1) As I posted on the other thread the reduction in the cash flow per share is misleading in the period because they issued shares to purchase the Pilbara assets that only generated cash for part of the year. The Pilbara assets purchase was stated as being cash generative in year 1. 2) Volumes will increase over time as gas is increasingly used to generate base load power. 3) Forex rates can go up & down to impact borrowings in another currency 4) Shorter contract lengths also enable APA to take advantage of higher pricing at an earlier time. 5) Increased capacity is needed for a growing business, over time these types of expenditure increases even out 6) Maintenance capex will increase the more assets you buy & create. APA has bought Basslink, Pilbara Assets & installed new pipelines in recent times 7) Back to normalised conditions
I don't think there is any doubt that the next few years will be leaner in terms of dividend growth but that is to be expected when you make investments both through acquisitions & capital expenditure. Without these investments APA certainty wouldn't be in a position in the future to increase dividends to such an extent. So I see this an ideal time to buy APA, as they invest for the future, rather than buying later when the improvements have already filtered through & the price has risen.
APA Price at posting:
$7.89 Sentiment: Buy Disclosure: Held
(20min delay)