Apa Group · ASX:APA
Apa — H1 2012 Earnings Presentation
33 slides from Apa's earnings presentation, Feb 22, 2012
Slide 1: Financial Results Half year ended 31 December 2011
Financial Results Half year ended 31 December 2011 22 February 2012
Slide 2: Result overview and strategic highlights
Result overview and strategic highlights Mick McCormack Managing Director and CEO 1H 2012 Results Presentation 2
Slide 3: Delivering on strategy
Delivering on strategy Optimised our energy infrastructure portfolio – Continued work on capacity expansion projects – pipelines and gas storage – New capacity expansions announced – Goldfields Gas Pipeline – Gas-fired energy development for Mt Isa – Sell down of APA Gas Network (Allgas) – Takeove
Slide 4: Solid result
Solid result 1H12 1H11 Change $ million $ million Revenue excluding pass-through (1) 400 370 up 8% EBITDA before significant items(2) 289 254 up 14% Profit before significant items (2) 76 63 up 21% Operating cash flow (3) 157 170 down (8%) Operating cash flow per security (3) (cents) 24.7 31.0 down
Slide 5: Operational and strategic highlights
Operational and strategic highlights Assets operating at full capacity – contracted and regulated – Customer requirements for additional capacity is supplied by organic expansions Xstrata – Work progressed on expansion projects – Mondarra Gas Storage mine Facility and pipelines in Queensland, New
Slide 6: Strategic highlights
Strategic highlights APA off‐market offer for Hasting Diversified Utilities Fund (HDF) Rationale – HDF Epic Energy pipelines form a natural fit with APA’s assets – Enhanced gas transmission pipeline network – benefits securityholders (HDF and APA) and customers Process update – Takeover offer an
Slide 7: Financial performance
Financial performance Peter Fredricson Chief Financial Officer 1H 2012 Results Presentation 7
Slide 8: Solid financial performance
Solid financial performance 1H12 1H11 Change $ million $ million Total revenue excluding pass-through (1) 399.6 369.8 8.1 % Total revenue 530.5 554.7 (4.4%) EBITDA (2) 278.9 263.9 5.7 % EBIT 222.6 219.0 1.7 % Net interest expense (131.7) (124.5) (5.7%) Tax (24.9) (24.2) (3.0%) Profit (2) 66.0 70.2 (
Slide 9: Significant items - reconciliation
Significant items - reconciliation 1H12 1H11 $ million $ million EBITDA 278.9 263.9 Significant item Profit on sale of Allgas, less transaction costs (10.4) Share of EII2 investment allowance benefit 9.8 EBITDA before significant items 289.3 254.0 Profit after tax 66.0 70.2 Significant items after t
Slide 10: EBITDA by business segment
EBITDA by business segment 1H12 1H11 1H12 EBITDA Change by business segment $ million $ million Energy Infrastructure Energy Investments Queensland 61.0 54.9 11.2 % Asset 8% Management New South Wales 60.2 52.9 13.7 % 5% Qld Victoria & South Australia 66.8 62.0 7.8 % 21% Western Australia & Northern
Slide 11: Energy Infrastructure: Queensland
Energy Infrastructure Queensland 70 EBITDA ($m) Roma Brisbane Pipeline $61.0m – Expansion project progressing – compression 60 and looping – Repairs on easement following 2011 50 summer floods Diamantina Power Station, Mt Isa – joint 40 development of – 17-year energy supply agreements with 30 M
Slide 12: Energy Infrastructure: New South Wales
Energy Infrastructure New South Wales 70 EBITDA ($m) Continued Moomba Sydney Pipeline $60.2m mainline expansion program 60 – 4th year in 5-year expansion program 50 Increased northern gas flow – Victoria to New South Wales 40 First full 6 months additional capacity 30 available from Young Wagg
Slide 13: Energy Infrastructure: Victoria & South Australia
Energy Infrastructure Victoria & South Australia 70 EBITDA ($m) $66.8m Lower gas volumes due to milder weather impact, offset by annual tariff increase 60 – 6% decrease in gas flows to 125 PJ 50 Capital works continued for additional peak capacity and supply security 40 – Euroa compressor statio
Slide 14: Energy Infrastructure: Western Australia & Northern Territory
Energy Infrastructure Western Australia & Northern Territory 70 EBITDA ($m) $64.5m Mondarra Gas Storage Facility 60 – Commenced construction of surface works Emu Downs wind farm 50 – first six months of ownership 40 Amadeus Gas Pipeline – first six months under ownership and new contract 30
Slide 15: Asset Management and Energy Investments
Asset Management and Energy Investments Asset Management 30 EBITDA ($m) Sell down of APA Gas Network (Allgas) into joint venture GDI (EII) 20 $14.0m – APA remains manager and operator of the gas network under a 10-year agreement 10 (plus 2 x 5-year options) Higher level of customer contributions
