NextDC reports profit surge for FY17

NextDC has multiplied its profit over the year from AU$1.8 million in FY16 to AU$23 million in the most recent financial year.
Written by Tas Bindi, Contributor

Australian-listed datacentre company NextDC has reported an after-tax profit of AU$23 million for the full year ended June 30, 2017, more than 12 times the AU$1.8 million reported in the previous corresponding period.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) surged 76.9 percent from AU$27.7 million in FY16 to AU$49 million in FY17.

Total revenue rose 33.2 percent year on year from AU$92.8 million to AU$123.6 million in the last financial year.

Datacentre services generated AU$117.6 million in revenue in FY17, up 31.7 percent from the AU$89.3 million reported in FY16, and representing more than 95 percent of NextDC's total revenue.

At the close of the financial year, NextDC had 772 customers, up 19.3 percent from 647 customers in FY16. Number of cross connects also increased 38.6 percent over the year from 4,575 to 6,342.

Cash and term deposits stood at AU$368.3 million at the close of the most recent financial year.

The datacentre company's CEO Craig Scroggie said NextDC's FY17 results, coupled with liquidity greater than AU$600 million, means the company is in an "outstanding" position to take advantage of current and future customer opportunities.

The company has also increased its senior secured debt facilities from AU$100 million to AU$300 million, though the facilities remain undrawn.

In FY17, the company invested AU$159 million in new and existing developments, including additional data halls in its M1 and S1 datacentres.

S1's planned capacity has been upgraded from 15MW to 16MW, while C1's planned capacity has been upgraded from 0.7MW to 2MW.

NextDC's AU$75 million B2 datacentre in Fortitude Valley, Brisbane is on track for completion by the end of 2017.

Its AU$85 million M2 datacentre in Tullamarine, Melbourne is similarly expected to be ready by the end of the year. B2 and M2's planned capacities have been increased to 12MW and 40MW, respectively.

Development of its S2 datacentre -- with a target capacity of 30MW -- has been approved under a 45-year "ground lease arrangement", and development is currently underway. NextDC plans to fund and retain the base building structure.

As of June 30, 2017, 87.5 percent of installed capacity -- 31.5MW out of 36MW -- has been contracted.

"We are currently in advanced negotiations in relation to several large customer opportunities, which are likely to result in a significant increase in the company's contracted utilisation base," Scroggie said in a statement.

NextDC is currently awaiting formal acceptance of its proposal to acquire Asia Pacific Data Centre (APDC) for a per-share price of AU$1.87.

The company's latest offer represents a 19.5 percent premium over APDC's closing share price of AU$1.565 on May 1, the day before rival bidder 360 Capital acquired its initial 19.9 percent stake in the property trust for AU$1.56 a share.

In the absence of a better deal -- 360 Capital's offer of AU$1.80 per share remains unchanged as of Thursday -- APDC's shareholders backed NextDC's offer, citing an independent report that described the offer as fair and reasonable.

NextDC currently owns 21.1 percent of APDC and is the sole tenant of its datacentre facilities in Sydney, Melbourne, and Perth. The company was prompted to submit an acquisition offer because of concerns around 360 Capital as a potential landlord.

Reports suggest the rival bidder will submit another offer.

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