NextDC shares plunge 39.5% after slashing earnings forecast

NextDC shares fell 39.5% on Wednesday after the data center operator lowered its fiscal 2027 financial outlook, citing power supply disruptions at its M3 Melbourne facility. The company attributed the delays to infrastructure upgrades suspended by electricity distributor Jemena amid local community opposition.

NextDC reduced its fiscal 2027 revenue guidance to a range of A$475 million to A$500 million, down from an earlier forecast of A$615 million to A$640 million. The company also cut its underlying earnings before interest, taxes, depreciation and amortization (EBITDA) forecast to A$245 million to A$265 million, from the previously projected A$385 million to A$410 million.

According to NextDC, Jemena does not expect to resume work on the power infrastructure before February 2027. The distributor cited safety concerns, restricted site access due to community opposition, and a lack of local council consent pending further consultation as reasons for the suspension.

In a research note, Citi warned that these power delays could impact NextDC's earnings beyond fiscal 2027. The bank pointed to approval delays for the M3 expansion and a longer-than-expected timeline for transformer upgrades as key factors. The incident highlights a broader trend of opposition to data center construction, driven by concerns over environmental and community impacts.

NextDC shares have now declined for seven consecutive weeks and are positioned for an eighth straight weekly loss.