NEXTDC (ASX:NXT) share price drops on AGM update

NEXTDC is holding its AGM today…
The post NEXTDC (ASX:NXT) share price drops on AGM update appeared first on The Motley Fool Australia. –

The NEXTDC Ltd (ASX: NXT) share price is trading lower following the release of its annual general meeting update.

At the time of writing, the data centre operator’s shares are down 0.5% to $12.55.

This appears to have been driven by weakness in the tech sector today, which offset any positives from its update.

What was said at the annual general meeting?

At the annual general meeting, management spoke about its performance in FY 2021 and its expectations for the future.

In respect to the latter, the company revealed that it continues to look at its opportunities in the Asia market.

NEXTDC’s CEO, Craig Scroggie, commented: “Travelling across Asia has proven to be challenging during COVID-19. With travel starting to return for the vaccinated, our team is now actively reviewing expansion opportunities in the world’s fastest growing regions. A major priority is securing land in key markets that will drive our next decade of digital growth in Asia.”

“Like all activities the Company undertakes, we view these opportunities as transformative in nature and remind ourselves that people frequently overestimate what they can achieve in one year and underestimate what can be built in a decade,” he added.

Data is the new oil

Management also spoke about the increasing importance of data, referring to it as the new oil.

Mr Scroggie said: “Data is the world’s most valuable commodity, playing a core role at the heart of commerce, government and community. Its rise is best demonstrated by the outstanding success of companies like Amazon, Netflix, Google, Microsoft, Apple and Atlassian to name a few. We can be sure there will also be new start-ups and innovations that will rise as rapidly as these front-runners. The beauty of building an infrastructure platform with the geo-diversity and scalability that we have is that it caters to all.”

This could bode well for demand for NEXTDC’s data centres in the future.

FY 2022 guidance update

At the event, NEXTDC also provided an update on how it is performing in relation to its guidance for FY 2022.

Positively, the company is on track to achieve its guidance this year. It has reaffirmed:

Data centre services revenue in the range of $285 million to $295 million (16% to 20% growth)
Underlying EBITDA in the range of $160 million to $165 million (19% to 23% growth)
Capital expenditure in the range of $480 million to $540 million

Management notes that this is being driven by strong growth in recurring data centre services revenue, underpinned by long-term customer contracts.

The post NEXTDC (ASX:NXT) share price drops on AGM update appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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