REPORTING SEASON: APA Group (APA)
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Figure 1: APA Group 12 month chart
APA Group (APA) profit and future guidance both underwhelmed
– APA Group (APA) Australia’s largest natural gas infrastructure business, reported net profit for the 2015 fiscal year of $559.9Million, up 62.9% year on year (Y/Y). APA operates roughly $19Billion worth of energy pipelines and assets within Australia. The company has been busy buying and selling assets this year and therefore this report is based on APA’s normalised results which compare current ‘like-for-like’ assets. Normalised profit increased by 2.1% which was slightly below the markets’ expectations.
– Important costs to note include the US$4.6Billion acquisition of the Wallumbilla Gladstone Pipeline (WPG) which was finalised on June 3, 2015. APA’s earnings from continuing businesses increased to $822.2Million which was in-line with APA’s guidance for the year – this figure excluded the $784Million gross profit from the share sale of Australian Gas Networks Ltd (formerly known as Envestra) which occurred back in August 2014.
– Today APA announced changes to the way in which it reports its depreciation and amortisation resulting in an expected FY16 EBITDA of between $1,275-1,310Million slightly below previous market expectations, despite the additional returns expected from its new WGP business. APA Group said it expects FY16 Growth CAPEX of between $300 -$400Million which will be used expand its growing stable of assets. APA said its FY16 distributions will be at least equal to the $0.38 it paid in FY15. APA group had already declared a final distribution of $0.205 per security to be paid on the 16th September 2015.