APA Group FY24 Financial Results and Future Outlook
APA (APA) Share Update August 2024 Tuesday 27th
APA Group Announces FY24 Financial Results
APA Group (ASX: APA) has released its financial results for the fiscal year ending 30 June 2024, showcasing a robust performance and strategic growth initiatives.
Instant Summary:
- Underlying EBITDA of $1,893 million, a 9.7% increase from FY23.
- Distribution per security (DPS) of 56.0 cents, up 1.8% from FY23.
- FFO/Net Debt ratio of 10.3%, exceeding the target of 9.5%.
- Successful integration of Pilbara Energy and Basslink acquisitions.
- Ongoing investments in renewable energy and infrastructure projects.
FY24 Financial Performance
APA Group reported an underlying EBITDA of $1,893 million for FY24, reflecting a 9.7% growth compared to the previous fiscal year. This increase was driven by inflation-linked tariff escalations, recontracting, and contributions from new assets such as Pilbara Energy and Basslink.
The distribution per security (DPS) for FY24 was 56.0 cents, representing a 1.8% increase from FY23. The company's FFO/Net Debt ratio stood at 10.3%, surpassing the target of 9.5%, indicating strong capital management and financial health.
Strategic Growth Initiatives
APA Group made significant strides in its growth strategy by successfully integrating the Pilbara Energy and Basslink acquisitions. These acquisitions have been accretive to free cash flow per security in their first full year of ownership.
The company also progressed several organic growth opportunities, including the construction of the Port Hedland Solar Farm and Battery Energy Storage System (BESS) project, and the commencement of the Kurri Kurri lateral pipeline construction. APA signed a design and development agreement for twin gas pipelines to connect CS Energy’s proposed Brigalow Peaking Power Plant.
FY25 Outlook
Looking ahead, APA Group has provided an underlying EBITDA guidance for FY25 in the range of $1,960 million to $2,020 million. The company expects continued EBITDA growth from new assets, including the full-year contribution from Pilbara Energy and initial contributions from the Port Hedland Solar and BESS project and the Kurri Kurri lateral pipeline.
APA Group remains committed to its strategy of disciplined operations and investments to maximize value for customers, communities, and securityholders. The company plans to invest approximately $1.8 billion in organic growth opportunities over the next three years.
The solid financial performance and strategic growth initiatives are likely to have a positive impact on APA Group's stock. The increase in underlying EBITDA and DPS, along with the successful integration of new acquisitions, demonstrates the company's strong operational and financial management. Investors may view APA's ongoing investments in renewable energy and infrastructure projects as a positive indicator of future growth and sustainability.
Investor Reaction:
Analysts have responded positively to APA Group's FY24 financial results, noting the strong growth in underlying EBITDA and the successful integration of new acquisitions. The company's strategic focus on renewable energy and infrastructure investments is seen as a prudent approach to securing long-term growth and sustainability.
Conclusion:
Investors should closely monitor APA Group's progress on its strategic growth initiatives and the impact of its ongoing investments in renewable energy and infrastructure projects. The company's strong financial performance and positive outlook for FY25 make it an attractive option for investors seeking stable returns and growth potential.