Slide 1: Financial results for half year ended 31 December 2018
financial results for half year ended 31 December 2018. 20 February 2019
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: 1H FY2019 highlights
1H FY2019 highlights $ million 1H FY19 1H FY18 change Revenue excluding pass-through(1) 1,012.9 954.7 Up 6.1% EBITDA 787.7 755.3 Up 4.3% Net profit after tax 157.4 124.0 Up 27.0% Operating cash flow(2) 470.2 462.5 Up 1.7% Operating cash flow per security (cents) 39.8 41.4(3) Down 3.9% Distributions
Slide 5: Results overview
results overview • Solid interim results delivered New revenue generating assets • On track to deliver FY2019 EBITDA within upper end of guidance range • Growth capex spend on committed projects of $261.4m and on track to reach ~$425m for FY2019 • New revenues from new operating assets Pipelines a
Slide 6: FY2017–FY2019 record capex program
record capex program $1.4 b plus – nearing completion FY2017 – FY2019 Darwin WPP BGP Yamarna Gas Pipeline & Reedy Creek Wallumbilla Pipeline AGP Gruyere Power Station - commissioned May 18 - gas pipeline commissioned FY2018 TGP Northern DPS & LPS Territory Mount X41 PS - power station generatingPPSr
Slide 7: Financial results overview and performance
financial results overview andperformance strategic highlights Peter Fredricson Chief Financial Officer. 7
Slide 8: Summary results
summary results $ million 1H FY19 1H FY18 Change Revenue excluding pass-through(1) 1,012.9 954.7 6.1% EBITDA 787.7 755.3 4.3% Depreciation and amortisation (297.6) (289.1) (2.9%) EBIT 490.0 466.1 5.1% Net interest expense (239.6) (262.6) 8.8% Pre-tax profit 250.5 203.5 23.1% Tax (93.1) (79.5) (17.0%
Slide 9: 1H FY19 result: EBITDA by business segment
1H FY19 result: EBITDA by business segment $ million 1H FY19 1H FY18 Change Energy Infrastructure Queensland 511.6 474.0 7.9% New South Wales 75.4 71.8 5.0% Victoria & South Australia 68.8 71.5 (3.8%) Northern Territory 10.8 11.4 (5.1%) Western Australia 122.7 117.0 4.9% Energy Infra total 789.4 745
Slide 10: 1H FY19 EBITDA bridge
1H FY19 EBITDA bridge Energy Infrastructure $820.0 $(2.7) (1) $8.6 $1.1 $(14.1) $15.4 $(7.2) $1.8 $800.0 $787.7 $15.8 $780.0 $13.8 $760.0 $755.3 $740.0 $720.0 $700.0 Notes: (1) Includes $11.3 million of costs associated with the CKI proposal and Managing Director’s impending retirement. 10
Slide 11: 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 12: Energy infrastructure contracting
energy infrastructure contracting Number of renewed firm service contracts Recontracting ongoing: 20 • Since the GMRG reforms (1 Aug 2017) were introduced, APA has entered into ~120 contracts or 15 variations across all transmission pipelines • Of the ~120 contracts, 30 relate to firm service 10 con
Slide 13: Capital expenditure and investment cash flows
capital expenditure and investment cash flows $ million 1H FY19 1H FY18 Growth capex A$ m 400 Regulated – Victoria 14.0 22.4 Acquisitions 330.4 & other Non-regulated 320.8 295.7 investment East Coast Grid 104.3 78.9 300 Western Australia and Growth 132.6 120.1 capex Northern Territory 200 Other 10.5
Slide 14: 3 year growth projects update
3 year growth projects update 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 Pi
Slide 15: Capital management
capital management • Cash and committed undrawn facilities of around $1,220 million as at 31 December 2018 to meet the continuing needs of the business • Credit ratings: S&P BBB (outlook Stable, confirmed Nov 2018), Moody’s Baa2 (outlook Stable, confirmed Nov 2018) • Key capital ratios are as follow
Slide 16: 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 obliga
Slide 17: Fully covered distributions
fully covered distributions • Distribution payout ratio(1) of 53.4% Franking Credits • Distribution components: • Franking credits of 3.2 cents per 7.47 cents APT franked profit distribution security allocated to the interim APT 2.03 cents APT unfranked profit distribution profit distribution 6.58 c
Slide 18: FY2019 guidance
FY2019 guidance • Based on current operating plans and available information, EBITDA for FY2019 is expected to be within the upper end of the guidance range of $1,550 million to $1,575 million • Net interest costs for FY2019 expected to settle towards the lower end of the range of $500 million to $5
Slide 19: Outlook
outlook results overview and strategic highlights Mick McCormack Managing Director and CEO. 19
Slide 20: Customers & consumers – front and centre
