Apa Group · ASX:APA
Apa — FY2012 Earnings Presentation
37 slides from Apa's earnings presentation, Aug 22, 2012
Slide 1: Financial Results Year ended 30 June 2012
Financial Results Year ended 30 June 2012 22 August 2012
Slide 2: Result overview and strategic highlights
Result overview and strategic highlights Mick McCormack Managing Director and CEO 2012 Results Presentation 2
Slide 3: Developing opportunities, creating value
Developing opportunities, creating value Well positioned in a growing market – Expanding our energy infrastructure portfolio across Australia in line with increasing demand for gas and energy Track record of consistent financial performance – Remain a low risk but growing business, with revenue
Slide 4: Another solid result
Another solid result 2012 2011 Change $ million $ million Operating cash flow 336 290 up 16 % Revenue excluding pass-through (1) 758 720 up 5% EBITDA (2) 526 492 up 7% Profit (2) 131 109 up 20 % Operating cash flow per security (cents) 52.5 52.6 down (0)% Distribution per security (cents) 35.0 34.4
Slide 5: Strong performance across the business
Strong performance across the business Increase due to: ↑ Full year contribution from asset expansions – Young Wagga lateral (November 2010) and Moomba Sydney Pipeline (ongoing) ↑ General tariff increase across most assets ↑ Increased contribution from Energy Investments – Envestra, Hastings Diversi
Slide 6: Strategic and operational highlights
Strategic and operational highlights Optimal use of assets: contracted and regulated assets near full capacity – Expansions supply additional capacity to meet customer requirements – ~ $300 million per annum over the next two years for committed and visible capital projects Diamantina Power Statio
Slide 7: Strategic and operational highlights
Strategic and operational highlights Delivering on growth strategy Major projects progress – Mondarra Gas Storage Facility expansion – Diamantina Power Station development Takeover offer for Hastings Diversified Utilities Fund Mondarra Gas Storage Facility, WA National customer system and oper
Slide 8: Sustainability reporting
Sustainability reporting Health and safety – Long-term safety goal of Zero Harm - program of continuous improvement – Decrease of LTIFR (1) to 2.2, down from 6.2 – National APA health and safety system launched – “Safeguard” Natural gas and carbon reduction – Carbon tax – direct cost impact expe
Slide 9: Financial performance
Financial performance Peter Fredricson Chief Financial Officer 2012 Results Presentation 9
Slide 10: Diversified EBITDA
Diversified EBITDA 2012 2011 FY 2012 EBITDA $ million $ million Change (continuing business) Energy Infrastructure Queensland 79.6 71.7 11.0 % Energy Investments New South Wales 113.1 101.3 11.7 % 8.1% Victoria & South Australia 123.1 115.9 6.2 % Asset Management Qld Western Australia & Northern Ter
Slide 11: Solid, consistent result
Solid, consistent result 2012 2011 Change $ million $ million EBITDA before significant items 535.5 489.6 9.4 % Depreciation and amortisation (110.4) (100.4) 10.0 % EBIT 425.1 389.2 9.2 % Net interest expense (234.3) (247.1) (5.2)% Tax (50.4) (35.9) 40.6 % Net profit 140.3 108.9 28.8 % Significant i
Slide 12: Energy Infrastructure: Queensland
Energy Infrastructure Queensland Roma Brisbane Pipeline expansion – Completion of expansion project, including new revenue contracts, commenced August 2012 Dalby compressor station – Access Arrangement – AER’s final decision (10 August 2012) includes 8.75% tariff increase APA Gas Network – Sell
Slide 13: Energy Infrastructure: New South Wales
Energy Infrastructure New South Wales Moomba Sydney Pipeline expansion – 4th year in 5-year expansion program – Young compressor upgrade – Fully contracted – gas transportation and Young compressor station and control centre storage services Young to Wagga lateral – Full year of operation – comm
Slide 14: Energy Infrastructure: Victoria & South Australia
Energy Infrastructure Victoria & South Australia Decreased gas flow due to milder weather and reduced gas use in generation – 6.5% decrease in gas flows to 230 PJ Euroa compressor station construction Victorian Transmission System – Northern augmentation stage 2 Sunbury looping project – Compl
Slide 15: Energy Infrastructure: Western Australia & Northern Territory
Energy Infrastructure Western Australia & Northern Territory Goldfields Gas Pipeline – Commenced two pipeline expansions – Merits review process completed Mondarra Gas Storage Facility Mondarra Gas Storage Facility – First year construction of expanded facility Emu Downs wind farm and Amadeus
Slide 16: Asset Management and Energy Investments
Asset Management and Energy Investments Asset Management Reduction in customer contributions Additional asset management – GDI (EII) Energy Investments Increased investment returns – Envestra Meter calibration Increased investment holding – HDF Additional investment returns – GDI (EII) 201
Slide 17: Major capital expenditure
Major capital expenditure (1) 2012 Description of 2012 major projects 2011 $ million $ million Growth capital expenditure Regulated Victoria Transmission System 35.1 Northern augmentation project, Sunbury looping 33.4 APA Gas Networks (Qld) 8.4 Includes southern network expansion 16.1 43.5 49.5 Majo
Slide 18: Fully covered distributions
Fully covered distributions 2012 distribution in line with guidance (at least 34.4 cps) 60 51.9 52.6 52.5 2012 distribution 48.2 payout ratio(1) of 67.0% 50 (2011: 65.7%) 42.7 40 cents 34.4 35.0 30 32.8 29.5 31.0 20 10 0 (1) Distribution payout ratio: 2008 2009 2010 2011 2012 total distribution paym
