APA Group Posts Strong FY25 Earnings, Sets Ambitious FY26 Growth Targets
APA Group delivered robust FY25 financial results with earnings near the top of guidance and announced confident FY26 growth plans, underpinned by cost reductions and a $2.1 billion project pipeline.
- Underlying EBITDA up 6.4% to $2.015 billion, margins improved to 74.2%
- FY25 distributions increased 1.8% to 57.0 cents per security
- FY26 guidance, EBITDA $2.12–2.2 billion, distributions 58.0 cps
- Capital investment of $655 million in growth projects during FY25
- Regulatory wins include Basslink becoming a regulated asset from July 2026
Strong Financial Performance in FY25
APA Group has reported a solid financial year ending June 30, 2025, with underlying EBITDA rising 6.4% to $2.015 billion, positioning results at the upper end of market guidance. The company’s EBITDA margins improved to 74.2%, reflecting both robust asset performance and effective cost reduction initiatives. Total statutory revenue, excluding pass-through items, grew by 4.7% to $2.713 billion, underscoring steady top-line growth.
Despite a statutory net profit after tax of $129 million being lower than the prior year; largely due to significant non-cash write-ups in FY24; the underlying profit showed an 8.4% increase, signaling genuine operational strength. Free cash flow remained strong at $1.083 billion, supporting ongoing investment and distributions.
Growth and Cost Discipline Drive Outlook
APA’s management highlighted disciplined capital allocation and a focus on cost control, with corporate cost growth kept below inflation and a targeted $50 million cost reduction for FY26. Capital investment in FY25 reached $655 million, funding key projects such as the Atlas to Reedy Creek Pipeline acquisition, the Port Hedland Solar and Battery project, and the Kurri Kurri lateral pipeline.
Looking ahead, APA has set FY26 guidance for underlying EBITDA between $2.12 billion and $2.2 billion, representing a 7.2% growth at the midpoint, comfortably ahead of inflation. Distribution guidance is also positive, with a 1.8% increase to 58.0 cents per security, balancing growth funding with maintaining investment-grade credit ratings.
Strategic Expansion and Regulatory Wins
APA’s growth pipeline has expanded to approximately $2.1 billion, driven by major initiatives including the East Coast Gas Grid Expansion Plan, early development of the Sturt Plateau Pipeline in the Beetaloo Basin, and priority projects in the Pilbara region. The company also secured favorable regulatory outcomes, notably the Australian Energy Regulator’s decision to not regulate the South West Queensland Pipeline and to convert Basslink into a regulated transmission asset from July 2026.
These regulatory developments provide APA with greater certainty and potential revenue stability, particularly as Basslink transitions to a regulated asset base. Additionally, APA released its 2025 Climate Transition Plan, reinforcing its commitment to managing climate-related risks and ensuring portfolio resilience amid the energy transition.
CEO Perspective
CEO Adam Watson emphasized the critical role of gas in Australia’s energy future and APA’s strategic positioning to capitalize on this. He highlighted the company’s focus on growth projects that deliver strong returns and the importance of cost discipline in sustaining securityholder value. Watson’s remarks underscore confidence in APA’s ability to navigate evolving market dynamics while advancing its infrastructure portfolio.
Bottom Line?
APA’s strong FY25 results and ambitious FY26 guidance set the stage for continued growth, but investors will watch closely how regulatory changes and project execution unfold.
Questions in the middle?
- How will Basslink’s transition to a regulated asset impact APA’s earnings volatility?
- What are the key risks to APA’s $2.1 billion organic growth pipeline amid market and regulatory shifts?
- How effectively can APA sustain cost reductions while scaling up capital investments?
