ASX RELEASE 20 November 2014 The Manager ASX Market Announcements - - PDF document
ASX RELEASE 20 November 2014 The Manager ASX Market Announcements Australian Securities Exchange 4 th Floor, 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Dear Sir or Madam Company Announcement I attach the following announcement
ASX RELEASE 20 November 2014 The Manager ASX Market Announcements Australian Securities Exchange 4th Floor, 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Dear Sir or Madam Company Announcement I attach the following announcement for release to the market:
Yours sincerely Mark Knapman Company Secretary APA Ethane Limited
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Actual FY14 ($000) Cash and cash equivalents Current 6,442 Non-current 2,169 Total cash and cash equivalents 8,611 Property, plant and equipment 33,640 Intangible assets 41,158 Other Current 800 Non-current
84,209 Trade and other payables 2,928 Income tax payable 726 Other Current 150 Non-current 6,070 Total Liabilities 9,874 Net Assets 74,335 Issued capital 88,765 Accumulated Losses (14,430) Total Equity 74,335
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supply arrangements.
Increased certainty under PTA
Reduction in revenue compared to FY14
Stability in cash available for distributions
1 Jan 2015 – 31 Dec 2018
transportation charge unless agreed annual thresholds met. If thresholds met, current tariff structure (reservation and transportation charges*) will apply. From 1 Jan 2019 onwards
and transportation charges*)
revenue it would otherwise have been entitled to in 2015-2018 if the tariff structure was not changed, subject to meeting agreed monthly volume thresholds. Termination
based on the current tariff structure (reservation and transportation charges*). Otherwise, the tariff in 2018 will be as set out in the first point above.
* Adjusted annually by 50% of CPI ** Further details set out in the EPX ASX release dated 13 November 2014 (attached)
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(actual)
(announced)
(forecast)
(forecast)
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From Moomba To Sydney
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This Presentation has been prepared by APA Ethane Limited (ACN 132 157 290) the responsible entity of the Ethane Pipeline Income Trust (ARSN 118 961 167) and Ethane Pipeline Income Financing Trust (ARSN 118 961 023) (Ethane Pipeline Income Fund (the Fund)). Summary information This Presentation contains summary information about the Fund and its activities current as at the date of this presentation. The information in this presentation is of a general background nature and does not purport to be complete. It should be read in conjunction with the Fund’s other periodic and continuous disclosure announcements which are available at www.ethanepipeline.com.au. Not financial product advice Please note that APA Ethane Limited is not licensed to provide financial product advice in relation to securities in the Fund. This presentation is for information purposes only and is not financial product or investment advice or a recommendation to acquire securities and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and consult an investment adviser if necessary. Past performance Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. Future performance This Presentation contains certain “forward-looking statements” such as indications of, and guidance on, future earnings and financial position and
subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. This Presentation contains such statements that are subject to risk factors associated with the industries in which the Fund operates which may materially impact on future performance. Investors should form their own views as to these matters and any assumptions on which any forward-looking statements are based. The Fund assumes no obligation to update or revise such information to reflect any change in expectations or assumptions. Investment Risk An investment in securities in the Fund is subject to investment and other known and unknown risks, some of which are beyond the control of the Fund. The Fund does not guarantee any particular rate of return or the performance of the Fund. Not an offer This Presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security.
