Apa Group · ASX:APA
Apa — H1 FY2010 Earnings Presentation
32 slides from Apa's earnings presentation, Feb 24, 2010
Slide 1: Financial Results Half year ended 31 December 2009
Financial Results Half year ended 31 December 2009 24 February 2010
Slide 2: Result overview and strategic highlights
Result overview and strategic highlights Mick McCormack Managing Director and CEO 1H10 Result Presentation Æ 2
Slide 3: Ten years of consistent, strong performance
Ten years of consistent, strong performance Total securityholder returns 400 APA maintains its value • no asset write‐down 300 • no dilutive capital raising • no distribution cut 200 100 Distributions per security 35 31.0 cps 30 0 cents per security 25 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07
Slide 4: Strong cash generating business
Strong cash generating business 1H10 1H09 Change $ million $ million Operating cash flow 159.5 122.8 up 30% Operating cash flow per security (cents) 31.6 25.8 up 23% Interim distribution 15.75 15.0 up 5% Distribution payout ratio 50.2% 59.8% Revenue excluding pass‐through 343.3 357.0 down (4)% EBITD
Slide 5: Strong performance from continuing business
Strong performance from continuing business 1H10 1H09 Change $ million $ million Continuing Business performance Revenue excluding pass‐through 336.3 308.5 up 9% EBITDA 244.3 213.9 up 14% Continued organic growth of APA’s core business 1H10 Result Presentation Æ 5
Slide 6: Strategic and operational highlights
Strategic and operational highlights Capturing and developing the growth opportunities on APA’s asset portfolio available from the growing demand for gas – Committed capital expenditure of $250 million to expand gas transmission and distribution assets, including – Moomba Sydney Pipeline system ma
Slide 7: Financial performance
Financial performance Peter Fredricson Chief Financial Officer 1H10 Result Presentation Æ 7
Slide 8: Strong interim result
Strong interim result 1H10 1H09 Change $ million $ million Total revenue excluding pass‐through1 343.3 357.0 3.8 % Total revenue 495.9 490.0 1.2 % EBITDA 244.3 238.2 2.5 % EBIT 197.4 189.1 4.4 % Net interest expense (111.1) (121.9) 8.9 % Tax (22.7) (17.6) (28.8)% Profit 2 63.6 49.6 28.3 % Operating
Slide 9: History of strong performance
History of strong performance Operating cash flow EBITDA 250 $234 m 500 $444 m 200 400 $160 m $ million $ million 150 300 $244 m 100 200 50 100 0 0 01 02 03 04 05 06 07 08 09 0 01 02 03 04 05 06 07 08 09 0 1 1 20 20 20 20 20 20 20 20 20 1H 20 20 20 20 20 20 20 20 20 1H Distributions per security Ope
Slide 10: EBITDA growth across business segments
EBITDA growth across business segments 1H10 1H09 Change $ million $ million Gas Transmission and Distribution Queensland 51.6 50.5 2% New South Wales 53.1 44.0 21% Victoria 56.4 54.5 3% South Australia 0.8 0.8 ‐ Western Australia 51.0 48.7 5% Northern Territory 1.2 1.4 (14)% Gas Transmission and Dis
Slide 11: EBITDA growth across business segments
EBITDA growth across business segments 70 1H09 60 1H10 EBITDA split by segment EII contribution 50 Energy Investments Asset 6% $ million 40 Management 7% 30 20 GasTransmission and Distribution 10 87% 0 Queensland New South Victoria & South Western Asset Energy Assets sold to Wales Australia Australi
Slide 12: Major capital expenditure
Major capital expenditure 1H10 1H09 $ million $ million Regulated Victoria Transmission System 16.6 8.0 Includes northern expansion (1H10); Brooklyn Lara Pipeline (1H09) APA Gas Networks (Qld) 8.7 7.0 Includes southern network expansion 25.3 15.0 Major Projects Queensland expansion 8.4 9.9 Davenport
Slide 13: Fully covered distributions
Fully covered distributions On target to deliver at least 5% growth for FY2010 distribution 50 48.2 Operating cash flow per security 45 42.7 39.7 Distribution per security 40 37.6 38.2 35 cents per security 31.6 30 31.0 29.5 25 28.0 1H10 payout ratio 50% on 24.0 20 22.5 operating cash flow 15 1H
Slide 14: Prudent capital management
Prudent capital management Strong balance sheet Cash and committed undrawn facilities of $650 million at 31 December 2009 1H10 metrics – Gearing1 of 69.9%, reduced from 70.3% at 30 June 2009 – Interest Cover Ratio of 2.16x, increased from 2.13x at 30 June 2009 – Interest rate exposure fixed or h
Slide 15: Prudent capital management
Prudent capital management Secure long‐term debt portfolio supporting business growth Refinanced debt maturing in FY2010, plus raised headroom to refinance maturities in FY2011 – $1,365 million raised in 1H10 – USPP, bilateral loan, new syndicated facility Continuing implementation of balance sh
