APA Group · ASX:APA
APA — Australian Pipeline Trust — Shareholder Meeting (October 2003)
34 slides from APA's shareholder meeting presentation, Oct 21, 2003
Slide 1: Annual Information Meeting
Australian Pipeline Trust Annual Information Meeting George Bennett Chairman Sydney, 21 October 2003
Slide 2: Agenda
Agenda ! Results and Operating Review ! Strategic Issues ! Acquisition Opportunities ! Regulatory Environment ! Gas Supply to south east Australia ! Growth and industry rationalisation 2
Slide 3: Full Year Results in Summary
Full Year Results in Summary $M 41.05 40.0 37.1 30.0 2003 Net profit after tax: +10.63% from pcp. 20.0 10.0 0.0 2002 2003 NPAT (after minorities) 3
Slide 4: Results in Summary: Revenue Breakdown
Results in Summary Full Year Revenue Breakdown $M Total Revenue 255.4 271.9 300 14.7 250 13.9 Other Revenue 67.99 200 61.0 Other Pipeline Revenue 10.9 13.5 150 Pipeline Revenue-SCP Equity Contribution 100 169.5 175.7 Pipeline Revenue - Transportation 50 0 4 2002 2003
Slide 5: Results in Summary: Revenue by Pipeline
Results in Summary Revenue by Pipeline $M 104.4 MSP - Moomba to Sydney 102 100 RBP - Roma to Brisbane 84 CGP - Carpentaria Gas 80 77.9 AGT - Amadeus Gas Trust GGT - Goldfields Gas Transmission 60 MWP - Midwest Pipeline 40 26.1 19.8 26.4 24.1 20 13.5 10.9 4.4 4.3 0 M SP AGT RBP CGP GGT M W P 2003 200
Slide 6: Results in Summary
Results in Summary Year ended 30 June 2003 2002 %Change $M $M EBITDA 137.81 132.22 4.2 Depreciation & Amortisation 24.1 26.3 8.4 Net Interest Expense 48.6 46.8 3.8 Profit before Tax 65.13 59.1 10.21 Tax 23.8 21.7 9.58 Minorities 0.3 0.3 - Net Profit after Tax 41.05 37.1 10.63 Earnings per unit (cent
Slide 7: Results in Summary: Cash Flow
Results in Summary Cash Flow Year ended 30 June 2003 2002 $M $M Net cash flow from operating activities 90.59 85.09 Net cash used in investing activities 41.04 48.78 Distributions to unitholders 52.46 51.63 7
Slide 8: Full Year Distribution Maintained
Results in Summary Full Year Distribution Maintained Cents per unit 2003 2002 2001 Total Distribution 21.5 21.5 21.0 Income Distribution 17.0 15.5 12.5 - Franked Component - - 1.83 - Unfranked Component 17.0 15.5 10.6 Capital Distribution 4.5 6.0 8.5 ! Income component steadily increasing - now 79%
Slide 9: Operational Review: Moomba to Sydney Pipeline
Operational Review Moomba to Sydney Pipeline ! Agreement with AGL to transport increased volumes of gas in Moomba to Sydney (MSP), above those already contracted beyond 2006. 9
Slide 10: Operational Review: Queensland
Operational Review Queensland ! Roma to Brisbane Pipeline – Looping stage 6, commissioned October 2002. – Innovative and interruptible firm haulage contracts with existing customers. ! Carpentaria Gas Pipeline – Additional compressor, commissioned December 2002. 10
Slide 11: Operational Review: Western Australia
Operational Review Western Australia ! Acquisition of minority interests in Goldfields Gas Transmission Pipeline in April 2003 – now an effective 48.5%. ! Midwest Pipeline running on reduced throughput – temporary shutdown of the vanadium mine at Windamurra. 11
Slide 12: Governance Arrangements
Governance Arrangements ! Currently unitholders do not have right to elect directors of Australian Pipeline Limited. ! Proposal to give unitholders power to elect directors other than: – two directors nominated by AGL – one director nominated by Petronas ! Best practice - enhances unitholders’ right
Slide 13: Strategic Issues
Strategic Issues ! To continue to grow profitability, APA needs to: – expand its asset base – increase capacity – diversify its business mix ! Northern gas to south east Australia. ! Regulatory reform. 13
Slide 14: Diversifying & Growing our Asset Base
Strategic Issues Diversifying & Growing our Asset Base ! Moomba to Sydney Pipeline (MSP) provides 37% of total revenue of APA. ! Focus on strategies to improve the contracted position of the MSP beyond 2006. ! Continue to lift throughput in our Queensland and Western Australian pipelines. ! Acquire
Slide 15: Acquisition of new assets and minorities
Strategic Issues Acquisition of new assets and minorities ! EPIC Energy - sales process commenced Epic West – Dampier to Bunbury Pipeline Epic East – South West Queensland Pipeline – Moomba to Adelaide Pipeline – South East Pipeline – Pilbara Pipeline System ! Duke Energy pipeline assets may be up f
Slide 16: Improving APA's Ability to Raise Equity
Strategic Issues Improving APA’s Ability to Raise Equity ! Distribution Reinvestment Plan – New units issued at a 2.5% discount to market – No brokerage or other fees are payable. ! Equity Raising Options – Placement via bookbuild – Rights issue – Jumbo placement – Combination of any of the above. !
