Key Highlights

  • NEXTDC cut its FY27 net revenue guidance to A$475 million to A$500 million from A$615 million to A$640 million, mainly by excluding M3 Melbourne contracts that contributed about A$140 million in the earlier range.
  • Jemena has told NEXTDC it does not expect to restart its suspended 66kV works before February 2027, and the first increase in grid supply to M3 is now expected during FY28.
  • FY27 capital expenditure guidance falls to A$4,500 million to A$5,000 million, with all new development projects and land acquisitions put on hold.
  • Liquidity stood at A$8,675 million at 30 September 2026, and NEXTDC reported covenant compliance with its earliest scheduled debt maturity in December 2029.

NEXTDC Limited (ASX:NXT) has lowered its guidance for the financial year ending 30 June 2027 (FY27) after the distributor Jemena Electricity Networks (Vic) Ltd suspended parts of the network works supplying its M3 Melbourne data centre. Net revenue is now guided at A$475 million to A$500 million, Underlying EBITDA at A$245 million to A$265 million and capital expenditure at A$4,500 million to A$5,000 million. Liquidity at 30 September 2026 was A$8,675 million.

Jemena Suspends the Works Needed to Lift Grid Supply at M3

The issue centres on 66kV line augmentation works by Jemena, the distributor that supplies power to M3. Jemena suspended parts of them in September 2026 and has formally told NEXTDC it does not expect to restart before February 2027. It attributed the suspension to safety concerns and a lack of access to work sites, arising from community and stakeholder opposition and from the local council, as road authority, withholding consent during further consultation. NEXTDC said it supports the consultation.

Grid supply at M3 is due to rise in stages. On Jemena's current indicative estimate, NEXTDC expects the first increase during FY28, with delivery and billing of the dependent contracted capacity shortly after. Later increases rely on upstream projects to install new transformers at the Brooklyn Terminal Station, the first of which NEXTDC now expects to finish later than previously planned.

The planning permit for M3 Stages 6 and 7 (PA2604231), lodged in February 2026, is also delayed. With Victorian Government caretaker conventions starting on 3 November 2026 ahead of the 28 November State election, NEXTDC does not expect a decision until 2027.

Guidance Reset Removes About A$140 Million From Both Measures

Net revenue, which NEXTDC defines as total revenue less direct costs, is now guided at A$475 million to A$500 million, down from A$615 million to A$640 million given on 27 August 2026. Underlying EBITDA is guided at A$245 million to A$265 million, against A$385 million to A$410 million before. The new ranges exclude the revenue and attributable EBITDA of the affected M3 contracts, including capacity already billing and any potential service level credits. The August guidance included approximately A$140 million of each measure from those contracts, the main reason for the reductions.

Capacity already billing is excluded because existing grid supply cannot be relied on to support the full contracted power ramp in data halls already delivered, and NEXTDC is working with the customer on a revised ramp. Chief Executive Craig Scroggie said the timing and scale of the contracts' contribution remain uncertain, while the capacity stays under contract, subject to the customer's rights. The contracts provide for service level credits where capacity is late or not fully powered, and NEXTDC said credits could reduce Underlying EBITDA below the revised range.

Capex Range Drops to A$4.5 Billion-A$5.0 Billion as New Projects Pause

FY27 capital expenditure is now guided at A$4,500 million to A$5,000 million, A$750 million, or 13% to 14%, below the earlier A$5,250 million to A$5,750 million. The new range includes approximately A$230 million of capitalised interest, which the earlier guidance excluded, and approximately A$500 million of reimbursable customer fitout. Before capitalised interest, the reduction is approximately A$980 million, or 17% to 19%, mainly from deferred spending on uncontracted expansion projects and corporate technology.

NEXTDC has put all new development projects and land acquisitions on hold, limiting spending to contracted capacity due within 12 to 18 months and works near completion. A detailed review of the capital expenditure program will report by the Annual General Meeting on 20 November 2026, and the Board will evaluate capital recycling, including selling selected development sites not needed soon.

Liquidity of A$8,675 million comprises A$1,275 million of cash, A$6,700 million of undrawn senior debt facilities and the A$700 million Hybrid Securities B Delayed Draw Series, drawable until 15 April 2027. NEXTDC complied with its covenants, a gearing ratio of not more than 60% and interest cover of at least 1.5 times, at 30 June 2026 and expects to comply at 31 December 2026. Its earliest scheduled debt maturity is December 2029.

Where the M3 Melbourne Delay Leaves NEXTDC

NEXTDC Limited (ASX:NXT) has removed the affected M3 contracts from its FY27 net revenue and Underlying EBITDA ranges, lowered capital expenditure guidance and paused new development projects. Jemena does not expect to restart its suspended works before February 2027, the first grid supply increase is expected during FY28 and the Stages 6 and 7 decision is not expected until 2027. The company will give further updates at its Annual General Meeting on 20 November 2026.