Slide 16: Operational performance and outlook
Operational performance and outlook Mick McCormack Managing Director and CEO 1H10 Result Presentation Æ 16
Slide 17: APA strategy firm
APA strategy firm Maximise value for securityholders Focusing on gas infrastructure assets in Australia’s growing gas market and enhancing APA’s portfolio of assets 4,061 PJ – Abundant domestic gas reserves – Increasing demand for natural gas, 69,708 PJ in particular for power generation – Gas use
Slide 18: Gas transmission and distribution
Gas transmission and distribution New South Wales Victoria and South Australia – Continuation of Moomba Sydney Pipeline – Commenced work on northern zone expansion mainline expansion program (5‐year) 60 50 – Commenced expansion of southern lateral for SESA Pipeline EBITDA 40 transport and storag
Slide 19: Development and growth opportunities
Development and growth opportunities APA’s portfolio provides strategic growth opportunities 1H10 Result Presentation Æ 19
Slide 20: Guidance for FY2010
Guidance for FY2010 Distribution guidance unchanged Distribution guidance – Interim distribution confirmed at 5% (yoy) – Barring unforeseen circumstances, anticipate delivering 5% growth in FY2010 – Full year distribution expected to be in line with previous years’ pay‐out ratio (60‐70%) EBITDA
Slide 21: Questions
Questions 1H10 Result Presentation Æ 21
Slide 22: Supplementary information
Supplementary information 1H10 Result Presentation Æ 22
Slide 23: APA profile
APA profile APA is Australia’s largest natural gas infrastructure business – Gas Transmission and Distribution: gas pipelines, interconnected gas storage facilities across Australia, and gas distribution networks in Queensland and New South Wales – Asset Management: provides asset management, oper
Slide 24: Financials: Key financial ratios
Financials Key financial ratios 1H10 1H09 Underlying operating cash flow (cps) 31.6 25.8 Weighted average securities on issue (m) 504.5 475.8 Payout ratio 50.2% 59.8% Earning per security (cps) underlying 12.7 11.9 reported 12.6 3.8 Interest cover ratio (times) 2.16 1.88 Gearing ratio 69.9% 69.7% To
Slide 25: Financials: Cash flow
Financials Cash flow 1H10 1H09 $ million $ million Change Operating cash flow (OCF) 159.5 122.8 29.9% Distributions (net of DRP) 50.6 43.7 Available operating cash flow 108.9 79.1 37.7% Operating cash flow per security (cents) 31.6 25.8 22.5% Distributions per security (cents) 15.75 15.0 5.0% Distri
Slide 26: Financials: Revenue analysis by business segment
Financials Revenue analysis by business segment 1H10 1H09 Change $ million $ million Gas Transmission and Distribution Queensland 76.8 71.8 7% New South Wales 64.3 54.3 18% Victoria 72.8 75.3 (3)% South Australia 1.0 1.4 (29)% Western Australia 72.5 69.1 5% Northern Territory 5.6 5.9 (5)% Gas Transm
Slide 27: Financials: Reconciliation – statutory and underlying
Financials Reconciliation – statutory and underlying 1H10 1H09 $ million $ million Change Statutory result Revenue 495.9 490.0 1% EBITDA 244.3 238.2 3% Profit (after significant items) 63.6 18.0 254% Underlying result Revenue 498.0 500.7 (1)% EBITDA 246.3 248.8 (1)% Profit 64.3 56.7 13% Adjustments
Slide 28: Financials: Total committed debt facilities
Financials Total committed debt facilities (as at 31 December 2009) Facility Facility amount Tenor 2008 Bilateral borrowings 1 $165 million July 2011 2009 Bilateral borrowing 2 $150 million August 2014 2007 Syndicated facility 2 $900 million June 2012 2009 Syndicated facility 3 $1,030 million 2 and
Slide 29: Regulatory update
Regulatory update APA’s major price regulated assets Regulatory resets over the next five years Regulatory resets are spread out over five years, with on average one reset per year – Next major asset reset ‐ Goldfields Gas Pipeline Revised Access Arrangement (AA) for the Goldfields Gas Pipeline su
Slide 30: APA asset and investment portfolio
APA asset and investment portfolio 1H10 Result Presentation Æ 30
Slide 31: Disclaimer
Disclaimer The information contained in this presentation is given without any liability whatsoever to Australian Pipeline Trust or APT Investment Trust or any of its related entities (collectively “APA Group”) or their respective directors or officers, and is not intended to constitute legal, tax o
Slide 32: Delivering Australia's energy
For further information contact Chris Kotsaris Delivering Australia’s energy Investor Relations, APA Group Tel: +61 2 9693 0049 E‐mail: [email protected] or visit APA’s website www.apa.com.au 1H10 Result Presentation Æ 32