Apa Group · ASX:APA
Apa — Australian Pipeline Trust — H1 2005 Earnings Presentation
27 slides from Apa's earnings presentation, Feb 28, 2005
Slide 1: a= PO s . : = oS — : = — - : =
a= PO s . : = oS — 3 : = — - : = - / = 2 = 2 oo
Slide 2: Half Year Results: NPAT
Half Year Results $M 30.0 - 21 3 22.1 25.7 2004 Net profit after tax 19 0 . & minorities: 20.0 - . + 16.1% from pep. 10.0 0.0 - 2001 2002 2003 2004 NPAT (after minorities) Australian Pipeline Trust
Slide 3: Half Year Results: Revenue
Half Year Results $M 200 129.1 138.4 141.0 179.2 150 100 50 + 0 4 2001 2002 2003 2004 Revenue - Total revenue +27.1% from pcp - Pipeline revenue: +35.5% from pcp © All other revenue & Pipeline Revenue - includes SCP Equity Contribution up to 17 Aug 2004 Australian Pipeline Trust
Slide 4: Strategic Objectives YEJ 2005
Strategic Objectives YEJ 2005 « Continued strong performance v « Complimentary businesses v - coal bed methane development v - gas storage v « Enhanced footprint in WA v « Active management of capital resources v « Positive regulatory outcomes v e Industry rationalisation - Epic x - SCP gas business
Slide 5: MoRTrERH |
MoRTrERH | TRERIPS RY “Fa, WHEW SEOMITH WALES
Slide 6: Agenda
Agenda * Financials « Operational Review *« Regulatory Environment * Board and Management * Qutlook Australian Pipeline Trust
Slide 7: Key Financial Ratios
Financials Key Financial Ratios Total Revenue 179.2 141.0 27.1 EBITDA 88.6 70.1 264 EBITDA margin 49.4% 49.7% Profit after tax & minorities 25.7 22.1 16.3 Eamings per unit (cents) 9.5 9.0 49 Distribution per unit (cents) 12.0 11.5 44 Net Interest Cover (times) 2.2 24 - Net Tangible Asset Backing per
Slide 8: Review of Profit Drivers
Financials Review of Profit Drivers EBITDA 88.6 70.1 26.4 Depreciation & Amortisation| 17.9 12.2 (46.7) Net Interest Expense 32.5 22.7 (43.2) Profit before Tax 38.2 35.2 8.5 Income Tax Expense (12.3) (12.8) 4.0 Net Profit after Tax & Minorities 25.7 22.1 16.1 Australian Pipeline Trust
Slide 9: Financial Summary: Composition of Revenue
Financial Summary Composition of Revenue 6 Months ended 31 December 2004 $M 129.1 138.4 141.0 179.2 200 “Interest & Other Revenue 150 f@ Other Pipeline Revenue 100 & Pipeline Revenue-SCP Equity Contribution 50 + @ Pipeline Revenue - Transportation 0 2001 2002 2003 Australian Pipeline Trust
Slide 10: Analysis of Revenue Growth
Financials Analysis of Revenue Growth Pipeline transportation revenue Pipeline Transportation Revenue $M - Revenue from SCP Gas Business 40.4 - RBP revenue increase 1.7 - Contracted GTD reduction (2.7) - Additional 3rd party revenue in MSP 0.5 « Up 45.5% largely due to consolidation of SCP from 17 A
Slide 11: Revenue by Pipeline
Financial Summary Revenue by Pipeline US? =. Moomba to Svane 6 Months ended 31 December 2004 aan | mnctanierane. Pipelines CGP - Carpentaria Gas $m AGT ~- Amadeus Gas Trust GGT - Goldfields Gas Transmission 43.4 MWP - Mid West MSP AGT GGT RBP CGP MWP MPassthrough Revenue 2004 EjPassthrough Revenue 2
Slide 12: Portfolio Diversification
Portfolio Diversification MSP Reliance Reduced APA Revenues 6 Months to 31 Dec 2003 APA Revenues 6 Months to 31 Dec 2004 Pro forma pre-acquisition Post acquisition MWP. MWwP 1% 1% REP 12% AGT 10% 12% RBP 8% Note: GGT is based on 55% of SCP revenue for Dec 2003. Revenues exclude passthrough revenue A
Slide 13: Operating Cash Flow and Debt
. Financials Operating Cash Flow and Debt SCP gas business acquisition impacted cash flow during the half year and overall debt levels — Net cash from operating activities before interest and tax increased 33.1% to $91.1m — Consolidated Net Debt rose by $270.5m to $974.0m from $703.5m in June 2004 S
Slide 14: Distributions Increased
Financials Distributions Increased € 5.0 5.5° 1st interim December 2nd Interim March 5.0 5.5 3rd Interim June 5.0 . Final September 6.57 Total 21.5 ® Distribution 40% franked at corporate tax rate (all other distributions unfranked) « 2nd Interim distribution payable 30 March 2005 * Distribution Rei
Slide 15: SCP Gas Assets Acquired