Slide 17: Complementary Assets
Strategic Issues Complementary Assets ! Power Generation ! Gas production infrastructure including compression metering and drying plants. ! Other pipeline transmission assets: – Oil pipelines – Water pipelines. 17
Slide 18: Gas Supply to South East Australia
Gas Supply to South East Australia ! Do we have the appropriate settings? ! Why isn’t there more gas producer on producer competition? ! The nation needs a cohesive national energy policy and workable regulatory regime. 18
Slide 19: Regulatory Review
Regulatory Review ! ACCC final decision on our Moomba to Sydney Pipeline disappointing. ! Minister’s decision on revocation still pending. ! Review of the National Gas Access Code due June 2004. 19
Slide 20: Australia's Leading Transporter of Natural Gas
Australia’s Leading Transporter of Natural Gas 20
Slide 21: Jim McDonald, Managing Director
Jim McDonald Managing Director
Slide 22: Gas supply to south east Australia
22 Gas supply to south east Australia
Slide 23: Gas Supply: The Debate
Gas Supply to South East Australia The Debate ! Australia has an abundance of natural gas, but not close to existing markets. ! ABARE study indicates shortfalls in supply from existing gas fields by early next decade. ! Customers are concerned about availability and prices from existing gas supplies
Slide 24: Gas Supply: Options
Gas Supply to South East Australia Options ! Coal Bed Methane is an emerging viable alternative - provides short term relief. ! Gas from the Otway basin and Gippsland - only part of the solution. ! Timor Sea gas development - unlikely to have sufficient commercial gas supplies for domestic Australia
Slide 25: Papua New Guinea Pipeline Project
Gas Supply to South East Australia Papua New Guinea Pipeline Project ! PNG producers continue to aggregate a market for their gas. ! Proposed pipeline to services south east Australian markets via Mt Isa, Moomba and Central Queensland markets. ! Potential delays due to complexity of project. ! The P
Slide 26: North West Shelf Gas
North West Shelf Gas ! W.A Producers and Government beginning to canvass this option. ! Trans-continental pipeline will have focus should PNG Project not proceed. 26
Slide 27: Regulatory Environment
Regulatory Environment Review of existing Regulatory Issues ! APA is still awaiting Minister’s determination on coverage of the Moomba to Sydney Pipeline. ! ACCC final determination has little impact on Moomba to Sydney Pipeline until after 2006. ! ACCC final determination differs from APA submissio
Slide 28: Regulatory Environment
Regulatory Environment Review of existing Regulatory Issues ! National Competition Council recommends that Queensland State Agreement is “not effective”. ! QLD tariffs regulated by State Agreement. ! Existing contracted arrangements on Queensland pipelines at risk. ! Both the Queensland Government a
Slide 29: Productivity Commission Review
Productivity Commission Review ! Regulatory regime is affecting the gas industry and dampening the development of “greenfields” projects. ! Review of the Gas Access Regime by the Productivity Commission is welcome. ! APA and industry representatives will be lodging submissions. ! Final report is due
Slide 30: Growth Strategy
Growth Strategy ! APA seeks growth from four areas:- − incremental growth on our existing pipelines. − acquisitions of minority interests in our pipelines. − acquisition of other pipelines through industry rationalisation. − investment in complementary businesses. 30
Slide 31: Growth Strategy: Incremental Growth
Growth Strategy Incremental Growth ! Natural gas demand continues to grow at over 3% annually. ! APA actively markets in Queensland, Western Australia, Northern Territory and on the Moomba to Sydney Pipeline. ! APA seeks opportunities to position natural gas as an alternative to coal-fired power. 31
Slide 32: Growth Strategy: Acquisitions
Growth Strategy Acquisitions ! Minority Interests – Minority interests in Goldfields Gas Transmission considering a sale. ! Industry rationalisation - Epic “first cab on the rank”. ! Greenfields - Australia requires a major new pipeline to bring northern gas to the south east. ! New pipelines mitiga
Slide 33: Summary
Summary ! APA has major challenges in the future. ! Gas supply to south east Australia must be addressed. ! Productivity Commission Review is important. ! APA is actively involved in the emerging industry rationalisation. ! APA focused on profitability and growth strategy. ! APA will continue to be
Slide 34: We Deliver
We Deliver www.pipelinetrust.com.au
Australian Pipeline Trust — Shareholder Meeting (October 2003) on 6ix