APA Group (APA) H2 2024 earnings summary

Executive summary

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

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

• Recent acquisitions (Pilbara Energy, Basslink, East Coast Grid expansion) are integrated and generating expected returns, with strategic partnerships accretive to free cash flow.

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

• Safety performance improved, workforce diversity increased, and sustainability initiatives advanced.

Financial highlights

• Segment revenue (excluding pass-through) up 9.7% to $2,582m year-over-year.

• Free cash flow was flat year-on-year at $1,073m (+0.3%), as EBITDA uplift was offset by higher interest and tax payments.

• Net profit after tax (excluding significant items) was $119m, down from FY23 due to higher depreciation, amortization, interest, and tax.

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

• Distribution payout ratio increased to 67.0%.

Outlook and guidance

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

• Corporate cost growth in FY25 expected to be similar to FY24; higher debt and tax payments to offset EBITDA growth.

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