Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

Nextdc (ASX:NXT) share price in focus on international expansion plans

The Nextdc Ltd (ASX:NXT) share price is under the spotlight after the business announced two new data centre developments. 

The Nextdc Ltd (ASX: NXT) share price is under the spotlight after the business announced two new data centre developments.

Nextdc is one of the largest data centre-as-a-service providers in south-east Asia. It says it’s building the infrastructure platform for the digital economy, delivering the power, security and connectivity for global cloud providers, enterprise and government.

International expansion plans

It is expanding into Kuala Lumpur, Malaysia (with a data centre called KL1) and Auckland, New Zealand (AK1).

Nextdc said it’s going to fund these two developments, as well accelerating a fit out at S3 (Sydney), with a capital raising for $618 million.

KL1 is located around 10km from the Kuala Lumpur CBD, with total power planned of 65MW.

AK1 is located in the Auckland CBD, with total power planned of at least 10MW.

Both of these new sites are expected to reach practical completion of the phase 1 build in the first half of FY26.

S3 accelerated fit out

Nextdc has benefited from recent contract wins, increasing the contracted utilisation by 43%, or 35.9MW, to 120 MW. Due to these wins, S3 has now achieved contracted utilisation equivalent to 46% of total planned capacity, with the overall contracted utilisation “significantly exceeding” the facility’s built capacity.

To meet that demand, the business’ decision to accelerate its plans will seek to ensure that it can meet customer obligations and “continues to be best positioned for future growth.”

Capital raising

The capital raising comprises a 1 for 8 pro-rata accelerated non-renounceable entitlement offer.

This offer is being priced at a Nextdc share price of $10.80 per new share, which represents an 8.3% discount to the last closing price.

It will invest A$250 million in the development of KL1, A$140 million to develop AK1 and A$150 million on accelerating the fit out of S3.

Upgraded FY23 guidance

Nextdc has increased its FY23 data centre services revenue to a range of A$350 million to A$360 million, up from A$340 million to A$355 million.

Underlying EBITDA (EBITDA explained) is now guided to be between A$192 million and A$196 million – the guidance has been tightened from a range of between A$190 million to A$198 million.

Capital expenditure is in the range of A$670 million to A$720 million, up from A$620 million to A$670 million. That has been updated to include the recently-acquired land for KL1 of around A$53 million.

Final thoughts on the Nextdc share price

Nextdc shares have gone up significantly over the past six months (around 28%), so it’s a good time to raise capital. The business is seeing a lot of growth with the strong demand for cloud services.

But, I’m not sure how strong the company’s competitive advantages are and what its future profitability will be. So, it’s an interesting business but not one I’m looking to invest in. There are other ASX growth shares I’d rather pick.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
Skip to content