Financial Data and Key Metrics Changes - FY 2025 EBITDA increased by 6.4% to over $2 billion, marking the first time APA has achieved annual earnings above this threshold [14][15] - Underlying EBITDA margin expanded to 74.2%, supported by stronger operating results and corporate cost growth below inflation [15] - Free cash flow rose by 1% to nearly $1.1 billion, reflecting higher underlying earnings despite increased funding costs and cash tax payments [15][18] - FY 2025 distribution of $0.57 per security, up $0.01 from the previous year, with FY 2026 distribution guidance set at $0.58 per security [9][28] Business Line Data and Key Metrics Changes - Increased demand on the East Coast for seasonal capacity and inflation-linked tariff escalations contributed to higher earnings [15] - On the West Coast, higher ownership of the Goldfields gas pipeline and increased customer demand on NGI drove earnings growth [17] - The organic growth pipeline increased from $1.8 billion to $2.1 billion, with the ability to fund this from the existing balance sheet [7][46] Market Data and Key Metrics Changes - Strong demand for gas power generation is anticipated, with significant new investment opportunities identified [33][42] - AEMO's forecasts indicate a need for 13 gigawatts of new gas power generation investment as coal retires, with additional demand expected from data centers and AI [33][42] - Domestic gas supply is not a constraint, with over 68,000 petajoules of reserves available to meet demand [37][40] Company Strategy and Development Direction - The company is focused on energy infrastructure supported by long-term, inflation-linked contracts, emphasizing gas transmission and storage as core growth areas [32][51] - Recent divestments and simplification of operations aim to enhance efficiency and focus on high-return projects [13][31] - The strategy includes addressing regulatory risks and ensuring the expansion of the East Coast gas grid to meet future demand [12][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth pipeline and the ability to deliver strong returns for security holders despite market dynamics [32][58] - The company is actively engaging with customers and government to ensure regulatory stability and support for domestic gas supply [86][87] - Management acknowledged the challenges in the supply chain for major electricity transmission and power generation equipment but remains optimistic about managing these risks [66] Other Important Information - The company has reaffirmed its climate transition targets and is committed to reducing emissions while supporting the energy transition [11][67] - The divestment of the non-core networks business is expected to simplify operations and reduce headcount by approximately 725 people [29] Q&A Session Summary Question: Changes in growth strategy regarding East Coast electricity transmission - Management clarified that while the focus on East Coast electricity transmission has shifted, the overall growth strategy remains intact with significant addressable market opportunities in gas transmission and storage [49][51] Question: Will APA need to underwrite risks for East Coast grid expansions? - Management indicated that the market is not expected to fully underwrite projects as in the past, but demand remains strong, and they are working with customers to secure necessary support [52][53] Question: How will organic growth offset future declines in earnings? - Management stated that they are not trying to replace lost earnings dollar for dollar but are focused on overall business growth and distribution increases [58] Question: Insights on gas power generation and emissions targets - Management emphasized the importance of gas-fired power generation in the energy transition and acknowledged that increased GPG could impact emissions intensity targets [65][67] Question: Update on the Baloo interlink project - Management confirmed that the Baloo interlink is a critical infrastructure project, with a target for final investment decision in FY 2026, contingent on customer engagement [71][72] Question: Split between sustaining and growth CapEx - Management indicated that approximately $600 million of the $969 million in assets commissioned during the year was related to growth capital expenditures [75] Question: Future CapEx guidance and major overhauls - Management noted that sustaining CapEx guidance includes cyclical spikes related to power generation, with significant overhauls expected towards the end of the decade [80][82]