Apa Group · ASX:APA
Apa — H1 2025 Earnings Presentation
50 slides from Apa's earnings presentation, Feb 24, 2025
Slide 1: APA 1H25 Results Presentation
APA Group Limited ACN 091 344 704 | APA Infrastructure Trust ARSN 091 678 778 | APA Investment Trust ARSN 115 585 441 Level 25, 580 George Street Sydney NSW 2000 | PO Box R41 Royal Exchange NSW 1225 Phone +61 2 9693 0000 | Fax +61 2 9693 0093 APA Group | apa.com.au 24 February 2025 ASX ANNOUNCEMENT
Slide 2: FY25 Half Year Results
FY25 Half Year Results Securing Australia’s energy future 24 February 2025 Image: Port Hedland Solar Farm, WA
Slide 3: Disclaimer
Disclaimer Disclaimer This presentation has been prepared by APA Group Limited (ACN 091 344 704) as responsible entity of the APA This information is based on assumptions and contingencies which are subject to change. APA Group assumes no Infrastructure Trust (ARSN 091 678 778) and APA Investment Tr
Slide 4: Acknowledgement of Country
Acknowledgement of Country At APA, we acknowledge the Traditional Owners and Custodians of the lands on which we live and work throughout Australia. We acknowledge their connections to land, sea and community. We pay our respects to their Elders past and present, and commit to ensuring APA operates
Slide 5: People safety share
People safety share Driving a culture of safety and care in our workplace Positive correlation between HSEH interactions and a Driving interaction with the launch of the reduction in potential serious harm incidents and ‘For the things that matter’ initiative recordable injuries1 15000 60 12000 48 N
Slide 6: Highly compelling investment thesis
Highly compelling investment thesis 01. Strong market fundamentals. 02. 03. 04. Operating cash flow, DRP Predictable, highly cash flow Attractive distribution yield Role of gas confirmed well generative long life assets with strong track record of and strong balance sheet 2 beyond 2050 ; integral to
Slide 7: 1H25 highlights and outlook
1H25 highlights and outlook 1H25 Results Investor Presentation Image: Diamantina Power Station,, QLD
Slide 8: Strong growth in 1H25 earnings relative to prior period, guidance reaffirmed
Strong growth in 1H25 earnings relative to prior period, FY25 Underlying EBITDA and DPS guidance reaffirmed 1H25 Underlying EBITDA 1H25 Underlying EBITDA margin 1H25 Free Cash Flow (FCF) +9.1% to $1,015m 1.3 ppts to 74.5% +3.6% to $552m Underlying EBITDA (ex-Pilbara Energy Reflecting strong asset pe
Slide 9: Strong momentum in the execution of APA's growth strategy
Strong momentum in the execution of APA’s growth strategy Construction completed on Favourable regulatory outcome Port Hedland Solar and Battery on South West Queensland Energy system. Earnings Pipeline (SWQP) builds contribution expected in 2H confidence in East Coast Gas FY25 Grid expansion plans
Slide 10: Delivering a strong balance sheet and focusing on cost optimisation
Delivering a strong balance sheet and focusing on cost optimisation to support growth ambitions FFO / Net Debt 10.7%, Optimising APA’s cost base with 4 comfortably above target targeted reduction initiatives Disciplined focus on organic Foundational investments well growth progressed, including comp
Slide 11: Addressing investor priorities
Addressing investor priorities 5 • Many published reports (including AEMO, ACCC and Australian Government’s Future Gas Strategy ) confirm that gas demand will be strong beyond 2050, with increasing demand for gas infrastructure capacity Long-term role of gas 6 • Forecast consumption shifting to gas-
Slide 12: Initiatives to further enhance securityholder value
Initiatives to further enhance securityholder value 01. 02. 03. 04. 05. Advanced Targeted cost Partnerships Asset recycling Funding flexibility progress on reduction Partnership approach opportunities Ongoing operating value accretive initiatives being adopted for cash flow and Reviewing portfolio t
Slide 13: 1H25 financial performance
1H25 financial performance 1H25 Results Investor Presentation Image: Mondarra Gas Storage & Processing Facility, WA
