NextDC Slips to Annual Loss on Expansion Investment — Update

ASX-listed NextDC reported an annual loss for the 12 months through June of 25.6 million Australian dollars (US$16.4 million), compared with a A$9.1 million profit a year earlier. Revenue rose 25% on year to A$362.4 million but the cost of expanding capacity to meet rising demand for cloud-computing services hit the bottom line.

It reported underlying earnings before interest, tax, depreciation and amortization of A$193.7 million, up from A$169.0 million a year earlier. NextDC initially guided for A$190 million-A$198 million in underlying Ebitda before narrowing its forecast in May to A$192 million-A$196 million.

NextDC did not declare a dividend.

The average analyst forecast had been for a A$13.9 million net loss from revenue of A$354.1 million, according to data compiled by FactSet.

As well as expanding the size and number of its domestic centers, NextDC in May announced plans to build new centers in Malaysia and New Zealand. The international expansion, long anticipated by analysts, was funded by a A$618 million equity raise.

NextDC confirmed that it expects to start building in Kuala Lumpur and Auckland during fiscal 2024, with practical completion targeted for the first half of fiscal 2026.

The company expects fiscal 2024 capital expenditure of A$850 million-A$900 million, compared with A$690.4 million in fiscal 2023 and A$603 million in the year before that.

NextDC expects fiscal 2024 underlying Ebitda of A$190 million-A$200 million, with operating leverage accelerating as forward orders result in additional revenue from fiscal 2025. It sees margins expanding from the second half of fiscal 2024 as price rises flow through and power costs decrease.

“FY24 represents a critical investment year for NextDC to expand and enhance its market-leading platform capabilities, making the necessary investments to leverage the next decade of growth, both domestically and internationally,” Chief Executive and Managing Director Craig Scroggie said.

Write to Stuart Condie at [email protected]