APA Group (APAJF) (Half Year 2026) Earnings Call Highlights: Strong Financial Performance and …

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Thu, February 19, 2026 at 4:01 PM GMT+9 4 min read

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**Underlying EBITDA:** Increased by 7.6% for the half year.

**EBITDA Margin:** Expanded by 280 basis points to 77.3%.

**Corporate Costs:** Reduced by 13.6%.

**Free Cash Flow:** Slight increase from $555 million to $556 million.

**Distribution per Security:** Increased by 1.9% to $27.5, with FY26 guidance reaffirmed at $0.58 per security.

**Net Profit After Tax:** $95 million, higher than the corresponding period.

**Growth CapEx Pipeline:** Increased from $2.1 billion to $3 billion over the next three years.

**Cost Reduction Target:** Progress towards a $50 million reduction in FY26.

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Release Date: February 18, 2026

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

Positive Points

APA Group (APAJF) reported a strong financial performance with a 7.6% increase in underlying EBITDA and an expansion of EBITDA margins by 280 basis points.

The company has a compelling growth outlook, with an increase in its organic growth pipeline from $2.1 billion to $3 billion, reflecting strong market demand.

APA Group (APAJF) has ample capacity to fund its growth, with an additional $1 billion of capacity provided by the S&P threshold modification.

The company has successfully reduced corporate costs by 13.6%, contributing to its improved financial performance.

APA Group (APAJF) reaffirmed its distribution guidance for FY26 at $0.58 per security, marking the 23rd consecutive year of distribution growth.

Negative Points

There are concerns about the risk of taking a merchant risk position on Stage 3B of the East Coast Grid expansion without full customer underwriting.

The company faces potential challenges from LNG import terminals, which could offer competitive pricing under certain market conditions.

Some growth opportunities, such as those in the Pilbara region, have been delayed, with demand from customers slower than anticipated.

The Northern Goldfields Interconnect pipeline remains under-contracted, highlighting potential commercial risks.

APA Group (APAJF) is exposed to uncertainties related to the National Gas Review, which could impact long-term contracts and project commitments.

Q & A Highlights

Q: Could you provide some color about how you’re able to negotiate the reduced downgrade trigger with S&P and if you had to give anything away for the more favorable balance sheet settings? A: Garrick Rollason, CFO: We frequently engage with rating agencies, providing detailed insights into our operations and forecasts. Our discussions with S&P focused on the strength of our contracted inflation-linked revenues and asset nature. The threshold modification aligns with our business metrics, and we didn’t have to concede anything to achieve it.

Story Continues  

Q: With the increased growth CapEx outlook, what balance sheet capacity do you have left over the next three years? A: Adam Watson, CEO: Strategically, we focus on customer-led projects in core markets, ensuring returns above our cost of capital. The S&P threshold modification has provided about a billion dollars of additional debt capacity, allowing us to fund more accretive growth. We have multiple levers, including hybrid instruments, partnering, and asset recycling, to manage our balance sheet capacity.

Q: Can you confirm the level of customer underwriting for Stage 3B of the East Coast Grid expansion? A: Adam Watson, CEO: Stage 3B involves pipeline development, and we’ve ordered long lead items like line pipes. While customer interest is strong, they await the National Gas Review’s outcome. Our commitment signals to the government and industry that capacity is not a constraint, facilitating policy development.

Q: How does APA Group plan to engage with the Beetaloo development and potential partnerships with companies like Santos? A: Adam Watson, CEO: We partner with all active participants in the Beetaloo market, focusing on planning and approvals for pipeline connections. Our strategy includes potential routes for gas to flow east to Gladstone or north to Darwin, ensuring we’re well-positioned to support basin development.

Q: Regarding your $3 billion organic growth pipeline, what has driven the increase from $2.1 billion, and what projects are included? A: Adam Watson, CEO: The increase is primarily due to the East Coast gas grid expansion. The pipeline includes the Brigalow Peaking Power Plant, various laterals, and work in the Beetaloo. We probability weight projects, and the pipeline reflects a mix of ongoing and potential opportunities.

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

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