Slide 14: Growth in Underlying EBITDA margin driven by strong contribution from new assets
Growth in Underlying EBITDA margin driven by strong contribution from new assets, inflation-linked tariff escalations and disciplined focus on costs 1H25 1H24 % Change Underlying EBITDA $m 1,015 930 9.1 % Underlying EBITDA margin % 74.5 73.2 1.3 ppts Free Cash Flow $m 552 533 3.6 % Distribution per
Slide 15: 1H25 earnings driven by strong performance across the portfolio
1H25 earnings driven by strong performance across the portfolio and disciplined cost control Energy Infrastructure +$86m Pilbara Energy power generation asset performance Corporate cost growth of 2.5%. (+$36m), partially offset by This is lower than guidance and 13 Additional 11.8% ownership lower a
Slide 16: Growth in Free Cash Flow driven by strong performance across portfolio
Growth in Free Cash Flow (FCF) driven by strong performance across portfolio, offset by increased debt funding costs 1H25 1H24 13 % Change Key drivers Underlying EBITDA $m 1,015 930 9.1% Cash impact of equity accounted earnings $m (1) (5) Change in working capital Change in Working Capital/Other $m
Slide 17: Statutory NPAT lower due to significant items and higher net interest expense
Statutory NPAT lower primarily due to significant items in prior corresponding period and higher net interest expense 1H25 1H24 % Change Key drivers Segment revenue (excluding pass- $m 1,363 1,271 7.2 % through)¹⁵ • Reduction in non-operating items as key Non-operating items $m (44) (90) (51.1) % te
Slide 18: Capital allocation framework designed to ensure FCF is deployed for greatest return
Capital allocation framework designed to ensure FCF is deployed to generate the greatest return for securityholders Productivity improvements Investment Organic growth Strategic acquisitions Free Cash Flow (FCF) Distributions Return to securityholders Other returns to securityholders Capital allocat
Slide 19: Ample capacity to fund the ~$1.8bn organic growth pipeline
Ample capacity to fund the ~$1.8bn organic growth pipeline over FY25-27 through operating cash flow, existing balance sheet capacity and DRP Significant existing balance sheet capacity and ongoing growth in operating cash flow provides further funding capacity 17 Forecast sources and uses of cash FY
Slide 20: Capex spend in line with forecast and focused on organic growth
Capex spend in line with forecast and focused on organic growth projects and strengthening system capabilities 18 Capex 1H25 1H24 FY25 Forecast* Key projects in FY25 • Port Hedland Solar and BESS project • Kurri Kurri lateral pipeline • East Coast Gas Grid expansion: Moomba Sydney Ethane Pipeline Gr
Slide 21: Balance sheet capacity strengthened with strong liquidity
Balance sheet capacity strengthened with strong liquidity to support ~$1.8bn organic growth pipeline 1H25 Capital management initiatives Key metrics • Issued USD1.25bn ($1,879m) US144A / Reg S notes with 10 and 20-year maturities 1H25 1H24 • Established $300m bilateral term loan with 10 year maturit
Slide 22: Continued delivery of strong earnings and distributions
Continued delivery of strong earnings and distributions, alongside organic growth Delivery of strong organic and Strong recontracting across portfolio inorganic growth in earnings of assets Expected to be +9.1% Underlying EBITDA fully contracted for winter 2025-2027 +4.4% Underlying EBITDA (Ex-PES)
Slide 23: Strategy and market dynamics
Strategy and market dynamics 1H25 Results Investor Presentation Image: Port Hedland Power Station, WA
Slide 24: Our strategy to be the partner of choice for the energy transition
Our strategy to be the partner of choice in delivering infrastructure solutions for the energy transition remains unchanged Estimated Addressable APA’s strategy is focused on four asset classes market size 22 $30bn $57bn $10bn $21bn Strategy positions APA to capitalise on Australian energy market dy
Slide 25: Demand for gas forecast to be strong beyond 2050
