APA Group · ASX:APA
APA — FY2009 Earnings Presentation
37 slides from APA's earnings presentation, Aug 25, 2009
Slide 1: Financial Result Full year ended 30 June 2009
Financial Result Full year ended 30 June 2009 25 August 2009
Slide 2: Result overview and strategic highlights
Result overview and strategic highlights Mick McCormack Managing Director and CEO
Slide 3: Record full year result
Record full year result Strong underlying fundamentals Underlying results (1) 2009 2008 Change Operating cash flow (2) $ 233.6 million $ 192.1 million up 22% Operating cash flow (2) per security 48.2 cps 42.7 cps up 13% Full year distribution 31.0 cps 29.5 cps up 5% Distribution payout ratio 65.6 %
Slide 4: Strategic and operational highlights
Strategic and operational highlights Strong balance sheet Completed the establishment of Energy Infrastructure Investments – Achieved book value – Additional avenue for investments Strong support for 2010 debt refinancing – Syndicated facility, USPP, Macquarie loan – S&P ‘BBB’ credit rating Av
Slide 5: Strategic and operational highlights
Strategic and operational highlights Business growth Capacity expansion of gas transmission pipelines – Goldfields Gas Pipeline, Carpentaria Gas Pipeline, Moomba Sydney Pipeline Attractive investments – Central Ranges Pipeline – part of APA’s New South Wales pipeline system – Increase in Envestr
Slide 6: Consistent and predictable performance
Consistent and predictable performance Underlying operating cash flow Underlying EBITDA 250 $234 m 500 $459 m 200 400 $ million $ million 150 300 100 200 50 100 0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2001 2002 2003 2004 2005 2006 2007 2008 2009 Operating cash flow per security Distribution
Slide 7: Strong segment performance
Strong segment performance Strong EBITDA growth in gas transmission and distribution 120 EBITDA split by segment Energy investments Assets sold to EII 100 5% 5% Asset management 2008 7% 2009 80 Gas transmission $ million 60 and distribution 83% 40 EBITDA growth 20 Gas transmission and distribution
Slide 8: Financial performance
Financial performance Peter Fredricson Chief Financial Officer FY09 Results Presentation Æ 8
Slide 9: Record full year result
Record full year result (1) Underlying result 2009 (2) 2008 (3) Change $ million $ million Revenue 958.8 897.8 6.8% Revenue excluding pass‐through 687.4 614.9 11.8% EBITDA 458.7 430.5 6.5% EBIT 359.1 330.8 8.6% Net interest expense (213.0) (223.8) 4.8% Tax (35.9) (24.8) (45.0)% Underlying NPAT 110.1
Slide 10: Reconciling underlying result
Reconciling underlying result Adjusting for AIFRS impacts and significant items Reported Capital Complementary Significant Underlying (1) (2) $ million result distributions assets items result Revenue 944.4 10.4 4.0 ‐ 958.8 EBITDA 444.4 10.4 4.0 ‐ 458.7 NPAT 78.8 10.4 ‐ 20.9 110.1 Operating cash flo
Slide 11: Significant items
Significant items $ million 2009 Revaluation loss ‐ GasNet hedges (8.7) Establishment of EII after transaction costs (16.2) Settlement of acquisition related liabilities (1.5) Envestra underwriting fee 1.6 DUOS revenue accrual 3.8 Net income tax effect ‐ Total after tax cost (21.0) 2008 Revaluation
Slide 12: Segment performance
Segment performance EBITDA growth across business segments 2009 2008 Change $ million $ million Gas transmission and distribution Queensland 97.7 96.8 1% New South Wales 83.4 66.5 25% Victoria 98.4 75.2 31% South Australia 1.7 1.7 ‐ (1) Western Australia 100.0 93.5 7% Northern Territory 3.0 3.0 ‐ Ga
Slide 13: Strong cash flow generation
Strong cash flow generation Operating cash flow funds distributions and business growth 2009 2008 Change $ million $ million Underlying operating cash flow (OCF) 233.6 192.1 21.6% (1) Distributions (net of DRP) 95.1 82.0 Available operating cash flow 138.5 110.1 25.8% Underlying OCF per security (ce
Slide 14: Major capital expenditure
Major capital expenditure Low level ‘stay in business’ capex 2009 2008 $ million $ million Regulated Victoria Transmission System 21.3 79.1 Includes Brooklyn Lara Pipeline APA Gas Networks (Qld) 18.8 15.9 Includes southern network expansion 40.1 95.0 Major Projects Queensland expansion 28.8 4.1 Dave
Slide 15: Growing distributions
Growing distributions Achieved 5% growth guidance for 2009 full year distribution cents per security 31.0 FY09 payout ratio 66% (on 29.5 underlying OCF) 28.0 5.5 14.2 FY09 45.8% tax deferred 3.5 24.0 component 22.5 DRP continues at 2.5% discount 24.5 24.0 16.8 Tax deferred distribution Income
Slide 16: Prudent capital management
Prudent capital management Strong balance sheet Cash and committed undrawn facilities of $324 million at 30 June 2009 – $1,365 million committed and drawn facilities since 30 June 2009 FY2009 metrics – Improved gearing(1) of 70.3%, reduced from 72.0% at 30 June 2008 – Interest Cover Ratio of 2.1
Slide 17: Prudent capital management
Prudent capital management Secure long‐term debt portfolio supporting business growth Credit rating – S&P ‘BBB’ stable outlook – provides funding flexibility ‐ access diverse markets and broader range of financing options Repaid $150 million and $300 million Medium Term Notes in August 2008 and