ASX RELEASE 13 November 2014 PRODUCT TRANSPORTATION AGREEMENT VARIATION APA Ethane Limited, the responsible entity of Ethane Pipeline Income Fund (ASX: EPX) (“Fund”) advises that the Fund’s only customer, Qenos Pty Limited (“Qenos”) has informed the Fund that it has reached agreement with its ethane suppliers for the supply of ethane to Qenos’ Botany operations for a further term of five years from 1 January 2015. The Fund’s primary source of revenue is the Product Transportation Agreement (“PTA”) with Qenos. The PTA was entered into in 2000 and continues until 2030, but could be terminated earlier by Qenos giving at least 12 months’ notice of termination. As part of a program to improve the performance of its Botany operations, Qenos had sought variations to contractual terms from its major suppliers (including the Fund) that are aligned to the likely ethane volumes, which Qenos advises are currently at historical lows and forecast to increase over the term of its ethane supply arrangements. Following negotiations with Qenos, the Fund has achieved an outcome which, until at least 2018, will:
associated with the volume of ethane transported through the pipeline; and
The Fund and Qenos have agreed to amend the PTA, with effect from 1 January 2015, as summarised in the Attachment. The effect of these changes is, broadly, as follows:
December 20181 of $20 million per annum (the “Fixed Minimum Charge”) that is not dependent on the volume of ethane transported through the pipeline;
ethane transported for the same period;
termination cannot take effect before 1 January 2019;
January 2015 to 31 December 2018 (i.e. the amount, if any, by which the Fund’s revenue for that period is less than the revenue the Fund would have been entitled to for the same period under the previously agreed tariff structure) if, in any calendar year in that period, ethane volumes and Qenos’ EBITDA2 are greater than specified threshold levels; and
1 If Qenos provides a termination notice prior to 1 January 2018, the tariff structure for the 2018 calendar
year reverts to that previously agreed in the PTA.
2 Earnings before income tax, depreciation and amortisation.
instead of the Fixed Minimum Charge, and there is a mechanism that affords the Fund another opportunity to recover the revenue shortfall referred to above. On the basis of Qenos having reached agreement on variations to its contracts with major suppliers, including the Fund, Qenos has advised the Fund that it will make a significant financial investment and undertake a major maintenance program on its Botany plant commencing in 2015. Taking into account the agreed variations to the PTA summarised in this release, and barring unforeseen circumstances, the Fund expects:
between 3.0 and 3.25 cents per security, plus franking credits of approximately 1 cent per security; and
2018 to be in line with the distributions indicated above for the remainder of FY2015. There is no change to the Fund’s distribution policy of paying quarterly distributions from available net cash. Further distribution guidance will be provided on an annual basis, in keeping with prior practice.
For further information please contact Amanda Keenan, Investor Relations Tel: 02 9693 0075 Email: amanda.keenan@apa.com.au Sam Pearce, Fund Manager Tel: 02 9693 0043 Email: sam.pearce@apa.com.au About the Ethane Pipeline Income Fund The Fund’s core asset is the 1,375km Moomba to Sydney Ethane Pipeline that supplies ethane from the Cooper Basin production facility at Moomba, South Australia to Qenos’ Botany ethylene plant.
ATTACHMENT Summary of key changes to PTA with effect from 1 January 2015 1 January 2015 – 31 December 2018
adjusted so that the Fund’s revenue depends on the following annual thresholds:
EBITDA.
2018:
(adjusted annually by 50% of CPI); and
Fund will receive the same economic benefit as if the Reservation charge and Transportation charge (adjusted annually by 50% of CPI), previously agreed in the PTA, applied in that year. From 1 January 2019
Transportation charge previously agreed under the PTA (adjusted annually by 50% of CPI).
circumstances the Fund can recover the amount, if any, by which the revenue it was paid under the PTA for the period from 1 January 2015 to 31 December 2018 is less than it would have been entitled to for the same period under the previously agreed tariff structure. The surcharge will be payable by Qenos in each month after 1 January 2019 during which the volume of ethane transported through the pipeline exceeds a specified threshold, and is calculated as 20% of the Transportation charge for the month. Termination Mechanism Adjustment
notice to terminate the PTA and termination cannot occur before 1 January 2019, and may not withdraw or rescind that notice (without agreement from the Fund to do so).
notice is issued. In the event of a termination notice being issued on or before 1 January 2018 (which cannot be effective before 1 January 2019), the tariff during the 2018 calendar year will be based on the previously agreed tariff structure. In all other circumstances, the adjusted tariff regime (i.e. the fixed fee and threshold arrangements referred to above) will apply through to 31 December 2018.