NextDC ploughs $221m into data centres, gets $3m back

NextDC reported its first ever positive earnings, after spending hundreds of millions of dollars to establish its five data centres.

The half year to 31 December saw NextDC post $3 million of positive earnings before interest, tax, depreciation and amortisation. The result represented an almost 200 percent improvement on the equivalent period the previous year, when the company copped a $3.4 million loss.

"The half-year ended December 2014 represents a pivotal period with NEXTDC generating its first positive EBITDA as well as operating cash flows," said NextDC chief Craig Scroggie.

The company has invested at least $221 million in fitting out its network of five data centres, growing the capacity from around 2MW in the second half of 2012 to 20.25MW today. At 31 December, NextDC had 5.8MW spare capacity ready to sell.

A NextDC spokesperson said that the total spend would be even higher if construction costs are included. However, building expenditure is no longer counted in NextDC's numbers as the assets were sold to the Asia-Pacific Data Centre Group for $138.8 million in late 2012.

[Related: NextDC triples data centre revenue, loses $23m]

NextDC's half-year report is eye-watering evidence of the high cost to enter the co-location industry. The publicly listed company has spent $85 million on its Melbourne M1 Centre, $66 million on Sydney S1, $34 million on Perth P1, $28 million on Brisbane's B1 and $7 million on Canberra C1.

Melbourne is its most profitable centre, with earnings of $8.4 million, while Sydney generated $1.3 million in EBITDA and Brisbane posted $3.7 million. Overall, NextDC generated $13.4 million in underlying earnings for the half-year.

"We are pleased with the EBITDA contributions that M1 Melbourne, S1 Sydney and B1 Brisbane now make to the group. The strong EBITDA margins being achieved at each site are only possible through the efficiency and scale of our operations and the hard work of our great team," Scroggie said.

NextDC copped a $23 million net loss for the 2014 financial year, while the first half of 2015 saw a $5.8 million statutory net loss.