Slide 16: Fully covered distributions
Fully covered distributions On target to deliver distribution guidance 60 51.9 52.6 48.2 1H12 distribution payout 50 ratio(1) of 69.2% (2) 42.7 39.7 Distribution components: 40 8.42 cents profit distribution 34.4 8.58 cents capital distribution 30 cents 32.75 29.5 31.0 24.7 28.0 20 17.0 10 (1) D
Slide 17: Major capital expenditure for 1H12
Major capital expenditure for 1H12 1H12 1H11 Description of 1H11 major projects $ million $ million Growth capital expenditure Regulated Victoria Transmission System 13.2 Northern augmentation project, Euroa compression 13.5 APA Gas Networks (Qld) 8.4 Includes southern network expansion 11.6 Major P
Slide 18: Capital management
Capital management Cash and committed undrawn facilities of $835 million at 31 December 2011 – Includes funds released from sale of APA Gas Network (Allgas) . Metrics 31 Dec 2011 30 Jun 2011 Gearing (1) 63.4 % 66.2 % Interest cover ratio 2.19 times 2.03 times Average interest rate applying to dr
Slide 19: 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 20: Outlook and guidance
Outlook and guidance Mick McCormack Managing Director and CEO 1H 2012 Results Presentation 20
Slide 21: Sustainable long term growth
Sustainable long term growth Strategic imperatives Optimising our energy infrastructure portfolio – Enhance, extend, protect or complement APA’s existing portfolio – Expansions, acquisitions and new 1,184 PJ developments – Maximise long term growth 3,816 PJ Maintaining secure operations and 74,257
Slide 22: Developing real growth opportunities
Developing real growth opportunities Capital projects with secure, long term returns Diamantina Power Station Goldfields Gas Pipeline Joint development of 242 MW Capacity expansion – gas-fired generation compressor stations and compressor upgrades Mondarra Gas Storage Roma Brisbane Pipeline Facility
Slide 23: Guidance for FY 2012
Guidance for FY 2012 No change to full year EBITDA and distribution guidance EBITDA – expected within the range of $530 million to $540 million Distribution – at least equal to FY2011 total distributions per security, that is at least 34.4 cents per security Interest cost guidance revised Net
Slide 24: Supplementary information
Supplementary information 1H 2012 Results Presentation 24
Slide 25: Financials: Key financial ratios
Financials Key financial ratios 1H12 1H11 Operating cash flow per security (1) (cents) 24.7 31.0 Weighted average securities on issue (million) 637.2 547.8 Distribution payout ratio (1) 69.2% 53.6% Earning per security (cents) 10.4 12.8 Interest cover ratio (times) 2.19 2.06 Gearing ratio 63.4% 70.1
Slide 26: Financials: Cash flow
Financials Cash flow 1H12 1H11 $ million $ million Operating cash flow 157.1 169.8 Distributions (net of DRP) 79.3 57.6 Available operating cash flow 77.8 112.2 Operating cash flow per security (cents) 24.7 31.0 Distributions per security (cents) 17.0 16.5 Distribution payout ratio 69.2% 53.6% Capit
Slide 27: Financials: Revenue analysis by business segment
Financials Revenue analysis by business segment 1H12 1H11 $ million $ million Change Energy Infrastructure Queensland 86.2 83.3 3.5% New South Wales 71.9 64.3 11.8% Victoria & South Australia 85.3 79.6 7.2% Western Australia & Northern Territory 96.7 77.4 24.9% Energy Infrastructure 340.1 304.6 11.7
Slide 28: Financials: Total committed debt facilities
Financials Total committed debt facilities at 31 December 2011 Facility Facility amount(1) Tenor 2011 Bilateral borrowings $300 million(2) 3 years, maturing in July 2014 (3 x $75m) and August 2014 ($75m) 2011 Bilateral borrowings $150 million 5 years, maturing in October 2016 2007 Syndicated facilit
Slide 29: 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 Regulatory resets are spread out ov
Slide 30: 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 – Asset Management: provision of asset management, operating and maintenance services to the majority of APA’s
Slide 31: 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 (2) Carpentaria Gas Pipeline - GDI (EII) - Allgas TERRITORY 21 (3) Berwy
Slide 32: 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 abou
Slide 33: Delivering Australia's energy
For further information contact Delivering Australia’s energy Chris Kotsaris Investor Relations, APA Group Tel: +61 2 9693 0049 E-mail: [email protected] or visit APA’s website www.apa.com.au