APA on the hunt for major US acquisition as full-year earning hit top end of guidance

APA has delivered a result at the top end of its guidance and forecast a further lift this year.

APA chief Rob Wheals with former chief Mick McCormack who stepped down in July. John Feder/The Australian

Gas pipeline owner APA Group delivered at the top end of its annual earnings guidance and forecast a further lift this year as it continues to scan the US market for a major acquisition.

Earnings before interest, tax, depreciation and amortisation for 2018-19 increased 3.6 per cent to $1.573 billion, after it guided to $1.55bn to $1.575bn in February.

EBITDA in the 2020 financial year is expected to be in a range of $1.66bn to $1.69bn.

Net profit after tax rose 8.8 per cent to $288 million while the Sydney-based company declared a final dividend of 25.5c per share.

APA (APA), whose long-serving chief Mick McCormack stepped down last month, said it continues to look for potential US deal activity under new leader Rob Wheals noting its strategy head Ross Gersbach had relocated to North America to consider opportunities in that market.

APA under Mr McCormack outlined a bold plan to shell out up to $4bn for a US gas infrastructure business as a way of diversifying from its Australian asset base.

However, the mooted deal was sidelined last year after APA recommended a $13bn takeover offer from Hong Kong-listed CK Infrastructure, subsequently knocked back by the Australian government on national interest grounds.

“FY2019 was another good year for APA,” the company’s chairman Michael Fraser said. “We continued our substantial investment program and delivered another increase in Ebitda despite six months of uncertainty whilst the CKI consortium bid was in play.”

APA is among energy companies facing a set of aggressive regulatory reforms after Centre Alliance Senator Rex Patrick raised customer claims of “gouging” in the gas pipeline sector.

The Coalition is studying a raft of measures to ease high prices and supply shortfalls in the domestic gas industry including a east coast reservation policy and tweaks to the Australian Domestic Gas Security Mechanism.