Operational Review SCP Gas Assets Acquired Assets purchased for $209m including transaction costs and working capital adjustments Goldfields Gas Transmission (WA) — Purchased remaining 45% of SCP Investments from equity partner, CMS Energy, on 17 Aug 2004 — Integration now substantially finalised —
Slide 16: Mondarra Gas Storage Facility (WA)
Operational Review Mondarra Gas Storage Facility (WA) + Plans advanced on de-bottlenecking and expansion of Mondarra Gas storage facility (WA) + Project aims to assist in meeting Perth’s energy needs during peak periods * Estimated capital cost of $25 million * Working together with Western Power Au
Slide 17: Carpentaria Gas Pipeline and Roma to Brisbane Pipeline
Operational Review Carpentaria Gas Pipeline (Qld) + Acquired remaining 30% interest in Dec 2004 * $98 million inclusive of transaction costs + Immediately earnings and cash flow accretive Roma to Brisbane Pipeline (Qid) + 10 year agreement to transport up to 16Pj of natural gas to Incitec Pivot from
Slide 18: Moomba to Sydney Pipeline
Operational Review Moomba to Sydney Pipeline . Full retail contestability finally delivering third party revenue + Stress Corrosion Cracking — Intelligent pig run in January — Results currently being analysed — Detected SCC repaired, no major anomalies to date — Intelligent pig re-run required, at n
Slide 19: Regulatory Environment: Moomba to Sydney
Regulatory Environment Moomba to Sydney Pipeline System + Australian Competition Tribunal (ACT) upheld APA appeal on initial capital base and rate of return + Further sitting by ACT in February on valuation methodology. APA is confident that ACT will accept APA methodology * ACCC has appealed to Fed
Slide 20: Regulatory Environment: Goldfields, Roma to Brisbane
Regulatory Environment Goldfields Gas Transmission Pipeline * Economic Regulatory Authority reviewing revised access arrangement + Final decision before financial year end Roma to Brisbane Pipeline & Carpentaria Gas Pipeline + NCC argued that Queensland Gas Regime is “ineffective” and that both pipe
Slide 21: Regulatory Environment: Productivity Commission
Regulatory Environment Productivity Commission *« Report released in August 2004 *« Recommends a number of improvements to National Gas Access Code and its interpretation *« Implementation of findings is subject to the Ministerial Council on Energy developing a response to the Commission's recommend
Slide 22: Opportunities
Opportunities * Trans Territory Pipeline Project - 949 km gas pipeline from Wadeye to Gove. * PNG to Australia Gas Pipeline Project — PNG Gas Development Project has moved to FEED with December 2005 targeted as project sanction date — AGL/Petronas Consortium are calling for tenders for the FEED phas
Slide 23: Outlook FY05
Outlook FY05 « Diversification of income will more than offset contracted reductions from the GTD « Distributions will be at least maintained and 40% franked, at the corporate rate ¢ Full year results should continue the strong trend of the business over the last 4 years * Tax consolidation legislat
Slide 24: Summary
Summary * Consistent improvement in profit and cash flow each reporting period since listing - again in this period * Portfolio re-balanced with SCP gas business & CGP acquisitions * Increased throughput and profitability on existing pipelines by innovative contracts * Investment grade criteria main
Slide 25: Board
° ° Board Board Renewal Two foundation directors retired from the Board during the period — Les Fisk (AGL representative) - August 2004 — Tom Ford (Independent) - December 2004 Incoming directors bring a new mix of skills and experience — Ross Gersbach (AGL representative) - financial and pipeline e
Slide 26: Management
Management Retirement of MD * Managing Director, Jim McDonald will retire effective 1 July 2005. * Mick McCormack (current Chief Operating Officer) will assume role of Chief Executive Officer as of 1 July 2005 — Mick has 20 years experience in the pipeline industry — Strong background in engineering
Slide 27: SS Se
< : SO SS Se a 7 =
Australian Pipeline Trust — H1 2005 Earnings Presentation on 6ix