NextDC sees half-year losses deepen by over 50%

Meanwhile revenue and EBITDA were up by 8 per cent and 21 per cent, respectively

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Data centre operator NextDC has reported a net loss after tax of $4.9 million for the half year ending 31 December 2019, a further fall of 56 per cent from the same period last financial year.

According to documents submitted to the Australian Securities Exchange (ASX), the loss was attributed to “higher depreciation and interest costs after a record period of investment” as a result of S2, its yet-to-be-opened Sydney data centre, being operational.

Other investments include “in-house engineering innovation” and the usage of new power and cooling systems.

“These investments position NextDC to deliver significant customer benefits, reinforce its market differentiation over the longer term and deliver scalable growth, reducing operating costs and increasing revenue," NextDC’s directors' report stated.

This record period of investment follows NextDC’s full year results for 2019 ending 31 June 2019, which was previously labelled as experiencing a record level of investment, according to the company.

Meanwhile, revenue increased by 8 per cent to $97.7 million, with $95.4 million coming from data centre services, and earnings before interest, taxes, depreciation and amortisation grew by 21 per cent to $50.9 million over the period.

Craig Scroggie, NextDC’s chief executive officer and managing director, said these results align to the operator’s financial guidance.

“The first half was a record period for new investments in both the development of our next generation of world- class Tier IV data centres P2 and S2, as well as our innovative connectivity service offerings,” Scroggie said.

Customer numbers increased by 16 per cent over the half year to 1,264 and interconnections rose by 20 per cent to 12,012. The rise in interconnections represented 8.2 per cent of recurring revenue, which was an increase of 0.5 per cent for the period.

Scroggie added that NextDC saw a “robust level” of sales during the first half of the financial year, even with limited inventory in the operator's key market of Sydney.

This inventory will be expanded with the opening of its S2 data centre, expected to open in the second half of the financial year.

“The company continues to see strong demand across the national portfolio, noting that we are in advanced negotiations in relation to some large customer opportunities that have the potential to significantly increase NEXTDC’s contracted utilisation base,” Scroggie said.