Demand for gas forecast to be strong beyond 2050 with increasing demand for gas infrastructure capacity Stable long term demand for gas with forecast consumption shifting to Gas-Powered Generation (GPG), driven by electrification including AI and 23 data centres. This shift calls for more flexible s
Slide 26: There is no shortage of domestic gas to meet growing East Coast demand
There is no shortage of domestic gas available to meet growing East Coast demand with Northern basins remaining the lower cost, lower emission supply source 25 Chart: AEMO GSOO 2024 forecast gas supply cost by Basin vs average 26 LNG global spot price to North-East Asia (Jun 2024 to Feb 2025) • Aust
Slide 27: APA aims to deliver incremental expansion of its East Coast Gas Grid
APA aims to deliver incremental expansion of its East Coast Gas Grid to meet customer demand while delivering strong returns for investors APA’s five-year East Coast Gas Grid expansion plan is designed to secure supply out to ~2032 and avoid gas shortfalls 27 Chart: AEMO forecast Southern demand (St
Slide 28: Five-year East Coast Gas Grid expansion plan
Five-year East Coast Gas Grid expansion plan to ensure lower cost and lower emission domestic gas can be transported to meet East Coast demand* Near-term projects Medium-term projects New north to south capacity in 2025 and 2026 Requiring customer commitment and subject to APA Final Investment Decis
Slide 29: Unlocking access to future supply sources, commencing with the Beetaloo Basin
Unlocking access to future supply sources, commencing with the Northern Territory’s Beetaloo Basin Indicative APA Northern Australia gas transmission and storage connections • Beetaloo Basin has promising lower cost, lower emissions gas compared to LNG import terminals and certain other domestic sup
Slide 30: Continued successful delivery of organic growth beyond the ~$1.8bn pipeline
Continued successful delivery of organic growth beyond the ~$1.8bn pipeline* will 30 support the focus on delivering sustainable ongoing distribution growth Gas transmission and storage Contracted power generation - Remote • East Coast Gas Grid Expansion Plan Stages 3-5 • Decarbonising mining in the
Slide 31: Closing remarks
Closing remarks 1H25 Results Investor Presentation Image: Kurri Kurri lateral pipeline, NSW
Slide 32: Investment thesis: Attractive distributions and significant growth opportunities
Investment thesis: Attractive distributions and significant near and long-term growth opportunities 01. 02. 03. 04. $27bn+ 2050+ 90% 75% Portfolio of gas, electricity and Long-life assets, natural gas Highly defensive and Strong EBITDA margins and cost renewable assets with long- required beyond 205
Slide 33: Supplementary Financials
Supplementary Financials 1H25 Results Investor Presentation Image: Port Hedland Power Station, WA
Slide 34: 1H25 Financial results summary
1H25 Financial results summary 1H25 1H24 % Change Revenue (excluding pass-through)³⁶ $m 1,364 1,274 7.1 % Segment revenue (excluding pass-through)³⁶ $m 1,363 1,271 7.2 % Underlying EBITDA $m 1,015 930 9.1 % Non-operating items $m (44) (90) 51.1 % Reported EBITDA $m 971 840 15.6 % Depreciation and am
Slide 35: Non-operating items includes ongoing non-cash items and foundational investment
Non-operating items includes ongoing non-cash items and foundational investment 1H25 1H24 % Change Key drivers Underlying EBITDA $m 1,015 930 9.1% • Technology transformation costs decreased with Technology transformation projects⁴⁰ $m (17) (46) 63.0% key foundational projects entering production, i
Slide 36: Historical Underlying EBITDA by asset – Energy Infrastructure
Historical Underlying EBITDA by asset – Energy Infrastructure $ million 1H25 1H24 FY24 FY23 FY22 FY21⁴³ FY20⁴³ East Coast Grid Wallumbilla Gladstone Pipeline 338 321 657 620 578 550 539 South West Queensland Pipeline 157 145 295 262 245 233 254 Moomba Sydney Pipeline 80 75 125 126 136 152 161 Victor
Slide 37: Revenue and Underlying EBITDA by geography
Revenue and Underlying EBITDA by geography $ million 1H25 1H24 Change ($) Change (%) Revenue Energy Infrastructure Queensland 663 686 (23) (3.4%) New South Wales 90 87 3 3.5% Victoria 135 124 11 8.9% South Australia 1 1 – –% Northern Territory 13 13 – –% Western Australia 365 280 85 30.4% Energy Inf