Slide 18: Prudent capital management
Prudent capital management Balance sheet strategy Diversifying source of funds Extending term of debt facilities in line with long term nature of APA assets Debt maturity as at 30 June 2009 Debt maturity post refinancing FY2022 FY2011 FY2022 9% FY2020 8% 17% FY2010 3% FY2019 10% FY2019 28% 8% FY
Slide 19: Operational performance and outlook
Operational performance and outlook Mick McCormack Managing Director and CEO FY09 Results Presentation Æ 19
Slide 20: 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 Capturing revenue and operational synergies from APA’s significant asset base Pursuing opportunities that leverage APA’s knowledg
Slide 21: High quality gas infrastructure portfolio
High quality gas infrastructure portfolio Australia has an abundance of natural gas reserves – 60,300 PJ of 2P reserves, with half (29,700 PJ) in eastern Australia Increasing demand for natural gas – particularly gas fired power generation APA delivers gas from all major gas production sources
Slide 22: Gas transmission and distribution - East
Gas transmission and distribution ‐ East EBITDA 100 New South Wales 80 – Expansion of winter capacity first year on Moomba Sydney Pipeline 60 Central Ranges Pipeline – Revised tariff arrangements for transportation and storage services $m Central West Pipeline 40 Moomba Sydney Pipeline – Full year
Slide 23: Gas transmission and distribution - West
Gas transmission and distribution – West EBITDA Western Australia 120 – Completion of two compressor stations on Goldfields Gas Pipeline, 100 increasing capacity by 20% 80 Telfer/Nifty Pipeline – New contracts and increased throughput on the Goldfield Gas NGV WA Pipeline, offset by one mine closur
Slide 24: Asset management and energy investments
Asset management and energy investments EBITDA Asset management 40 – Provision of asset management and operational services to Victorian metering APA’s energy investments, under long term contracts $m 20 Short term contract Long term contract – Seamless transition of asset management and operation
Slide 25: Unique internally operated business
Unique internally operated business People and safety APA personnel by function Fully operating business for two years with 1,100 operating, commercial and support personnel Support APA personnel operating from 57 locations across the country Commercial Extensive in‐house skills and experience
Slide 26: Development and growth opportunities
Development and growth opportunities Gas transmission and distribution ‐ East – Northern expansion on the Victorian Transmission System – Increase Moomba Sydney Pipeline winter capacity in line with contracts – Installation of automated multi‐directional hub at Young, providing flow and storage fl
Slide 27: Guidance and priorities for FY2010
Guidance and priorities for FY2010 Guidance Distribution guidance – at least 5% growth in 2010 Priorities Developing growth opportunities in APA’s asset portfolio that support investment grade rating Continue capital management discipline Improving business operations FY09 Results Presentati
Slide 28: Questions
Questions FY09 Results Presentation Æ 28
Slide 29: Supplementary information
Supplementary information FY09 Results Presentation Æ 29
Slide 30: 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 31: Financials: Key financial ratios
Financials Key financial ratios 2009 2008 Comments Underlying operating cash flow (cps) 48.2 42.7 Weighted average securities on issue (m) 485.1 450.3 Payout ratio 65.6% 71.2% Earning per security (cps) underlying 22.7 18.3 reported 16.2 14.9 Interest cover ratio (times) 2.13 1.86 Gearing ratio 70.3
Slide 32: Financials: Revenue analysis by business segment
Financials Revenue analysis by business segment 2009 2008 Change $ million $ million Revenue Gas transmission and distribution Queensland 144.3 137.4 5% New South Wales 107.9 82.1 31% Victoria 126.4 102.0 24% South Australia 1.9 1.9 3% Western Australia (1) 139.0 127.9 9% Northern Territory 17.4 18.
Slide 33: Financials: Total committed debt facilities
Financials Total committed debt facilities Facility Facility amount Tenor As at 30 June 2009 2008 Bilateral borrowings (1) $165 million July 2011 2003 US private placement $496 million 7, 10, 12 and 15 year tranches maturing Sept 2010, 2013, 2015 and 2018 2007 Syndicated facility $900 million June 2
Slide 34: Regulatory update: APA's major price regulated assets
Regulatory update APA’s major price regulated assets Regulatory resets over the next five years 2009 2010 2011 2012 2013 Goldfields Gas Pipeline APA Gas Network Roma Brisbane Pipeline Victorian Transmission System Current regulatory period Next regulatory period Regulatory resets are spread out ov
Slide 35: APA's gas infrastructure business
APA’s gas infrastructure business FY09 Results Presentation Æ 35
Slide 36: 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 37: Delivering Australia's energy
Delivering Australia’s energy For further information visit APA Group’s website www.apa.com.au FY09 Results Presentation Æ 37