This morning energy infrastructure business APA Group Limited (ASX: APA) released its results for the financial year ending June 30, 2019. Below is a summary of the results with comparisons to the prior year.
- Total revenue up 4.6% to $2,031m
- EBITDA of $1,574m, up 3.6%
- Net profit $288m, up 8.8%
- Operating cash flow per security 85.8cps
- Final distribution of 25.5cps, total dividends 47cps, up 4.4% (total franking credits 6.86cps)
- Total FY 2019 capex $581.3m
- Total drawn debt $9.1b
- EBITDA for FY20 in the range of $1,660m to $1,690m, net interest costs $505m to $520m
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Forecast for dividends of 50cps, franking credits dependent on tax paid by APA
Commenting on the outlook the APA CEO, Rob Wheals, said: "The levels of OCF we see in the business in FY2020 and beyond will enable us to continue funding expected growth capital expenditure of $300 to $400 million per annum over the next two to three years, whilst also prudently increasing distributions to Security holders."
Based on today's share price of $11.09 the gas transporter yields 4.5% and trades on 13x operating cash flow per security.
The payout ratio around 55% is also prudent given its capex commitments for growth and funds from operations to net debt ratio at around 10.8%, up from 10.7% this time last year.
APA remains a monopoly-like business with defensive profit and revenue streams, with the shares up 29% in calendar year 2019 largely on the back of falling cash rates in Australia.
Other monopoly type infrastructure businesses that might interest yield seekers on higher payout ratios include Transurban Group (ASX: TCL) and Sydney Airport Holdings Ltd (ASX: SYD).
