APA Group

APA Details

Latest Business Updates: APA Group (ASX: APA) owns and operates energy infrastructure assets. Its range of business activities includes facilitating energy infrastructure, gas storage, and processing.

• Acquisition Proposal: On 21 September 2021, APA sent an indicative, non-binding, unsolicited and conditional proposal to acquire AusNet Services Limited (ASX: AST). Suggested commercials include a combination of 0.0878 per share of APA stapled securities and cash.
• Operations Update: On 2 September 2021, APA published an operations update. Key highlights of the update include –
  • Processing rates of Orbost Gas Processing Plant remains stable in August 2021 with an average rate of 41 TJ/day (Q4FY21: 33 TJ/Day)
  • Sole gas sales remain at maximum daily contract quantiles at an average gas sales volume of 59 TJ/day (Q4FY21: 54 TJ/day)
  • Commissioning commenced for Athena Gas Plant.

FY21 Financial Performance

Annual Financial Performance; Analysis by Kalkine Group

Key Risks

• Regulatory Risk: APA holds significant investments in portfolio assets that are subject to regulatory interventions.
• Refinancing Risk: Significant debt redemption activities may call for funding risk or refinancing risk at favourable terms.

Outlook

• Distribution Mandate: FY22 distribution per security is expected to incline by 3.9%, resting at 53.0 cps.
• Potential in Cash Position: Cash Inflows are expected to surge amid changing energy market dynamics and the surged use of flexible supply arrangements.
• Capex Update: Organic growth capex is expected to exceed $1.3 billion, which will be spread over FY22 to FY24.

Stock Update

Over the last month, the stock of APA went down by ~15.010%. The stock made a 52-weeks’ low and high of $8.350 and $11.150, respectively. FY21 fundamentals remain at elevated levels with declining financial risk, stable FFO-to-net debt, and revenue support. APA’s proposal to acquire AST may magnify the business scale and unveil synergies. Moreover, the operational updates of August 2021 manifest favourable production levels. The stock trades at a current market price of $8.550, up by ~1.063% as of 22 September 2021.

APA Daily Technical Chart, Data Source: REFINITIV

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.