Slide 1: ASX Release cover letter
ASX RELEASE 26 August 2008 For personal use only 26 August 2008 The Manager Company Announcements Office Australian Securities Exchange 4th Floor, 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Dear Sir or Madam Company Announcement I attach the following announcement for release to the marke
Slide 2: Financial Results Full Year ended 30 June 2008
For personal use only Financial Results Full Year ended 30 June 2008 26 August 2008
Slide 3: Agenda
Agenda For personal use only Results overview Financial performance Operating performance Priorities and outlook Mick McCormack MANAGING DIRECTOR Rick Francis CHIEF FINANCIAL OFFICER FY08 Results Presentation Æ 2
Slide 4: Record financial results
Record financial results For personal use only Strong growth in revenue, EBITDA, cash flow and cash flow per security $ million FY08 FY07 Change 1 Underlying revenue excluding pass-through 614.9 436.8 K 41% 1 Underlying EBITDA 430.5 296.8 K 45% 1 Underlying NPAT 82.2 64.5 K 27% Reported NPAT 67.2 56
Slide 5: Cash flow supports distribution growth
Cash flow supports distribution growth For personal use only Achieved target of at least 5% distribution growth for FY08 Operating cash flow and Total operating cash flow distribution per security and distributions APA distributions are well covered by operating cash flow, with cash remaining to fun
Slide 6: Strategic and operational highlights
Strategic and operational highlights For personal use only Completed the transition from infrastructure owner to an operating business Acquired and integrated the Asset Management business from Origin Energy. – Asset management of Envestra assets with addition of 488 skilled gas network and pipeli
Slide 7: Strategic and operational highlights: enhancing gas infrastructure portfolio
Strategic and operational highlights For personal use only Enhancing APA’s gas infrastructure portfolio Continued greenfield and brownfield growth on core gas infrastructure assets, all underpinned by long term agreements – Completed the Culcairn compressor (NSW), Brooklyn-Lara pipeline (Vic) and
Slide 8: APA's businesses and management deliver financial stability and growth
APA’s businesses and management deliver financial stability and growth For personal use only STABILITY GROWTH Capacity expansion underpinned by agreements Long term contracts, CPI indexed Extension of gas network into growth areas Capacity based agreements Gas transmission Interconnected portfolio –
Slide 9: Financial performance
Financial performance For personal use only Delivering financial stability and growth Income statement Earnings analysis Operating cash flow Distributions Capital management FY08 Results Presentation Æ 8
Slide 10: Increasing income
Increasing income For personal use only Strong underlying cash flow supports distribution growth $ million FY08 2 FY07 3 Change 1 Revenue 897.8 532.7 K 68.5% 1 EBITDA 430.5 296.8 K 45.0% 1 EBIT 330.8 227.1 K 45.7% Net interest expense 1 (223.8) (136.6) K 63.8% Tax 1 (24.8) (25.8) L 3.9% NPAT – under
Slide 11: Reconciling underlying result
Reconciling underlying result For personal use only Adjusting for AIFRS impacts Reported Capital Comp. Significant Underlying $ million result distributions1 assets2 items3 result Revenue 881.7 10.8 5.3 - 897.8 EBITDA 414.5 10.8 5.3 - 430.5 NPAT 67.2 10.8 - 4.2 82.2 Operating cash flow 186.4 - - 5.7
Slide 12: Segment performance
Segment performance For personal use only EBITDA growth across all business segments $ million FY08 FY07 Change Gas transmission and distribution Queensland 95.8 73.8 30% New South Wales 66.8 46.5 44% Victoria 75.2 50.3 49% South Australia 19.5 - - Western Australia 107.9 100.7 7% Northern Territory
Slide 13: Operating cash flow
Operating cash flow For personal use only Growing distributions fully funded from operating cash flow $ million FY08 FY07 Change Underlying operating cash flow (OCF) 192.1 150.6 27.6% Distributions (net of DRP) 82.0 83.5 (1.8%) Available OCF 110.1 67.1 64.1% Underlying OCF per security (cents) 42.7
Slide 14: Continued distribution growth
