APA share price slips on CEO resignation and earnings preview

The APA Group (ASX: APA) share price is once again in the red.

This time, it’s falling on news the CEO of the S&P/ASX 200 Index (ASX: XJO) energy infrastructure giant will step down as the company dumps its strategy to enter the US via acquisition after three years of scouring the market.

On top of that, APA provided a peek at its upcoming full-year earnings this morning.

The APA share price is currently $11.54, 1.2% lower than its previous close.

Let’s take a closer look at today’s news from the ASX 200 utilities company.

What’s weighing on the APA share price today?

APA results preview

The ASX 200 giant released some unaudited earnings for financial year 2022 today. Here are the key takeaways:

• Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) of $1.69 billion – a 3.9% year-on-year improvement
• $1.08 billion of free cash flow – a 19.8% increase
• 53 cents per share of full-year dividends – meaning its final dividend will likely be 25 cents

The company plans to release its financial year 2022 earnings on Wednesday.

Late last week, APA announced it will recognise a $32 million impairment in its results. The APA share price fell 1.35% on the back of the news.

CEO steps down as US plans ditched

The APA share price is also trading lower on news the company’s CEO and managing director Rob Wheals will step down from the top job at the end of next month.

Wheals will leave the company in the hands of chief financial officer Adam Watson. He will step up as acting CEO while the company searches for a new leader.

Meanwhile, the role of chief financial officer will be temporarily filled by APA general manager of investor relations Kynwynn Strong.

Commenting on his resignation, 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 chair Michael Fraser thanked Wheals for his 14 years with the company, three of which were spent at the helm. Fraser also spoke of the company’s decision to ditch its US plans, saying:

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.

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

The post APA share price slips on CEO resignation and earnings preview appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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