Slide 19: Capital management
Capital management Cash and committed undrawn facilities of $1,106 million at 30 June 2012 . Metrics 30 Jun 2012 30 Jun 2011 Gearing (1) 65.0 % 66.2 % Interest cover ratio 2.48 times 2.03 times Average interest rate applying to drawn debt 7.39 % 7.47 % Interest rate exposure fixed or hedged 80.9
Slide 20: Capital management
Capital management Refinancing program focused on extending debt maturity, diversifying funding sources and reducing borrowing costs 2012 Results Presentation 20
Slide 21: Capital management: funding beyond July 2012
Capital management Funding APA beyond 1 July 2012 . Sources $m Uses $m Existing cash and undrawn facilities 1,106 Cash component of revised HDF bid 336 Subordinated notes net proceeds 460 Repay existing drawn Epic facilities 1,375 New 1-year bank commitments 300 Transaction completion costs 69 N
Slide 22: Capital management strategy
Capital management strategy Managing balance sheet to maintain minimum investment grade credit rating metrics – Standard & Poor’s BBB; Moody’s Baa2 Refinancing program focused on extending debt maturity, diversifying funding sources and reducing borrowing costs – Next refinancing obligation in S
Slide 23: Outlook and guidance
Outlook and guidance Mick McCormack Managing Director and CEO 2012 Results Presentation 23
Slide 24: Sustainable long term growth and value
Sustainable long term growth and value Growth catalysts – Carbon reducing policies 1,123 PJ 17,384 PJ – Gas supply developments – New market participants 72,559 PJ – Resources projects 39,750 PJ Pipeline Energy Pipeline System Enhancing our portfolio 139 PJ – Optimal gas delivery between gas sou
Slide 25: APA's off-market takeover offer for HDF
APA’s off-market takeover offer for HDF Rationale – Retained Epic Energy pipelines form a natural fit with APA’s assets – Enhanced gas transmission pipeline network – benefits APA securityholders and customers Process update – Takeover offer announced (14 December) – cash and scrip offer for HDF
Slide 26: Delivering value for securityholders
Delivering value for securityholders Five years of growth – Operating cash flow CAGR of 17.4%(1) – EBITDA CAGR of 12.1% (1) – Total securityholder return of 92% Indexed to 100 from 30 June 2007 to 30 June 2012 Source: APA based on IRESS data (1) Compound annual growth rate (CAGR) calculated from 2
Slide 27: Outlook and guidance
Outlook and guidance Outlook Continued construction and development of expansion projects Progress takeover offer for HDF Guidance EBITDA – expected within a range of $540 million to $550 million – Compared with $515 million (1) for FY12 – Based on APA’s continuing business, excluding HDF asse
Slide 28: Supplementary information
Supplementary information 2012 Results Presentation 28
Slide 29: Financials: Key financial ratios
Financials Key financial ratios 2012 2011 Operating cash flow per security (cents) 52.5 52.6 Weighted average securities on issue (million) 639.7 551.2 Payout ratio 67.0 % 65.7 % Earning per security (cents) 20.4 19.7 Interest cover ratio (times) 2.48 2.03 Gearing ratio 65.0 % 66.2 % Total assets ($
Slide 30: Financials: Cash flow
Financials Cash flow 2012 2011 $ million $ million Change Operating cash flow 335.6 290.0 8.3 % Distributions (net of DRP) 163.6 130.9 Available operating cash flow 172.0 159.2 (3.3%) Operating cash flow per security (cents) 52.5 52.6 1.4 % Distributions per security (cents) 35.0 34.4 5.0 % Distribu
Slide 31: Financials: Revenue analysis by business segment
Financials Revenue analysis by business segment 2012 2011 $ million $ million Change Energy Infrastructure Queensland (1) 112.2 107.7 4.2% New South Wales 138.4 126.7 9.3% Victoria & South Australia 163.4 153.3 6.6% Western Australia & Northern Territory 195.9 157.5 24.4% Energy Infrastructure total
Slide 32: Total committed debt facilities at June 2012
Financials Total committed debt facilities at 30 June 2012 Facility Drawn Facility amount amount Tenor $ million(1) $ million(1) 2011 Bilateral borrowings (2) 300 157 3 years maturing July and August 2014 2011 Bilateral borrowing 150 0 5 years maturing October 2016 2011 Syndicated facility (3) 1,450
Slide 33: Regulatory update
Regulatory update APA’s major price regulated assets Regulatory resets over the next five years Calendar year 2012 2013 2014 2015 2016 Roma Brisbane Pipeline Victorian Transmission System Goldfields Gas Pipeline Current regulatory period Next regulatory period Roma Brisbane Pipeline access arran
Slide 34: APA Group profile
APA Group profile APA is Australia’s largest natural gas infrastructure business – Energy Infrastructure: natural gas pipelines and interconnected gas storage facilities across Australia, and the Emu Downs wind farm in Western Australia – Asset Management: provision of asset management, operating
Slide 35: APA asset and investment portfolio
APA asset and investment portfolio APA Group assets and investments 21 Energy Infrastructure Asset Management 17 Queensland Commercial and/or operational services to: (1) Roma Brisbane Pipeline - Envestra Limited 24 21 NORTHERN 21 (2) Carpentaria Gas Pipeline - GDI (EII) - Allgas TERRITORY 25 (3) Be
Slide 36: Disclaimer
Disclaimer This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) the responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) (APA Group). Summary information This presentation contains summary information about
Slide 37: 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