Pre-fabricated modular data centre specialist DXN has blamed the COVID-19 pandemic and the ensuing supply chain chaos for its $6.9 million loss for 2022.
The publicly listed company described its financial performance as “lacklustre” for the year ended June 30 2022 despite revenue rising 91 per cent to $15.4 million.
The annual report comes one month after DXN announced it intended to sell its entire business to Flow2Edge Australia for $26 million.
However, the deal was subsequently revised with DXN selling its edge module manufacturing business unit for $20 million, leaving it to focus on operations.
Speaking to shareholders about the results, CEO Shalini Lagrutta said the impact of global supply chain constraints on the business was noticeable towards the end of FY22.
"This includes price inflation, parts unavailability which has required some project re-design and caused delayed deployment (with some income pushed into FY23) and cashflow pressures from payment-on-delivery demand," she said.
DXN’s business, which was split between edge modular data centre manufacturing and edge data centre operations, also posted an earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $1.8 million, a 291 per cent fall from 2021’s $948,798 in the black.
The EBITDA was pinned down DXN’s decision to end the lease of its Melbourne facility, which left the company in dispute with its former landlord. This left a one-off expense item for the Melbourne lease resolution of $700,104 and the expensing of previously capitalised R&D expenses of $504,971.
However, DXN negotiated the end of its lease liability for the Melbourne data centre, releasing the company of up to $6 million in liability obligation.
The company’s data centre operations now comprises of three facilities: Sydney, Hobart and Darwin – the latter which it acquired in September last year.
More promising for DXN is its new customer pipeline of Boeing Defence, Sub.co, Belau Submarine Cable Company (BSCC), Wingu Africa, Covalent Lithium, Centre of National Resilience in Perth through Multiplex and “several large global internet companies”.
DXN said it was also eyeing further growth in the Asia Pacific region to develop new business models to suit customer requirements, such as edge as-a-service.