Continued distribution growth For personal use only FY08 annual distribution, up 5.4% FY08 18.6% tax deferred component DRP continues at 2.5% discount Distributions fully covered by operating cash flow FY08 Results Presentation Æ 13
Slide 15: Capital management in FY08: strong balance sheet
Capital management in FY08 For personal use only Strong balance sheet ICR – 1.86x for FY08 Cash and committed undrawn facilities $525 million Gearing 72.0% (unchanged from FY07) Raised $124 million in equity – Security purchase plan ($85m) – Continued operation of DRP ($39m) 468.2 million
Slide 16: Capital management in FY08: secure long term debt portfolio
Capital management in FY08 For personal use only Secure long term debt portfolio Refinancing of $2 billion syndicate completed July 2007 Refinanced $150 million MTNs in August 2008 – Sub 100 bp average margin Only refinancing requirement in 2009 – March 2009 – MTN $300 million Interest rates
Slide 17: FY08 Capital expenditure growth
FY08 Capital expenditure growth For personal use only Capturing organic growth opportunities $ million FY08 FY07 Regulated Victoria Transmission System 79.1 24.9 APA Gas Networks (Qld) 15.9 10.9 95.0 35.8 Major Projects Pipeline expansion (compressors WA, NSW) 12.4 9.8 Gas storage expansion (Mondarr
Slide 18: FY09 Growth capex & capital management
FY09 Growth capex & capital management For personal use only Existing capital projects across all states exceed $325 million, supported by long term contracts and approved regulatory decisions NSW ($65m), WA ($50m), NT ($165m), Vic ($20m), Qld ($25m) Existing facilities and options are sufficient
Slide 19: Operating performance and priorities and guidance for FY09
Operating performance and priorities and guidance for FY09 For personal use only APA people Integration update Operations review Priorities and guidance FY08 Results Presentation Æ 18
Slide 20: APA people
APA people For personal use only Valuable internal resource of skills and experience Expanded our management and operating capability through – Acquisition of Origin’s asset management business (488 people) and – Transfer of Alinta O&M agreements (263 people) Engineering and technical management
Slide 21: Integration progress
Integration progress For personal use only Transition and integration on track Restructured the business in closer alignment with strategy – Moved from state based to nationally operated business on functional lines – Established Commercial and Operations groups headed by Ross Gersbach and Stephen
Slide 22: Gas transmission and distribution
Gas transmission and distribution For personal use only West Australia East Australia Point to point pipelines Interconnected pipelines Shippers unique to pipelines and networks Few gas sources Common shippers on pipelines Multiple gas sources Multiple gas users $m 499 394 368 276 Fina
Slide 23: Gas transmission and distribution: drivers and developments
Gas transmission and distribution For personal use only Key performance Increased revenue on all pipelines Operating expenses decrease due drivers from existing and new agreements, to internal management and synergy and peak services on Moomba benefits Sydney Pipeline System First full year co
Slide 24: Other business segments
Other business segments Asset management For personal use only Electricity transmission Complementary assets $m $m 43 $m 35 25 19 17 25 13 18 7 6 4 3 Revenue EBITDA Revenue EBITDA Revenue EBITDA FY08 Results Presentation Æ 23
Slide 25: Establishment of APA Unlisted Energy Fund
Establishment of APA Unlisted Energy Fund For personal use only Selling down APA’s position in assets that have annuity-style income streams APA Unlisted Energy Fund - unlisted vehicle to hold a number of APA’s annuity-style assets Structure of APA Unlisted Energy Fund – Electricity cables Murrayl
Slide 26: Expansion and development projects for FY09
Expansion and development projects for FY09 For personal use only Committed expansion projects underpinned by secure agreements FY08 Results Presentation Æ 25
Slide 27: Priorities and guidance
