The APA Group (ASX: APA) share price is in focus today after the company posted a 6.4% lift in underlying EBITDA to $2,015 million and raised distributions for FY25, underpinned by a strong performance in gas transmission and storage.
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What did APA Group report?
- Underlying EBITDA up 6.4% to $2,015 million (FY24: $1,893 million)
- Total statutory revenue (excluding pass-through) rose 4.7% to $2,713 million
- Underlying EBITDA margins increased to 74.2%
- Free Cash Flow of $1,083 million, slightly up on FY24
- Statutory net profit after tax (NPAT) $129 million (8.4% higher than prior period, excluding significant items)
- FY25 distribution lifted 1.8% to 57.0 cents per security (cps); FY26 guidance of 58.0 cps
What else happened in FY25?
APA Group made solid progress on its growth strategy, highlighted by $655 million invested in new projects like the Atlas to Reedy Creek Pipeline and the Port Hedland Solar and Battery project. The business also benefited from a full year of earnings from the Pilbara Energy System and ramped up targeted cost reduction initiatives, keeping corporate cost growth below inflation and setting a $50 million cost-out target for FY26.
Regulatory outcomes were favourable, including the Australian Energy Regulator's decision not to regulate the South West Queensland Pipeline and the conversion of Basslink into a regulated asset from July 2026, pending further decisions. APA's climate transition plan was updated, showing continued resilience to energy transition and physical climate risks.
What did APA Group management say?
Commenting on the result, APA CEO and Managing Director, Adam Watson, said:
Across FY25 we continued to progress major growth opportunities, with a focus on disciplined capital allocation and the prioritisation of opportunities that will deliver the best returns for our securityholders. We have taken steps to simplify our business, delivering corporate cost growth below inflation and announcing a cost-out target of approximately $50 million for FY26. This combined with strong ongoing performance of the business will help us deliver securityholder returns. Our three-year ~$2.1 billion organic growth pipeline will be funded from existing balance sheet capacity and the DRP.
What's next for APA Group?
Looking ahead, APA is guiding for underlying EBITDA of $2,120 million to $2,200 million in FY26, representing growth at the mid-point of around 7.2%. The company expects to increase the annual distribution to 58.0 cps, while continuing to invest in a $2.1 billion organic development pipeline. Management remains focused on disciplined capital allocation, cost control, and progressing growth projects that bolster future earnings.
APA also plans to leverage recent regulatory decisions and its climate transition plan to further strengthen its long-term energy infrastructure portfolio and support securityholder returns.
APA Group share price snapshot
Over the past twelve months, APA Group shares have trailed the market, rising 7% compared to a 11% increase for the S&P/ASX 200 Index (ASX: XJO).
