adding value at apa
For more detailed information about APA please refer to our 1H FY2020 Investor Pack.
Compelling value proposition
APA has a strong track record of delivering investors sustainable growth, security and value since listing in 2000. A reliable business strategy, innovating for growth and caring about how we conduct our operations are the attributes that combine to deliver superior securityholder value year after year, regardless of market cycles.
As at 31 December 2019, APA's total securityholder return (TSR) since listing on the ASX is 2,241%, a compound annual growth rate (CAGR) of 17.2%.
Since listing, APA has never reduced distributions and our policy is to fund distributions out of operating cash flow therefore not compromising our ability to grow through continued investment in the business.
Consistent, reliable business strategy
Our strategy has not changed materially over the years with a focus on serving our customers and solving their energy challenges in a manner that generates sustainable growth opportunities and returns. Our strategy is as follows:
- Deliver services our customers value consistent with our Customer Promise
- Continue to strengthen asset and stakeholder management, development and operational capabilities
- Our growth focus is to enhance our portfolio of:
— gas transmission pipelines
— power generation: gas-fired and renewable energy
— midstream energy infrastructure assets, including gas storage and gas processing
- Explore growth opportunities in our core business of gas transmission and distribution in North America
- Maintain APA’s financial strength
APA’s history of consistently delivering solid financial results and ~$21 billion portfolio of interconnected energy assets are proof of the strength of this strategy.
We have a low risk approach to business, with the large majority of our revenue currently derived from long term take or pay contracts with highly creditworthy counterparties and from regulated assets. Pipeline expansions and extensions are also generally underpinned by long term customer contracts or approved access arrangements. Growth opportunities and investments are funded with a mix of free cash flow, debt and equity, and in a way that maintains our investment grade credit ratings of BBB/Baa2.
Low risk business model:
APA had just 6 employees, a portfolio of $1 billion of assets and a market capitalisation of less than half a billion dollars when we listed in June 2000. Now, we are Australia’s leading energy infrastructure business. We now own and/or operate around $21 billion of assets, have a permanent employee base of 1,800 people throughout Australia and are one of Australia’s top 50 listed companies with a market capitalisation of $13.4 billion (as at 17 February 2020).
Our 15,000 plus kilometre gas transmission pipeline network connects every major gas supply source in Australia with commercial markets. We are particularly proud of the interconnected gas grid system that spans over 7,600 kilometres on Australia’s east coast providing seamless and flexible transportation and other services for customers.
APA has three types of growth that we pursue – organic growth in response to our customers’ needs; mergers and acquisitions, particularly assets that are/can be connected to our assets; and large, greenfield projects. We maintain our balance sheet to ensure that we are able to fund these growth opportunities within the parameters that see us consistently retain our BBB and Baa2 investment grade credit ratings.
Commitment to safety
Safety and the way we conduct ourselves in the communities where we operate will always be high priorities for APA. We aim for zero harm for our employees, contractors and the communities and environments where our infrastructure is located. Our assets have long life spans and so we are fully aware of our responsibilities as long term members of and contributors to those communities.
Looking after our people and assets improves service reliability, safety, operational efficiency and extends the economic life of our assets. We do this by:
- Enhancing infrastructure operations and maintenance;
- Consolidating pipeline control and monitoring operations to ensure high reliability;
- Improving asset maintenance management systems and processes across the portfolio; and
- Adoption of global industry best practice.
 Past results are not an indication of future performance. Investors should discuss their personal investment circumstances with their chosen financial adviser prior to committing to investment in APA.
Total reportable injury frequency rate (TRIFR) is measured as the number of lost time and medically treated injuries sustained per million hours worked. Data includes both Employees and Contractors.