REPORTING SEASON: APA Group (APA)

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Figure 1: APA Group 12 month chart

 

APA Group (APA): Spending over the last year led to higher earnings

 Australia’s largest natural gas infrastructure business, APA Group (APA) released a slightly stronger than expected half year result. APA surprised the market by lifting its future guidance while leaving its distribution payout at $0.175

 APA’s Energy Infrastructure business saw total revenue growth of 13.8% helped by asset expansions in most states. Every state listed double digit revenue increases except NSW which fell 2.9% due to a small decline from the Moomba Sydney Pipeline. Asset Management revenue fell over 31% due to seasonal client payments and Energy Investments fell 12% mainly due to costs incurred in the completion, commissioning of the Diamantina Power Station and the exit of its investment in Envestra from August 2014.

 In December 2014, APA entered into an agreement with BG Group to acquire the 543km QCLNG Pipeline for US$5 billion. To fund this, APA raised around $1.8 billion of new equity via a rights issue and entered into a US$4.1 billion syndicated bridge facility agreement.

 APA revised its guidance for FY15, APA now expects normalised EBITDA (earnings growth) inclusive an estimated contribution from the QCLNG Pipeline to be in the range of $816 to $873 million and a slightly higher 2H15 distribution payment with the FY15 total at least $0.3625 a share.

 APA will pay $0.175 interim distribution to shareholders on18 March 2015. The distribution payout ratio for the current period is 55.6%

 

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Juliana Roadley, Market Analyst,