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APA Delivers Solid 1H24 Results With Growth in Earnings, Distributions and Free Cash Flow
Published on
22 February 2024
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Leading Australian energy infrastructure business, APA Group (ASX:APA), today announces its financial results for the half year ended 31 December 2023 (1H24).

In 1H24 APA delivered growth in earnings, distributions and free cash flow and completed the Pilbara Energy System (Pilbara Energy) acquisition (Alinta), a key milestone in the execution of APA’s remote grid growth strategy.

Key highlights

  • 1H24 Underlying EBITDA up 5.8% to $930 million (1H23: $879 million), underpinned by inflation linked tariff escalation and solid performances from recent acquisitions, including a six-month contribution from Basslink and a two-month contribution from Pilbara Energy which were both in line with their business cases.
  • Statutory net profit after tax (including significant items) of $1,049 million (1H23: $191 million) was driven by the acquisition of Pilbara Energy. Significant items of $975 million were recorded due to the re-measurement of APA’s previously held interest of 88.2% in Goldfields Gas Transmission Pipeline (GGTP) in accordance with accounting standards partly offset by acquisition and stamp duty costs of $76 million incurred on the acquisition of Pilbara Energy.
  • Free Cash Flow1 up 12.8% to $546 million (1H23: $484 million) due to increased earnings as well as the timing of a cash receipt in 1H23 (received at the start of January 2023 rather than the end of December 2022). This was partially offset by higher stay in business capital expenditure. Free Cash Flow was 4.0% higher excluding the timing impact of the cash receipt.
  • $2.2 billion in capital investment, supporting safe and reliable operations, the Pilbara Energy acquisition and the delivery of organic growth projects, including the Northern Goldfields Interconnect pipeline, the East Coast Grid expansion (Stage 2), and the Kurri Kurri Lateral Pipeline.
  • 1H24 interim distribution of 26.5 cents per security, up 1.9% (1H23: 26.0 cents per security). FY24 distribution guidance is reaffirmed at 56.0 cents per security, forecast to be up 1.8% on FY232 In light of the recent Pilbara Energy acquisition, Underlying EBITDA guidance is being provided for FY24 of $1,870m to $1,910m3
  • Pilbara Energy and Basslink, both recently acquired, have delivered earnings in line with their acquisition business cases and their integrations remain on track.
  • Continued progress on sustainability priorities, including progress with Climate Transition Plan interim targets and goals and the release of our inaugural Reconciliation Action Plan.

1 Free Cash Flow is Operating Cash Flow adjusted for strategically significant transformation projects, acquisition and integration costs, payroll remediation payments to employees, less stay-in-business (SIB) capex. SIB capex includes operational assets lifecycle replacement costs and technology lifecycle cost.

2 Distribution guidance is subject to asset performance, macroeconomic factors, regulatory changes as well as timing of distributions from non- 100% owned assets, with distributions to be determined at the Board’s discretion. It does not take into account the impact of any potential acquisitions or divestments by APA and any associated funding arrangements.

3 FY24 Underlying EBITDA guidance has been provided by APA in light of the recent Pilbara Energy acquisition. APA’s Market Disclosure Policy states that APA does not ordinarily provide earnings guidance or interest guidance, however the ongoing provision of guidance will be considered by the Board at a future time. Underlying EBITDA guidance is subject to asset performance, macroeconomic factors and regulatory changes. It does not take into account the impact of any potential acquisitions or divestments by APA. For further information regarding revenue and cost considerations please see the 2023 November Investor Day presentation released on ASX on 15 November 2023, page 30. Underlying EBITDA guidance is not a predictor or guarantee of future performance and is subject to uncertainties and risks. Please see the Disclaimer on page 2 of the Investor Presentation released on the ASX on 22 February 2024.