By Ben Weir
Australian gas pipeline company APA Group has posted an 8.8 per cent rise in net profit, fuelled by contracts in Queensland, its investments in renewable energy platforms and a favourable exchange rate on revenues received from pipeline contracts.
Net profit for the year to June 30 came in at $288 million on $2.03 billion in revenue, compared to $265 million in profit in 2018, the Sydney-based company said in a statement to the ASX on Wednesday morning.
And it predicted another year of growth ahead. Earnings before interest, tax, depreciation and amortisation rose 3.6 per cent to $1.57 billion, and are expected to improve to between $1.66 billion and $1.69 billion in the current financial year, APA said.
APA has invested in several new renewable energy plants as well as gas pipelines.Credit: James Davies
Chief executive Robert Wheals said the company had undertaken the largest capital investment in its history over the past three years, investing $1.4 billion in new projects, which gave it 260 kilometres of additional pipelines and expanded its capacity to generate power with renewable energy assets.
Now it was beginning to reap the benefits, Mr Wheals said.
"We are at a pivotal point in the industry, supporting the transition to a cleaner energy future and at a time when there is greater needed than ever to generate and transport more gas supply," he said.
Mr Wheals, who took over from founder and chief executive Mick McCormack after he retired in July, said the company would continue to look for a US acquisition.
The planned expansion comes after APA's proposed $13 billion takeover by Hong Kong-based infrastructure firm CKI was blocked in 2018 by the federal government over concerns it would mean the majority of the country's gas pipelines would be in the hands of a single foreign company.
"In a year characterised by uncertainty around the CKI proposal, APA's solid results demonstrate the resilience of our business and the robustness of our growth strategy," he said.
The company will pay a final dividend of 25.5 cents a share, 3.66 cents of it franked, taking its payout for the year to 47 cents a share. It forecast dividends "in the order of 50 cents" a share for the current financial year.
APA's share price closed 2.8 per cent higher at $11.15.