AI Technology companies are increasingly seeing an opportunity in the growing cloud and AI driven demand for digital infrastructure. This in turn is creating tailwinds for Australian data centre operator NEXTDC (ASX: NXT), which plans to expand its data centre pipeline in Asia.
NEXTDC Limited (ASX: NXT)
NEXTDC Limited (ASX: NXT) announced its FY24 annual results for the period ended 30 June 2024, on 27 August 2024.
In FY24, NEXTDC surpassed guidance across key financial metrics, with total revenue rising 12% to A$404.3 million and net revenue increasing 10% to A$307.9 million. Underlying EBITDA grew 5% to A$204.3 million, exceeding the top end of the guidance range. The company achieved record new contracted sales of 50.5MW and saw interconnection revenues rise 12% to A$28.3 million. Capital expenditure reached a record A$1.0 billion, in line with its strategic focus on network expansion, while liquidity stood strong at A$2.7 billion.
The forward order book hit a record 86.6MW, positioning the company for future revenue and earnings growth. Key developments include operational facilities in Darwin and Newman, a new facility in Adelaide opening in September, and ongoing international expansion with projects in Kuala Lumpur and Auckland.
In FY24, direct costs rose by A$13.4 million (16%) to A$96.4 million, driven by customer consumption and higher energy prices, though costs in the second half were lower due to reduced contracted rates. Facility costs increased by A$7.8 million (20%) to A$46.0 million, primarily due to a 32% rise in property holding costs from new acquisitions and higher operational expenses. Corporate costs also grew by A$9.7 million (20%) to A$58.5 million, reflecting investments to support the expansion of over 100MW of capacity. EBITDA rose by A$8.1 million (4%) to A$190.7 million, while EBIT fell by A$19.5 million (46%) to A$23.0 million. Profit before tax was a loss of A$36.3 million, and profit after tax was a loss of A$44.1 million. Net revenue grew by 10%, with 86.6MW remaining in the forward order book.
In FY25, NEXTDC is set for substantial growth, driven by record sales and a robust pipeline, with a forward order book of 86.6MW projected to generate significant revenue by the end of the fiscal year. The company will enhance its network with 71.6MW of new capacity under development, regional expansions including new sites in Darwin, Newman, and Adelaide, and international projects in Kuala Lumpur and Auckland. Investments will focus on scaling operations, advancing automation and centralization, and upgrading security measures, alongside a strategic shift to more flexible IT systems. Solid revenue growth is anticipated with net revenues expected between A$340 million and A$350 million and underlying EBITDA guidance of A$210 million to A$220 million. Capital expenditure is forecasted between A$900 million and A$1,100 million, reflecting ongoing and planned expansions across Australia and internationally, aligned with a record pipeline and rising demand in enterprise, ICT, cloud, and AI sectors.
NEXTDC is positioning itself as a leader in the evolving digital infrastructure landscape, vital to the digital economy. NEXTDC’s strategic focus on expanding its platform and enhancing its capabilities is both timely and essential.
Source: Company’s Report
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