Slide 38: 1H25 Capital and investment expenditure
46 1H25 Capital and investment expenditure $ million Description of major projects 1H25 1H24 Growth capex Regulated Western Outer Ring Main (WORM), Victorian Transmission System 36 67 Non-Regulated – East Coast Gas Kurri Kurri lateral pipeline, East Coast Gas Grid Expansion 181 299 – West Coast Gas
Slide 39: 5-year normalised financials
5-year normalised financials Financial Performance 1H25 1H24 FY24 FY23 FY22 FY21 FY20 Total revenue $m 1,621 1,516 3,064 2,913 2,732 2,605 2,591 Total revenue excluding pass-through⁴⁷ $m 1,364 1,274 2,591 2,401 2,236 2,145 2,130 Underlying EBITDA $m 1,015 930 1,893 1,725 1,692 1,629 1,650 Total repo
Slide 40: WGP 1H25 hedge accounting implications
WGP 1H25 hedge accounting implications Background • To fund the acquisition of WGP in December 2015, APA issued fixed rate debt into global capital markets across five maturities in FY22, FY25 (already refinanced) FY27, FY30 and FY35 • These debt instruments were denominated or swapped to USD using
Slide 41: Appendix
Appendix 1H25 Results Investor Presentation Image: Port Hedland Solar Farm, WA
Slide 42: APA's diverse energy infrastructure portfolio
APA’s diverse energy infrastructure portfolio GAS TRANSMISSION AND CONTRACTED POWER ELECTRICITY STORAGE GENERATION TRANSMISSION 49 49 Transmission Renewable energy >800 km high voltage electricity 49 transmission , including 290 km deep-sea >15,000 km transmission pipelines 342 MW Wind cable 355 MW
Slide 43: APA's operational footprint across energy infrastructure assets
APA’s operational footprint is across a range of energy infrastructure assets 1H25 Results Investor Presentation 42
Slide 44: Diversified business model
Diversified business model Characteristics of APA’s Energy 1H25 Energy Infrastructure 1H25 Energy Infrastructure revenue 1H25 Energy Infrastructure revenue 51 Infrastructure revenue: by revenue type by counterparty credit rating by customer industry segment • Risk management policies and processes •
Slide 45: Inflation linked revenues
Inflation linked revenues 52 Revenue Drawn debt as at 31 December 2024 Commentary Majority of APA’s fixed revenue is indexed to Fully hedged/fixed with average maturity of 6.3 • A mix of annual and quarterly inflators in inflation years Australia • WGP US revenue is adjusted for US inflation indices
Slide 46: Diversity of funding sources and maturities as at December 2024
Diversity of funding sources and maturities as at 31 December 2024 2,500 2,000 928 300 350 500 Syndicated Term Loan EUR Hybrid⁵⁴ 1,500 JPY MTN 550 EUR MTN 1,018 GBP MTN⁵⁵ US144a⁵⁶ 1,038 NAIF 1,000 828 ARENA 1,612 Corporate liquidity facilities 1,431 Bilateral Term Loan (undrawn) 1,109 133 500 750 74
Slide 47: Group structure
Group structure 57 Group structure Tax structure APA Infrastructure Trust APA Investment Trust (APA Infra) (APA Invest) APA Infra APA Invest APA Group Limited 30% tax 0% tax (Responsible Entity) 77% 23% APA Infrastructure Ltd 100% APA Group Operating assets Passive investments and investments • APA
Slide 48: Endnotes
Endnotes 1. Page: 4 Chart includes contractors. Recordable Injury : An injury or illness which is classified as: Medical Treatment Injury (MTI), MTI with Restricted Duties, Lost Time Injury (LTI) or Fatality (FAT). Potential Serious Harm Incident: An Event that had a potential level 3 or above HSEH
Slide 49: Endnotes
Endnotes 29. Page: 28 Refer to APA ASX announcement 'APA signs project agreements for the development of the Sturt Plateau Pipeline in the Northern Territory' release on 17 December 2024. 30. Page: 29 Statements about ongoing distribution growth are not intended as distribution guidance. Any distrib
Slide 50: Andrew Nairn, Michael Cox
Andrew Nairn General Manager Investor Relations M: +61 437 166 497 E: ir@apa.com.au Michael Cox Head of Media Relations & Financial Communications M: +61 429 465 227 E: michael.cox@apa.com.au www.apa.com.au