APA Group - Annual Financial Results for FY24
APA (APA) Share Update August 2024 Tuesday 27th
APA Group Reports Significant Annual Financial Results
APA Group (ASX: APA) has released its annual financial results for the year ended 30 June 2024, showcasing a remarkable increase in profit after tax and steady revenue growth.
Instant Summary:
- Revenue increased by 5.2% to $3,064 million.
- Profit after tax including significant items surged by 247.7% to $998 million.
- Profit after tax excluding significant items fell by 58.5% to $119 million.
- Free cash flow slightly increased by 0.3% to $1,073 million.
- Earnings per security including significant items rose by 54.6¢ to 78.9¢.
- Final distribution proposed at 29.50¢ per security.
Financial Performance Overview
APA Group has reported a strong financial performance for the fiscal year ending 30 June 2024. Total revenue, including share of profits from equity accounted investments, increased by 5.2% to $3,064 million, up from $2,913 million in the previous year. This growth was driven by solid performance across the company's diverse portfolio of gas, electricity, solar, and wind assets.
Profit after tax including significant items saw a substantial increase of 247.7%, reaching $998 million compared to $287 million in FY23. This significant rise was primarily due to the remeasurement of APA Group’s pre-existing 88.2% interest in the Goldfields Gas Pipeline as the company moved to full ownership of this asset.
Key Financial Metrics
Despite the impressive overall profit increase, profit after tax excluding significant items dropped by 58.5% to $119 million. Free cash flow remained stable, showing a slight increase of 0.3% to $1,073 million. Earnings per security, including significant items, rose by 54.6¢ to 78.9¢, while earnings per security excluding significant items fell by 14.9¢ to 9.4¢.
Distribution and Capital Management
The company has proposed a final distribution of 29.50¢ per security, bringing the total distribution for FY24 to 56.00¢ per security. This represents a modest increase of 1.8% from the previous year. APA Group also reactivated its Distribution Reinvestment Plan (DRP), which operated at a 0% discount for the interim distribution and at a 1.5% discount for the final distribution.
Operational Highlights
APA Group continued to deliver operational excellence with a focus on safety and sustainability. The company reported zero fatalities and a 35% decrease in the Total Recordable Injury Frequency Rate (TRIFR). Additionally, APA made significant progress in integrating the Pilbara Energy System and Basslink assets, further strengthening its position in the energy infrastructure sector.
The substantial increase in profit after tax, driven by significant items, is likely to positively impact APA Group's stock price. However, the decline in profit after tax excluding significant items may raise concerns among investors about the underlying performance. The steady revenue growth and stable free cash flow are positive indicators of the company's financial health.
Investor Reaction:
Analysts are expected to have mixed reactions to APA Group's financial results. While the significant increase in profit after tax is a strong positive, the decline in profit excluding significant items may be a point of concern. Investors will be closely watching the company's strategic initiatives and future performance to gauge long-term potential.
Conclusion:
Investors should consider the overall strong financial performance of APA Group while keeping an eye on the underlying metrics. The company's strategic response to the mixed results will be crucial in maintaining investor confidence. Staying informed about APA Group's future developments and market conditions will be essential for making informed investment decisions.