APA to raise $500m to fund growth projects

APA group CEO Mick McCormack. Pic: Hollie Adams

APA Group, one of the largest owners of energy infrastructure in Australia, moved to raise $500 million as it pushes ahead with its largest ever investment in growth projects.

The company (APA) has committed itself to $1.2 billion in expansion projects, building out infrastructure in the country to meet power demand.

APA said it was launching a 1-for-17 entitlement offer, offering about 65.5 new shares priced at $7.70 each. That marks a discount to the $8.26 closing price the day before.

News of the capital raising came as APA said it remained on track to meet earnings guidance for the year through June and as it looked ahead to additional revenue from investment in projects now under construction to start flowing through from the 2019 fiscal year.

Net profit declined 11 per cent to $124 million in the six months through December from $139.8 million a year earlier.

First-half earnings before interest, depreciation and amortisation — the measure favoured by the company — were 0.6 per cent lower at $755.3 million. That as revenue ticked up 0.8 per cent to $1.19 billion from $1.18 billion a year earlier.

“The interim results reflect the steady outlook for fiscal 2018 that we signalled to the market in our guidance at the fiscal 2017 results, and the sizeable infrastructure build in front of us across the next two years,” chairman Michael Fraser said.

APA has said it expects annual EBITDA of between $1.48 billion and $1.51 billion.

The company plans to pay out 21 cents per security to shareholders for the half year, a 2.4 per cent increase on last year.

In addition to more than 15,000km of natural-gas pipeline connecting suppliers with markets around Australia and a network connecting gas supplies to homes and businesses, APA owns or has stakes in gas-storage facilities, power stations and wind farms.

The institutional leg of APA’s capital raising is due to close tomorrow, with the bookbuild for any shortfall set for the next day. A trading halt on the shares is scheduled to be lifted on Monday.

Dow Jones Newswires