APA Group (APA) H2 2024 earnings summary

Executive summary

• Underlying EBITDA rose 9.7% to $1,893 million, driven by inflation-linked tariff escalation, recontracting, and new asset contributions, notably Pilbara Energy and Basslink.

• Statutory net profit after tax surged 247.7% to $998 million, mainly due to Pilbara Energy acquisition and remeasurement gains.

• Distribution per security increased 1.8% to 56.0 cents, with FFO/Net Debt at 10.3%, exceeding the 9.5% target.

• Strong organic growth pipeline with $833 million invested in growth projects and over $1.8 billion in future opportunities.

• Strategic partnerships and asset acquisitions, including Pilbara Energy and Goldfields Gas Pipeline, are accretive to free cash flow and value.

Financial highlights

• Revenue (excluding pass-through) grew 7.9% to $2,591 million year-over-year.

• Underlying EBITDA increased 9.7% to $1,893 million; reported EBITDA up 3.0% to $1,736 million.

• Free cash flow was stable at $1,073 million (+0.3%), with distribution payout ratio at 67.0%.

• NPAT excluding significant items fell 58.5% to $119 million, impacted by higher depreciation, interest, and non-cash impairments.

• Significant items included Pilbara Energy acquisition, GGP remeasurement, and Moomba Sydney Ethane Pipeline impairment.

Outlook and guidance

• FY25 underlying EBITDA guidance: $1,960–2,020 million; distribution guidance: 57.0 cents per security (+1.8%).

• Guidance subject to asset performance, macroeconomic factors, and regulatory changes.

• Higher interest costs and increased tax payments expected in FY25, impacting free cash flow, but franking of dividends anticipated to increase over time.

• Free cash flow expected to remain flat in FY25, with growth resuming as new assets contribute and tax/interest normalize.