The NextDC Limited (ASX: NXT) share price will be on watch on Friday after the data centre operator announced its full-year results.
As you can see in the chart below, the NextDC share price has been a beneficiary of COVID-19 dynamics as companies move their operations to the cloud.
What did NextDC report?
Total revenue grew by 14% to $205.2 million, landing at the higher end of the company’s guidance range of $200 million to $206 million. Revenue growth was largely driven by increased utilisation of data centre services across the business.
Underlying EBITDA also came in at the upper end of guidance, climbing 23% to $104.6 million.
At the end of the period, NextDC was billing for 52.8 megawatts of capacity, up from 37.7 megawatts in FY19. The company added 20 megawatts of capacity during FY20 and 89% of installed capacity was contracted at 30 June.
Capital expenditure for the year was $418 million, up 18% on the prior year and ahead of guidance of between $340 million and $380 million.
Direct costs rose 15% to $38.1 million, increasing in line with customers’ power consumption and partially offset by improvements in power usage efficiency and energy costs.
Facility costs, which includes property costs, maintenance, and facility staff, increased by 21% to $21.9 million, while corporate costs came in 5% higher at $35.8 million.
On the bottom line, NextDC reported a loss before tax of $18.7 million, expanding from a loss before tax of $16.1 million in FY19. After factoring in income taxes, the company recorded a loss of $45.2 million, which compares to a loss of $9.8 million in the prior year.
Balance sheet & funding
NextDC completed a bumper $862 million capital raising during FY20, comprising a $672 million institutional placement in April and a $190 million share purchase plan completed in May.
New shares were issued at $7.80 per share, which represented a 15% discount to NextDC’s last closing price at the time of the announcement in early April.
Bolstered by this raising, NextDC finished the year with cash and cash equivalents of $893 million. Combined with an undrawn senior syndicated debt facility of $300 million, the company had $1.19 billion in available liquidity at 30 June.
Outlook & guidance
NextDC bucked the trend and provided forward guidance for its key metrics.
Based on current billing, contracted utilisation levels and expected new customer contracts, the company is expecting:
- Data centre services revenue in the range of $242 million to $250 million – the mid-point of which represents 22.5% growth on FY20;
- Underlying EBITDA in the range of $125 million to $130 million – the mid-point of which represents 21.9% growth on FY20; and
- Capital expenditure in the range of $380 million to $400 million – the mid-point of which represents a 6.7% decline on FY20.
Commenting on the results, CEO and managing director Craig Scroogie said: “Today’s results are a testament to the Company’s pursuit of excellence to provide the industry’s highest standard of data centre services. Whilst everyone is adjusting to the new normal presented by the COVID-19 global pandemic, it is pleasing that NEXTDC has been able to continue delivering on market expectations, with its FY20 result coming in at the top-end of earnings guidance provided at the start of the financial year.”
For a run-down on the ASX shares that have reported this month, check out Rask Media’s ASX reporting season calendar – you’ll find links to our daily coverage in the calendar.
