Shares in data centre operator NextDC dropped around 40 per cent on Wednesday after the company slashed its earnings guidance, blaming delays to power upgrades for its West Footscray site in Melbourne.
The ASX-listed company, one of the country’s 100 biggest, now expects net revenue of $475 million to $500 million this financial year, well below its earlier $615 million to $640 million. Operating profit guidance fell from $385 million to $410 million down to $245 million to $265 million.
The cause is a dispute over towering power poles. Network operator Jemena paused works needed to lift grid supply to the facility after residents in Yarraville resisted the installation. NextDC says the next supply boost is not expected until 2028, so it has pulled the affected contracts from its FY27 outlook.
The company says it is exploring options including moving the poles or putting cables underground, and has put new projects and land purchases on hold. Its application to double the site has also been pushed back until after the Victorian election. Separately, Senator David Pocock has floated a 5 per cent levy on data centres.
What it means for your money
If you hold NextDC directly or through an index fund or super option, expect a hit to your balance. It is a reminder that fast-growing tech infrastructure stocks can be exposed to local planning and power risks, so check how concentrated your portfolio is in one theme.
Source: ABC Business