Energy costs impact NextDC's bottom line

Energy costs impact NextDC's bottom line

Revenue and underlying both increased in what the company claimed was “another record result”.

Craig Scroggie (NextDC)

Craig Scroggie (NextDC)

Credit: NextDC

NextDC’s profit after tax has dropped 381.3 per cent to A$25.6 million in the red during its last financial year, with direct costs shooting up by approximately 270 per cent over the 2023 calendar year.

During the 12 months to 30 June, the data centre operator’s bottom line fell from A$9.1 million in the black in the financial year prior, which came after a A$23.6 million loss in the financial year before that.

Costs during the period increased by 39 per cent, to A$170.1 million. The company said that short term direct costs driven by significantly higher contracted energy costs for calendar 2023 affected the second half of the year.

Total revenue was up 25 per cent, to $362.4 million, while underlying earnings before interest, tax, depreciation and amortisation (EBITDA) also increased by 15 per cent, to A$193.7 million.

In the period, NextDC opened its third Sydney data centre, S3 in October, which saw A$1 billion in investment, as well as its largest facility to date, M3 in October, located in Melbourne. It also revealed plans for it to expand into New Zealand and Malaysia, with sites for new facilities already purchased.

NextDC CEO and managing director Craig Scroggie claimed FY23 delivered “another record result with strong growth in revenue, underlying EBITDA and contracted utilisation”.

“With liquidity of approximately A$2.3 billion, NextDC is exiting FY23 in a strong financial position to be able to take advantage of the opportunities presented by the exponential tailwinds of enterprise modernisation and cloud computing, in addition to the unprecedented acceleration of AI- [artificial intelligence] driven applications driving one of the most powerful computational transformations in our lifetime.” 

Looking ahead to FY24, NextDC said it expects revenue to increase to A$400 million to A$415 million, with underlying EBITDA to sit at A$190 million to A$200 million.

Scroggie also said that FY24 will be a “critical investment year” for the data centre operator for its next decade at growth.

“The core of the future growth of AI and cloud computing lies the pivotal role of the underlying digital infrastructure. This technological backbone, encompassing our data centres and networks, establishes the very foundation upon which the remarkable capabilities of both AI and cloud rely and this moment in time is an inflection point for the company,” he said.

“The scalability, speed and reliability of these technologies are intricately tied to the strength of this digital foundation. As the insatiable demand for computational power from AI and cloud intensifies, the seamless synergy between these technologies and our digital infrastructure becomes paramount, giving us great confidence that these investments will position the company for extraordinary future growth.” 

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