Australia’s biggest gas pipeline company has posted a “solid” full-year result amid an energy supply shock.
APA Group confirmed on Wednesday underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose 3.9 per cent to $1.69 billion in the year to June 30.
Tariffs surged, particularly for the Wallumbilla gas pipeline in Queensland, which realised a more than 7.5 per cent increase since January 1, and stronger demand in the Victorian transmission system saw the Orbost gas processing plant ramp up.
Free cash flow was up 19.8 per cent to $1.08 billion, the company said in a statement to the Australian Securities Exchange.
APA, which delivers around half of Australia’s gas, also updated its climate commitments with a new 2030 pledge to reduce emissions by 30 per cent in gas transmissions, cut emissions intensity by 35 per cent in power generation, and reduce emissions it can control in electricity transmission.
CEO and Managing Director Rob Wheals said APA had delivered another “solid” result in a year that highlighted the critical role gas transmission plays in energy security.
“Gas power generation and APA’s existing gas infrastructure has stepped up to help fill the electricity supply gap across Australia’s east coast,” Mr Wheals said.
Gas and gas infrastructure will play a critical role as the energy transition accelerates, including as the “perfect complement” to firm renewable generation, he said.
A proposed $270 million expansion of gas transportation capacity on the East Coast grid will link Queensland to southern markets and help address forecast winter gas shortfalls, APA said.
APA also operates 3500km of gas transmission pipelines in WA to the iron ore, nickel and gold-mining industries, and provides pipeline and storage for Perth and the southwest, without the price spike seen on the east coast.
Other key projects progressed included the $460 million Northern Goldfields Interconnect, Mica Creek Solar Farm and the acquisition of 100 per cent Basslink senior secured debt.
APA on Monday announced Mr Wheals would step down next month after 14 years with the company, and ditched plans for a US expansion to instead focus on the Australian market.
Chief Financial Officer Adam Watson will be acting CEO and APA’s General Manager of Investor Relations Kynwynn Strong will be appointed as acting CFO.
APA declared a partly franked 28 cents per security final distribution, bringing the full-year distribution to 53 cents per security, in line with guidance.
APA said the distribution in fiscal 2023 was anticipated at 55 cents per security, up 3.8 per cent.