The APA Group (ASX: APA) share price rose more than 3% after reporting its FY25 report and revealed its FY26 outlook.
APA is a major energy infrastructure group in Australia, with gas transmission, other gas assets, renewable energy generation and electricity transmission.
APA FY25 result
Here are some of the highlights from the result for the 12 months to 30 June 2025.:
- Revenue rose 4.7% to $2.7 billion
- Underlying EBITDA (EBITDA explained) grew 6.4% to $2 billion
- Free cashflow increased slightly $1.08 billion
- Statutory net profit after tax reduced to $129 million, but underlying net profit rose 8.4%
- Distribution increased by 1.8% to $0.57 per security
APA reported that its result was underpinned by a strong performance from its gas transmission and storage business, a full year contribution from the Pilbara Energy System (PES) business, contributions from newly commissioned assets, inflation-linked tariff escalation and an improved underlying EBITDA margin.
The EBITDA margin improved thanks to strong asset performance and cost reduction initiatives.
The free cashflow only increased slightly because of higher interest costs and tax payments.
APA also noted that favourable regulatory outcomes have been achieved with the South West Queensland Pipeline and Basslink.
FY26 guidance
The business has provided guidance that it’s expecting to increase its distribution by another $0.01 per security, or 1.75% to $0.58 per security. This is a distribution yield of 6.6%.
The underlying EBITDA guidance for FY26 is between $2.12 billion to $2.2 billion. The middle of that guidance range represents year on year growth of 7.2%, which is ahead of inflation and it’s expected to be helped by a contribution from new assets and cost reduction initiatives.
Growth projects
APA reported $655 million of capital investment in growth projects for FY25, including the acquisition of Atlas to Reedy Creek Pipeline and completion of the construction of the Port Hedland Solar and Battery project and Kurri Kurri lateral pipeline project.
Growth momentum is supported by the five-year East Coast Gas Grid Expansion Plan with early works progressed. It also executed the development agreement to deliver the Sturt Plateau Pipeline in the Beetaloo Basin.
Outlook for the APA share price
With the guidance of more growth in FY26, I think the outlook is compelling for this business if it’s viewed as an infrastructure play and/or an ASX dividend share.
I think it offers a pleasing distribution yield and could deliver slow (but positive) profit growth in the coming years. It’s not as good value as it was at the start of 2025, but I think it’s appealing in this period with the RBA cutting interest rates.
