APA’s Underlying EBITDA Climbs 7.6% to $1.09 Billion, Growth Pipeline Nears $3 Billion
APA Group has reported robust half-year results, boosting its organic growth pipeline to nearly $3 billion and reaffirming its full-year guidance amid ongoing cost reductions and strategic divestments.
- Underlying EBITDA rises 7.6% to $1.09 billion
- Organic growth pipeline expanded from $2.1 billion to ~$3 billion
- Statutory net profit after tax climbs to $95 million
- Cost reduction initiatives cut corporate expenses by 13.6%
- FY26 EBITDA and distribution guidance reaffirmed with expectations to exceed midpoint
Strong Financial Momentum
APA Group has delivered a solid financial performance for the half year ended 31 December 2025, with underlying EBITDA increasing by 7.6% to $1,092 million. This growth was underpinned by inflation-linked tariff escalations, contributions from new assets such as the Kurri Kurri Lateral Pipeline and the Port Hedland Solar and Battery Project, as well as disciplined cost management that saw corporate expenses fall by 13.6% compared to the previous corresponding period.
Statutory net profit after tax rose significantly to $95 million, up from $34 million in the prior half, reflecting the combined impact of EBITDA growth and lower net interest expenses despite increased depreciation from new assets. Free cash flow remained steady at $556 million, demonstrating the company’s ability to generate strong operating cash flows amid ongoing investments and divestments.
Growth Pipeline and Strategic Focus
APA has notably expanded its organic growth pipeline for the 2026 to 2028 period from $2.1 billion to approximately $3 billion. This increase signals the company’s confidence in its ability to fund new projects internally, supported by a strong balance sheet and enhanced funding capacity following a favourable modification to S&P’s rating agency thresholds. The company’s BBB (stable) credit rating was reaffirmed, further underpinning its financial strength.
Key growth initiatives include advancing Stage 3 of the East Coast Gas Grid Expansion Plan and progressing the Brigalow Peaking Power Plant project in partnership with CS Energy. These projects are strategically important as they address anticipated gas supply shortfalls on Australia’s east coast and support the broader energy transition by expanding pipeline capacity and integrating renewable energy assets.
Simplification and Cost Discipline
APA continues to simplify its business portfolio, with the divestment of its Networks business and an agreement to sell its 20% interest in GDI, both subject to conditions precedent. These moves align with the company’s focus on core infrastructure assets that deliver returns well above its cost of capital. The company is on track to meet its full-year cost reduction target of $50 million, reflecting a disciplined approach to operational efficiency.
Additionally, a positive regulatory outcome was secured for the Bulloo Interlink pipeline, which will be subject to lighter regulation for at least ten years, reducing regulatory risk and enhancing project economics.
Outlook and Distribution
APA reaffirmed its full-year underlying EBITDA guidance range of $2.12 billion to $2.2 billion, with current expectations to exceed the midpoint. Distribution guidance for FY26 remains steady at 58.0 cents per security, representing a 1.8% increase on the prior year. The interim distribution declared for 1H26 is 27.5 cents per security, up 1.9% from the previous corresponding period, reflecting the company’s commitment to delivering consistent returns to securityholders.
CEO Adam Watson emphasised that APA is well positioned to capitalise on emerging opportunities in the energy sector, balancing growth with financial discipline and a clear focus on long-term value creation.
Bottom Line?
APA’s strong half-year performance and expanded growth pipeline set the stage for a pivotal year in Australia’s energy infrastructure landscape.
Questions in the middle?
- How will APA’s divestment of the Networks business and GDI stake impact future earnings?
- What are the key risks and timelines associated with the East Coast Gas Grid Expansion Stage 3B approval?
- How might fluctuations in regulatory frameworks or market conditions affect earnings from assets like Basslink?
