NextDC Shares Plummet 40% After Melbourne Power Delays
NextDC slashed its 2027 earnings forecasts and paused new developments after community opposition delayed critical power upgrades at its M3 Melbourne data center.
Shares of NextDC plummeted between 39.5% and 45% on Wednesday, hitting an eight-year low of $5.48. The crash followed a sharp reduction in fiscal 2027 guidance, with revenue forecasts lowered to A$475 million–A$500 million from an initial A$615 million–A$640 million. Underlying EBITDA was also cut to A$245 million–A$265 million from A$385 million–A$410 million.
The financial downturn stems from power supply delays at the M3 Melbourne facility in West Footscray. Electricity distributor Jemena suspended network upgrades in September after intense community opposition to the installation of 15-meter-high power poles in Yarraville. Jemena cited safety concerns and a lack of local council consent for the works and does not expect to resume before February 2027. Consequently, NextDC now expects the next grid supply increase not until 2028.
In response, NextDC has shelved all new development projects and land acquisitions for the foreseeable future and is reviewing its spending program, reducing its capital expenditure outlook to A$4.5 billion–A$5 billion. The company is exploring alternatives such as undergrounding electrical cables or selling non-essential development sites. Further complications include slow transformer installation at the Brooklyn Terminal Station and a pending planning permit from the Victoria State Government, which has delayed a proposal to double the center's size until after the November state election. The company is also considering force majeure options.