Priorities and guidance For personal use only Priorities Focus on enhancing APA’s gas infrastructure portfolio across Australia – Continue development of committed greenfield and brownfield projects – Positioning to capture gas transportation opportunities with growing gas demand Completion of A
Slide 28: delivering Australia's energy
For personal use only delivering Australia’s energy For more information on APA Group visit our website www.apa.com.au FY08 Results Presentation Æ 27
Slide 29: Disclaimer
Disclaimer For personal use only The information contained in this presentation is given without any liability whatsoever to Australian Pipeline Trust or APT Investment Trust or any of its related entities (collectively “APA Group”) or their respective directors or officers, and is not intended to c
Slide 30: Supplementary information
Supplementary information For personal use only Financials APA business segment Regulation update FY08 Results Presentation Æ 29
Slide 31: FY08 Income Statement
FY08 Income Statement For personal use only Full year contributions impacting positively FY08 Origin Energy Network Assets (includes Envestra equity, Asset management, SEA Gas Pipeline) - full 12 months Alinta O&M contract termination - nine months FY07 Victorian Transmission System and Telfer
Slide 32: Key financial ratios
Financials For personal use only Key financial ratios $ million FY08 FY07 Comments Underlying operating cash flow (cps) 42.7 39.7 Weighted average securities on issue (m) 450.3 379.6 Payout ratio 71.2% 72.3% EPS (cps) underlying 18.3 17.0 including significant items 14.9 15.0 Interest cover ratio (t
Slide 33: Revenue analysis by business segment
Financials For personal use only Revenue analysis by business segment $ million FY08 FY07 Change Revenue Gas transmission and distribution Queensland 133.6 108.2 23% New South Wales 82.3 75.4 9% Victoria 102.0 66.6 53% South Australia 19.7 - - Western Australia 142.5 128.7 11% Northern Territory 18.
Slide 34: Significant items
Financials For personal use only Significant items $ million Pre tax Tax After tax FY08 Acquisition integration costs (4.4) 1.3 (3.1) Unsuccessful acquisition due diligence costs (1.3) 0.4 (0.9) Revaluation gain – GasNet hedges (0.3) 0.1 (0.2) Total (6.0) 1.8 (4.2) FY07 Advisory and legal costs (7.0
Slide 35: Operating cash flow
Financials For personal use only Operating cash flow $ million FY08 FY07 Underlying EBITDA (pre-significant items) 430.5 296.8 Non-cash movements and provisions 3.5 (7.2) Dividends received 7.4 - Net working capital movements (34.1) (5.8) SCC payments (7.6) (13.3) Net interest paid (208.2) (127.0) T
Slide 36: Composition of FY08 distributions
Financials For personal use only Composition of FY08 distributions FY08 Results Presentation Æ 35
Slide 37: Total committed debt facilities
Financials For personal use only Total committed debt facilities Facility Facility amount Tenor Medium term notes $300 million March 2009 Bilateral borrowings $165 million July 2011 Project debt $80 million December 2011 2003 US private placement $496 million 7, 10, 12 and 15 year tranches September
Slide 38: APA Group business segments
APA Group business segments For personal use only Gas Transmission and Electricity APA Asset Complementary Distribution Transmission Management Energy Assets Queensland: Interstate connectors: Envestra assets: Gas fired generation (Qld): - Roma Brisbane Pipeline - Murraylink (SA-Vic) - 19,100 km gas
Slide 39: Regulatory update
Regulatory update For personal use only Regulatory resets over the next five years 2008 2009 2010 2011 2012 Moomba Sydney Pipeline 1, 2 Goldfields Gas Pipeline Central West Pipeline Amadeus Gas Pipeline Roma Brisbane Pipeline Victorian Transmission System Carpentaria Gas Pipeline 3 APA Gas Network (
Slide 40: For personal use only
For personal use only FY08 Results Presentation Æ 39
Slide 41: Contact and About APA Group
ASX RELEASE 26 August 2008 For personal use only For further information please contact: Chris Kotsaris, Investor Relations APA Group Joanne Collins, Gavin Anderson & Company Telephone: (02) 9693 0049 or Mob: 0402 060 508 Telephone: (02) 9552 8939 or Mob: 0423 029 932 Email: chris.kotsaris@apa.com.a