APA Group (APAJF) (FY 2026) Earnings Call Highlights: EBITDA Surges 8. ...

Q & A Highlights

Q: Can you provide more detail on the composition of the increased $3.5 billion organic-growth pipeline, particularly the size of the Brigalow Peaking Power Plant project? A: Adam Watson (CEO) provided a detailed breakdown, confirming the pipeline increased from $3 billion due to accelerating demand for infrastructure. Key components include the Brigalow Pipeline (~$150 million), the Brigalow Peaking Power Plant (~$1 billion, subject to final negotiations), East Coast Gas Grid Stage 3A ($260 million), Stage 3B (~$800 million), the newly announced Sybella project ($260 million), and the South West Pipeline ($213 million). He emphasized that 80-90% of the pipeline is now clearly identified and fully funded.

Q: Given the divestment of networks and GDI, are there any other non-core assets that could free up further balance-sheet capacity? A: Adam Watson (CEO) stated that while the recent divestments were a deliberate part of simplifying the business, there are no current plans for further divestments. However, he noted that portfolio review remains a lever for funding growth beyond the current $3.5 billion pipeline, and they will consider divesting assets if it creates more value for security holders and there is limited strategic upside.

Q: Can you comment on the scale potential of other medium-term EBITDA growth sources if the Beetaloo Basin doesn't deliver as expected? A: Adam Watson (CEO) expressed confidence in the Beetaloo's progress but highlighted that the AEMO 2026 GSOO shows significant existing capacity to support the East Coast, even absent Beetaloo. He pointed to the Surat Basin's ample capacity and the exploration of new basins like the Taroom Trough, concluding that gas supply will continue to meet demand over time.

Q: What is the latest on the federal government's domestic-gas reservation policy and its potential impact on volumes and earnings? A: Adam Watson (CEO) noted that the policy is heading in the right direction, providing more certainty for producers and customers. He expressed some concern about potential ministerial interference but acknowledged that the government has been listening to stakeholders. The positive shift in sentiment is already leading to an uptick in customer inquiries and productive conversations regarding the East Coast Gas Grid expansion.

Q: Are there any costs that need to come back into the business in FY28 and beyond, or should we think about annual savings on a longer-term basis? A: Garrick Rollason (CFO) confirmed that the $80 million in FY26 savings and the $100 million annualized run-rate for FY27 are structural and permanent. However, he noted a planned ~$10 million increase in growth-operating expenditure in FY27 to support larger investments in growth projects. He added that the company will continue to seek further efficiency improvements, particularly through AI and data processes.

Q: What needs to occur between now and the Final Investment Decision (FID) for the Brigalow Peaking Power Plant, and is there a risk of slippage? A: Adam Watson (CEO) explained that APA is working under a joint-development agreement with CS Energy, having already committed to major commercial terms. The process involves finalizing construction contracts, turbine procurement, and civil works. He expressed confidence in reaching FID shortly, highlighting the strong partnership with the Queensland government and the project's alignment with the Queensland Energy Roadmap.

Q: What is needed to commit to the Stage 2 expansion of the Sturt Plateau Pipeline, and can you provide a broad idea of the cost? A: Adam Watson (CEO) stated that Stage 2 is about expanding capacity to enable more production as more wells are drilled. He emphasized APA's willingness to back its customers with a strong risk lens when there is enough evidence. The company is doing significant work on larger projects like the North-to-East Australian Pipeline and the Darwin-to-Beetaloo Pipeline to provide customers with options, noting that infrastructure projects take time but can accelerate quickly once they become real.

Q: Should we think of the new Sybella project as delivering a typical high-single-digit EBITDA yield? A: Adam Watson (CEO) clarified that recent projects, including those in the Pilbara, are delivering low-double-digit yields. While not providing specific project numbers, he reiterated that APA targets returns at least 150 basis points above its cost of capital. He emphasized that the project provides a lower levelized cost of energy for the customer, Evolution Mining, and is firmed by the Diamantina Power Station, further underwriting that asset's long-term value.

Q: Can you provide some dimensions on the proposed Beetaloo-to-Darwin pipeline to help us size it? A: Adam Watson (CEO) indicated that the pipeline could be a large-diameter pipe, approximately 600 kilometers long, designed to backfill LNG trains in Darwin in the 2030s. APA is running multiple scenarios with customers and has the advantage of using the existing Amadeus Pipeline corridor, which allows for faster delivery due to established relationships with landholders and communities. Planning and approvals are progressing.

Q: Can you comment on the alternate route for the NEAP Pipeline proposed by another company and why yours is better? A: Adam Watson (CEO) explained that APA's route, which takes gas from the Beetaloo down south to the South West Pipeline and then east to Gladstone, is more efficient for delivering gas to the East Coast Gas Grid for domestic supply. This aligns well with domestic-gas reservation requirements. The alternative direct route to Gladstone would create challenges in getting gas to the east coast market. APA's approach also utilizes existing infrastructure, such as the WGP, which expires in 2035, providing an efficient way to reach LNG export facilities.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .