APA +7.72%: Announced a solid first-half 2025 result, broadly inline with expectations and re-affirmed FY25 guidance. Importantly, they stressed they had the financial capacity to fund $1.8bn in growth capex over the next three years, i.e. they are not cum-raise as many feared;
- Revenue A$1.62 billion, +6.9% y/y inline with consensus.
- 1H25 Earnings (Ebitda) of $1,015bn a shade ahead of $999m consensus.
- 1H25 Dividend of 27cps
Importantly, they reconfirmed FY25 Earnings (Ebitda) forecast of $1.96-2.02bn and FY25 distribution $0.57 per share.
From an operational perspective, cost growth has reduced to below inflation and the firm is progressing, enterprise-level cost reduction initiatives to deliver efficiencies. Management were firm that steady cash-flow of ~$560mn and balance sheet capacity can fund their expansion plans comfortably – yield shouldn’t suffer due to costs, and we think there will be a continued re-rating of the stock. Today is the positive catalyst for a period of stronger performance, not just a one-day bounce, in our view
- We own the stock in both our Active Growth and Active Income Portfolios.
MM remains long and bullish APA
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