA maintains diversity of funding sources and spread of maturities (1) For personal use only $1,600m Sterling MTN $1,400m Euro MTN $1,200m US 144A Notes First Call Date - 60 year $1,000m Sub Notes Canadian MTN $800m (3) Japanese MTN $600m Australian MTN $400m US Private Placem
Slide 16: Fully covered distributions
fully covered distributions For personal use only • Distribution components: Franking Credits 5.83 cents APT franked profit distribution • APA cash tax payer - calendar 2017 2.47 cents APT unfranked profit distribution 7.29 cents APT capital distribution • Franking credits of 2.5 cents per 3.03 cent
Slide 17: FY18 guidance
FY18 guidance • Based on current operating plans and available information, EBITDA for FY2018 is expected to be in the range of $1,475 million to $1,510 million(1) For personal use only • Net interest costs for FY2018 expected within a range of $510 million to $515 million, down from $525 million to
Slide 18: Outlook
For personal use only outlook results overview and strategic highlights Mick McCormack Managing Director and CEO. 18
Slide 19: Customers – clarity, flexibility, simplicity
customers – clarity, flexibility, simplicity APA services refresh: For personal use only Customers can better manage their gas portfolios Facilitating gas market liquidity Wholesale gas price – East Coast gas market average Gas transportation costs have not increased in real terms in 15 years
Slide 20: Energy industry working together
energy industry working together Energy Industry Consumer Charter For personal use only Consumer Charter Commitment We each recognise the importance of the energy industry as a whole delivering energy to end users in accordance with community expectations. We are committed to developing industry cul
Slide 21: APA's uniquely integrated energy assets
APA’s uniquely integrated energy assets Assets and Investments Glossary For personal use only AGPGLOS Amadeus Gas Pipeline BGP Bonaparte Gas Pipeline BWF Badgingarra Wind Farm BWP Berwyndale Wallumbilla Pipeline CGP Carpentaria Gas Pipeline CRP Central Ranges Pipeline & distribution network CWP Cent
Slide 22: Supplementary information
For personal use only supplementary information. 22
Slide 23: 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$9.2 billion (as at 20 Feb 2018) ASX rank S&P/ASX 50 Credit rating Moody’s: Baa2 (outlook Stable) S&P: BBB (o
Slide 24: 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 pass-through trust • Australian Pipeline Limited (ACN 091 344 704) is the responsible
Slide 25: 1H FY18 operational summary – Energy Infrastructure
Wallumbilla Gladstone Pipeline South West Queensland Pipeline Roma Brisbane Pipeline 1H FY18 operational summary – Energy Infrastructure Carpentaria Gas Pipeline Moomba Sydney Pipeline Diamantina Power Station Victorian Transmission System Other Qld assets SESA Pipeline Amadeus Gas Pipeline Goldfiel
Slide 26: Operational summary – Asset Management, Energy Investments, Corporate costs
1H FY18 operational summary – Asset Management, Energy Investments and Corporate costs For personal use only Asset Management Asset Management EBITDA A$50m • Connections growth, primarily attributable to new housing developments, as natural gas continues to be a fuel of One-off 40 choice for househo
Slide 27: Continued growth momentum
continued growth momentum $1,600m Normalised EBITDA $1,200m Normalised operating cash flow For personal use only $1,400m $1,470 $1,000m $1,331 $974 $1,200m $800m $862 $1,000m $800m $600m $822 $747 $545 $600m $662 $400m $433 $440 $535 $490 $400m $336 $290 $200m $200m 1H FY17 1H FY18 1H FY17 1H FY18 $
Slide 28: Debt facilities
debt facilities Total committed debt facilities at 31 December 2017 For personal use only $ million Facility Drawn Tenor amount amount 2015, 2016 & 2017 Bilateral bank 550 - 2 to 4.6 year facilities maturing between May 2018 to July 2022 facilities 2015 Syndicated bank facilities 519 - 3.25 and 5.25
Slide 29: Regulatory update
regulatory update • Approximately 9.9% of APA’s Energy Infrastructure revenues in 1H FY18 was regulated revenue • APA’s major regulatory resets over the next few years are as follows: For personal use only Note: Asset will cease to be covered as of 1 July 2019 in accordance with the National Gas Law
Slide 30: 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 For personal use only Rules in all jurisdictions except Wes
Slide 31: For further information contact
For personal use only For further information contact: Jennifer Blake Acting Group Head of Investor Relations T: +61 2 9693 0097 E: Jennifer.blake@apa.com.au Or visit the APA website at: www.apa.com.au 31