NEXTDC profits slide despite decent first-half revenue

NEXTDC profits slide despite decent first-half revenue

NEXTDC (ASX: NXT) has reported a significant profit drop, despite achieving sound revenue during 1H18.

The group's profits dived by 56 per cent to $8.4 million, down from the $19.3 million figure it achieved during the first-half FY17.

In complete contrast to its profit result, NEXTDC recorded a revenue boost of 32 per cent to hit $77.5 million. 

The company has increased construction of key infrastructure projects, including opening two new data centre facilities in Brisbane and Melbourne, completing the construction of a new Sydney data centre, and expanding existing facilities in Sydney and Perth.

The group also acquired a significant stake in Asia Pacific Data Centre Group (ASX: AJD) worth 29.2 per cent of the company.

In December, NEXTDC announced its intention to wind up Asia Pacific Data Centre (APDC) based on "elevated concerns" it holds about 360 Capital Group's ability to manage APDC.

The two companies were engaged in an ongoing battle to takeover APDC throughout 2017, but 360 Capital outbid NEXTDC and holds the majority of shares in the company.

NEXTDC says the significant spend on infrastructure projects is part of its strategy to be well and truly ahead of its competition.

"NEXTDC has a clear strategy to differentiate its services through in-house engineering innovation and the adoption of new technologies and cooling systems," says the company in its first-half Director's report.

"These investments will position us to deliver significant customer benefits, reinforce our market differentiation over the longer term and deliver scalable growth, reducing operating costs and increasing revenue."

The group has signalled a bright future, flagging significant orders at the Sydney data centre site for more than 5MW of capacity. Revenue recognition for these orders will commence in FY19.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

From pandemic side hustle to multi-million dollar business: Meet Ling Fung
Partner Content
Ask any parent, and they’ll tell you: preparing for a new baby is no easy task.&n...
Metro Baby
Advertisement

Related Stories

ACCC gives Compare the Market operator green light for iSelect takeover

ACCC gives Compare the Market operator green light for iSelect takeover

The Australian Competition & Consumer Commission (ACCC) has ann...

Sales software group Bigtincan receives $442m takeover offer from SQN

Sales software group Bigtincan receives $442m takeover offer from SQN

Sales performance software company Bigtincan (ASX: BTH) has been on...

How Sourci made it: Meet the founders behind Australia’s new e-commerce wave

How Sourci made it: Meet the founders behind Australia’s new e-commerce wave

In just four short years the co-founders of product development con...

Competition watchdog sniffs at Cochlear-Oticon acquisition

Competition watchdog sniffs at Cochlear-Oticon acquisition

The management at Cochlear (ASX: COH) are hoping to add an extra 75...