Key Highlights

  • Underlying EBITDA increased 8.3% to $2.183 billion, exceeding the midpoint of FY26 guidance.
  • Free Cash Flow rose 3.2% to $1.118 billion, while statutory NPAT increased 81.4% to $234 million.
  • Enterprise-wide cost reductions reached $80 million, exceeding the original $50 million target.
  • FY26 distributions increased 1.8% to 58.0 cents per security, with FY27 guidance set at 59.0 cents.

APA Group (ASX: APA) edged +0.15% higher to $10.12 today as the energy distributor delivered cost reductions and distribution growth. The company reported higher Earnings and free cash flow for the year ended 30 June 2026, supported by inflation-linked Tariff escalation, newly commissioned Assets and cost reduction initiatives. Underlying EBITDA increased 8.3% to $2,183 million from $2,015 million in FY25, exceeding the midpoint of the company's previous guidance.

Underlying EBITDA Margin increased to 77.9%, up 370 basis points, while free cash flow rose 3.2% to $1,118 million from $1,083 million. Statutory Revenue excluding pass-through revenue increased 1.9% to $2,764 million. Statutory net profit after tax rose 81.4% to $234 million from $129 million. At 10:17 am on 20 August 2026, APA shares were trading at $10.07, down 0.30%, or $0.03, on the day.

Cost reductions exceed target

APA delivered $80 million of enterprise-wide cost-out initiatives during FY26, exceeding its $50 million target. Corporate costs declined 20.6%, while the company said the cost program has established an annualised run-rate of $100 million for FY27.

The group continued to simplify its operating model during the year through the divestment of Networks and GDI, changes to corporate functions, lower external expenditure and streamlining of information technology project delivery and lifecycle management.

The higher EBITDA margin reflects the contribution from these measures alongside asset performance and inflation-linked tariff increases.

Growth Investment expands pipeline

APA invested $546 million in growth projects during FY26. These included the Brigalow Peaking Power Plant and associated pipeline, the East Coast Gas Grid expansion and the Sturt Plateau Pipeline.

The company's organic growth development pipeline increased to approximately $3.5 billion from $3.0 billion. APA said the existing Balance Sheet and Distribution Reinvestment Plan provide capacity to fund this pipeline while maintaining distributions and Credit metrics.

The company also announced a final investment decision for the Sybella Creek Solar Farm and Battery Energy Storage System in Mount Isa, Queensland. The project is intended to operate under a long-term energy Supply agreement with Evolution Mining and forms part of APA's remote-grid strategy.

Free cash flow increases despite higher costs

Free cash flow increased 3.2% to $1.118 billion, supported by operating cash generation despite higher tax and interest costs. The result provides an important source of funding for the company's Capital program and distributions.

APA also strengthened its balance sheet through a $1.5 billion hybrid and senior unsecured Debt raise. Changes to ratings metrics from S&P Global and Moody's Ratings also reduced the relevant Funds From Operations to Net Debt threshold.

FY26 distribution rises

APA's Board declared a final FY26 distribution of 30.5 cents per security, taking total FY26 distributions to 58.0 cents per security, up 1.8% from 57.0 cents in FY25.

The final distribution is expected to be paid on 16 September 2026. The Distribution Reinvestment Plan will operate for the final distribution at a 1.5% discount.

The distribution comprises different profit and capital components from APA Infrastructure Trust and APA Investment Trust. The company has now increased annual securityholder distributions for 22 consecutive years.

FY27 earnings guidance points to further growth

APA expects FY27 underlying EBITDA of between $2.260 billion and $2.340 billion. At the midpoint, this represents approximately 5.4% growth from FY26.

The outlook incorporates inflation-linked tariff escalation, contributions from the Sturt Plateau Pipeline, the conversion of Basslink to a regulated asset and the annualised benefit from the enterprise-wide cost reduction program.

FY27 distributions are expected to increase to 59.0 cents per security, representing growth of 1.0 cent, or 1.7%, from FY26. APA said the distribution outlook balances funding requirements for its organic growth pipeline with the maintenance of investment-grade credit ratings.

Conclusion

APA Group's FY26 results show higher underlying EBITDA, free cash flow, statutory profit and securityholder distributions, while the company exceeded its cost-out target and expanded its organic growth pipeline to approximately $3.5 billion. Revenue growth was more modest at 1.9%, and higher tax and interest costs partly offset operating cash generation. For FY27, APA expects further EBITDA growth and a higher distribution, supported by new assets, regulated infrastructure contributions and recurring cost savings, while continued Capital Investment remains central to its growth strategy.