customers & consumers – front and centre APA’s Customer Promise • APA’s top 20 transmission customers surveyed Our vision: Together, deliver energy for a better Australia. • Improving the customer experience is an ongoing focus First whole-of-industry initiative to deliver better customer outcomes
Slide 21: North America - exploring opportunities
North America - exploring opportunities • In FY17, APA advised the market that we were exploring opportunities in North America as part of APA’s long term growth strategy • US Houston office opened in August 2017 with 2 full-time employees • CKI proposal stalled progress in 1H FY2019 • Ongoing due d
Slide 22: APA's uniquely integrated energy assets
APA’s uniquely integrated energy assets Assets and Investments Glossary Darwin AGPGLOS Amadeus Gas Pipeline WPP AL Agnew Lateral 830 PJ BGP Bonaparte Gas Pipeline BGP BWSF Badgingarra Wind and Solar Farms BWP Berwyndale Wallumbilla Pipeline 17,384 PJ CGP Carpentaria Gas Pipeline CRP Central Ranges P
Slide 23: Supplementary information
supplementary information. 23
Slide 24: 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$11.1 billion (as at 19 Feb 2019) Jemena 2,349 km ASX rank S&P/ASX 50 AGIG Credit rating Moody’s: Baa2 (outlook Stable) 3,770 km S&
Slide 25: 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 26: 1H FY19 operational summary – Energy Infrastructure
Victorian Transmission System SESA Pipeline and other SA assets Amadeus Gas Pipeline Goldfields Gas Pipeline Eastern Goldfields Pipeline Emu Downs Wind Pilbara Pipeline System Mondarra Gas Storage 1H FY19 operational summary – Energy Infrastructure Other WA assets and Solar Farms and Processing Faci
Slide 27: Historical normalised EBITDA by asset – Energy Infrastructure
historical normalised EBITDA by asset – Energy Infrastructure $ millions FY15 FY16 FY17 FY18 1H FY18 1H FY19 East Coast Grid Wallumbilla Gladstone Pipeline 35.8 475.2 488.0 515.9 250.8 276.8 South West Queensland Pipeline 188.3 240.3 242.4 244.3 123.3 124.0 Moomba Sydney Pipeline 120.8 121.7 149.5 1
Slide 28: 1H FY19 operational summary – Asset Management and Energy Investments
1H FY19 operational summary – Asset Management and Energy Investments Asset Management EBITDA A$ 30 m Asset Management One-off Customer • Main customers: Australian Gas Networks, Energy Contributions 20 Infrastructure Investments and GDI (EII) • Customer contribution average ~$11m p.a. • Revenue (ex
Slide 29: Corporate costs
Corporate costs • Corporate costs have been steady, despite APA’s record growth period A$ m 1,000 10% 800 8% 600 6% (1) (2) 400 4% 200 2% 0 0% 1H FY14 1H FY15 1H FY16 1H FY17 1H FY18 1H FY19 Corporate costs (LHS) EBITDA (LHS) Corporate costs/EBITDA* (RHS) Notes: *EBITDA excluding corporate cost (1)
Slide 30: Continued growth momentum
continued growth momentum Normalised EBITDA Normalised operating cash flow Total assets Distributions 30
Slide 31: Debt facilities
debt facilities Total committed debt facilities at 31 December 2018 $ million Facility Drawn Tenor amount amount 2015, 2016, 2017 & 2018 Bilateral 550 100 2 to 4.6 year facilities maturing between May 2019 to July 2022 bank facilities 2018 Syndicated bank facilities 1,000 355 5 and 5.5 year tranches
Slide 32: Regulatory update
regulatory update • Approximately 9.4% of APA’s Energy Infrastructure revenues in 1H FY2019 was regulated revenue • APA’s major regulatory resets over the next few years are as follows: • Central Ranges Pipeline and Network will cease to be covered as of 1 July 2019 in accordance with the National G
Slide 33: 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 34: Wallumbilla Gladstone Pipeline
Wallumbilla Gladstone Pipeline • 556 kilometres of transmission pipeline acquired in 2015, servicing QCLNG export facility • Fully contracted revenue through to 2035, derived through take-or-pay GTAs with foundation shippers (BG Group & CNOOC) • Initial EBITDA guidance based on US$355 million plus C
Slide 35: Orbost Gas Processing Plant
Orbost Gas Processing Plant December 2017 • plant will process up to 68 TJ per day of gas from the offshore Sole gas field from mid- 2019 • construction upgrade completion expected in Q3 CY2019 • new source of gas supply for eastern Australia • on spec commissioning gas is expected to be delivered t
Slide 36: For further information contact
For further information contact: Jennifer Blake Group Head of Investor Relations T: +61 2 9693 0097 M: +61 455 071 006 E: jennifer.blake@apa.com.au Or visit the APA website at: www.apa.com.au 36