Oz APA Cuts Earnings Guidance

Australian gas infrastructure firm APA Group April 21 trimmed its earnings guidance owing to delays in the commissioning of the Orbost gas processing plant in Victoria.

That guidance range for earnings before interest, tax, depreciation and amortisation (EBITA) for the year to June 30, has now been cut to between A$1.635bn-$1.655bn (US$1.03bn-US$1.04bn), from the original range of A$1.66bn-A$1.69bn, APA said.

The Orbost plant has been exporting processed gas into the Eastern gas pipeline since late March. APA said it has not yet completed the performance test required to meet commercial operations under the agreement with Cooper Energy. The Orbost plant is being upgraded by APA to process gas from Cooper-operated Sole gas field.

“Consequently, revenues have been delayed resulting in the following updated EBITDA guidance for FY2020. Distribution guidance for the full year to 30 June 2020 remains unchanged,” it said.

APA’s FY2020 growth capital expenditure is expected to complete at around A$250mn. “Whilst this is somewhat below recent average annual run rates in respect of growth capex, beyond FY2020 APA has visibility of as much as A$1bn of organic growth projects that remain in active discussion with customers for delivery over the next two to three years,” it said.

CEO Rob Wheals said APA’s business, excluding the commercial impact resulting from the delayed start of commercial operations of the Orbost plant, "continues to perform well and in line with expectations".