'The Australian' says:
APA boss Rob Wheals abruptly quits ahead of results

APA Group chief executive Rob Wheals with his predecessor, Mick McCormack. Picture: John Feder

• Perry Williams

  Senior Business Writer

  
• An hour ago August 22, 2022

Gas pipeline giant APA Group has lost its chief executive with Rob Wheals unexpectedly quitting and the company abandoning its long-held plan to diversify into the US.

Mr Wheals, who took the top job in July 2019, will leave at the end of September and be replaced on an interim basis by chief financial officer Adam Watson, a former Transurban executive.

“Reaching my decision has been a process, and there are several things that have gone into this decision,” Mr Wheals said.

“It has been an intense couple of years in the energy industry made even more challenging with the overlay of the Covid-19 pandemic. This together with the decision not to pursue an acquisition in the US, has led me to conclude that now is the right time to move on.”

APA has also called time on its US acquisition strategy, first put in place by Mr Wheals‘ predecessor Mick McCormack as a way of diversifying its Australian earnings base.

It had flagged up to $4bn to pursue a range of targets in North America but has canned the process, APA’s chairman Michael Fraser said.

“We have been screening the US utilities market for over three years now and whilst there are clearly attractive aspects to that market, it also involves a number of risks and ongoing investment challenges,” Mr Fraser said.

“APA’s core competencies and competitive advantages are in the Australian market and the focus of our strategy will be to maximise returns to securityholders while pursuing the very significant investment opportunities arising from Australia’s transition to a low carbon future.”

APA owns 15,000km of gas pipelines worth $21bn across Australia and delivers half the nation’s gas along with stakes in storage facilities, power stations and wind and solar farms.

APA last week revealed it faced a $32m hit over a payroll bungle and also endured a setback after Santos opted to buy the Hunter Gas Pipeline to transport gas from its prospective Narrabri project rather than a 460km pipeline proposed by APA, known as Western Slopes, which would have connected Narrabri to network via the Moomba-Sydney pipeline.

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Ahead of its annual 2022 results due on Wednesday, the Sydney-based company provided unaudited numbers with underlying earnings rising 3.9 per cent to $1.69bn, free cash flow up 19.8 per cent to $1.08bn and a dividend of 53c per security, up 3.9 per cent on the prior year.

Prior to take up the CEO role, Mr Wheals was APA’s transmission executive and first joined the company in 2008 following a stint at AAPT where he was general manager of strategy.

APA’s general manager of investor relations, Kynwynn Strong, will be appointed as acting CFO.

APA revealed last year it had lost out on bidding for a major deal in North America as it warned that a growing debate over the role of gas in the energy mix had contributed to uncertainty for some Australian customers to renew their contracts.

The hunt to land a North American deal, headed up by Ross Gersbach based out of Houston incurred several delays after a $13bn takeover of APA by Hong Kong’s CK Infrastructure was abandoned after Josh Frydenberg blocked the bid on national interest grounds.