APA Group (ASX: APA)
Powering Australia’s Energy Transition with Strategic Expansion and Stable Returns
APA Group (ASX: APA), Australia’s leading energy infrastructure company, has reaffirmed its strategy and FY25 guidance at the recent Macquarie Australia Conference, underscoring its role in delivering secure, reliable, and lower-emissions energy solutions. With a portfolio valued at $27 billion, APA operates 15,000 km of gas pipelines and assets spanning gas, electricity, wind, and solar generation. For the half year ended 31 December 2024, APA reported underlying EBITDA of $1.015 billion, up 9.1% from the prior year, with an EBITDA margin of 74.5%. Free cash flow rose to $552 million, while the interim distribution increased to 27.0 cents per security, reflecting its strong income-generating ability.
Looking ahead, APA is executing a $1.8 billion organic growth pipeline funded by operating cash flow, DRP, and balance sheet capacity. Key projects include the East Coast Gas Grid Expansion, Pilbara decarbonisation, and the Sturt Plateau Pipeline in the Beetaloo Basin. APA's strategy is supported by a $100 billion+ addressable market and long-term demand for gas infrastructure, which remains essential well beyond 2050. APA is also investing in scalable storage solutions, solar and battery energy systems, and partnering with global firms like EDF. The company maintains a strong balance sheet with FFO/Net Debt at 10.7%, while credit ratings remain at BBB/Baa2. With cost control initiatives and diversified funding strategies, APA continues to deliver dependable distributions and is positioned to support Australia’s evolving energy landscape well into the future.
Charter Hall Long WALE REIT (ASX: CLW)
Stable Income Backed by Strategic Capital Management and Long-Leased Assets
Charter Hall Long WALE REIT (ASX: CLW), backed by Charter Hall Group, maintains a $5.8 billion portfolio of 540 properties, focusing on resilient income streams through long leases. In FY24, the REIT delivered operating earnings and distributions of 26.0 cents per security, with a 100% payout ratio. The portfolio recorded 4.7% like-for-like rental growth, supported by 51% CPI-linked leases and 3.1% average fixed increases across the rest. CLW executed $762 million in divestments, lowered gearing to 30.1%, and retained its Moody’s Baa1 investment-grade credit rating. A $50 million on-market buyback, $500 million in cancelled facility limits, and 72% hedging of drawn debt underline disciplined capital management.
The REIT’s portfolio remains 99.9% occupied, with a WALE of 10.5 years and 98% of properties leased to government, ASX-listed, or multinational tenants. Its top five tenants include Coles, Telstra, and the Commonwealth Government. Notably, 55% of income is secured under triple net leases, reducing operating risks. Sector exposure includes industrial and logistics (40%), office (36%), retail (14%), social infrastructure (6%), and Agri-logistics (4%). Environmental progress continues, with Net Zero Scope 1 & 2 emissions, 6.5MW of installed solar, and a 5.3-star NABERS energy rating. Looking ahead, CLW has reaffirmed FY25 guidance for 25.0 cents in operating EPS and distributions, implying a 6.1% yield. With long leases, quality tenants, and a strong balance sheet, Charter Hall Long WALE REIT continues to deliver sustainable, inflation-protected returns
(Source: Company Announcements)
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