NEXTDC cuts FY27 guidance as Jemena delays stall M3 Melbourne power supply

NEXTDC has slashed its FY27 net revenue and earnings guidance after electricity distributor Jemena suspended network works required to increase grid supply to its M3 Melbourne data centre, deferring approximately $140 million of revenue and underlying EBITDA from the affected contracts.

The company now expects FY27 net revenue of $475 million to $500 million, down from previous guidance of $615 million to $640 million, and underlying EBITDA of $245 million to $265 million, down from $385 million to $410 million.

Jemena suspended parts of the 66kV line augmentation works that supply power to M3 in September, citing safety concerns and lack of access to work sites due to community and stakeholder opposition, as well as the local council - as the relevant road authority - withholding consent pending further community consultation.

Jemena has formally notified NEXTDC that it does not expect to recommence those works before February 2027.

Based on Jemena's current indicative estimate, NEXTDC said it expects the first increase in grid supply during FY28, with delivery and billing of contracted capacity to follow shortly thereafter.

Further increases in grid supply at M3 depend on upstream transmission projects to install new transformers at the Brooklyn Terminal Station. NEXTDC said it now expects the first of those projects to be completed later than previously anticipated, affecting the timing of capacity expected to convert to billing after FY28.

The Brooklyn Terminal Station projects do not affect the revised FY27 guidance.

Construction of M3 data halls is continuing within the existing buildings; however, the Victorian Government's planning decision on a permit for M3 Stages 6 and 7 - applied for in February 2026 under the Development Facilitation Program - is taking longer than expected, the company stated.

With the state government entering caretaker conventions from 3 November 2026 ahead of the 28 November election, NEXTDC does not expect the decision until 2027. Assuming the permit is granted, the combined delay to grid supply and planning approval pushes delivery of the final stages of M3 capacity further out.

NEXTDC said it is assessing the implications of the delays under the affected customer contracts. Those contracts provide for service level credits where capacity is delivered late or not fully powered and, in some circumstances, give the customer rights to terminate. NEXTDC said it is considering whether force majeure and other contractual relief provisions apply.

"We have taken the affected M3 contracts out of FY27 guidance until we can reliably estimate their contribution. The timing and scale of their contribution remain uncertain," said Craig Scroggie, chief executive officer and managing director at NEXTDC.

Scroggie said the company had paused projects not backed by customer contracts and redirected capital to already-contracted capacity.

"We have approximately $8.7 billion of liquidity at 30 September 2026 and we are in compliance with our covenants," he said.

NEXTDC said it supports Jemena's community consultation process and intends to expand its own community engagement around M3, including through a Board-overseen engagement plan covering construction and operation of the campus.

The company said it has a good relationship with the affected customer and will work constructively with both the customer and Jemena to bring forward power delivery and minimise the impact of the delays.

NEXTDC will provide further updates at its Annual General Meeting on 20 November 2026.