Business

NEXTDC cuts revenue guidance by A$140m as M3 power slips to FY28

NEXTDC revised its FY27 net revenue guidance to A$475 million to A$500 million, down from A$615 million to A$640 million, after grid distributor Jemena Electricity Networks suspended the 66kV line augmentation works needed to deliver more power to M3 Melbourne.

New concrete power poles and roadworks barriers on a residential street in Melbourne's inner west, with a data centre behind

Digitally illustrated image.

By Bushletter Newsroom · 21 October 2026

TLDR

NEXTDC slashed its FY27 net revenue guidance by roughly A$140 million after grid distributor Jemena suspended 66kV line works for its M3 Melbourne data centre, citing community opposition and absent council consent. The next power increase for M3 is now expected in FY28, and NEXTDC has frozen all new development projects pending a board capital review.

KEY TAKEAWAYS

01FY27 net revenue guidance fell to A$475m to A$500m, down from A$615m to A$640m, after M3 contracts were removed.

02Jemena does not expect to restart 66kV works before February 2027, pushing M3's next power increase to FY28.

03About A$140 million of net revenue and underlying EBITDA from affected M3 contracts was stripped from guidance entirely.

04All new NEXTDC development projects and land acquisitions are on hold pending a board capital review.

05Shares fell roughly 40 per cent on resumption of trade despite A$8.7 billion in available liquidity.

Jemena's suspension triggers guidance overhaul

NEXTDC revised its FY27 net revenue guidance to A$475 million to A$500 million, down from A$615 million to A$640 million, after grid distributor Jemena Electricity Networks suspended the 66kV line augmentation works needed to deliver more power to M3 Melbourne.^[1] The ASX disclosure, dated 21 October 2026, also lowered FY27 underlying EBITDA guidance to A$245 million to A$265 million, down from A$385 million to A$410 million.^[1]

Chief executive Craig Scroggie said: "Jemena has suspended parts of the network works required for the next increase in grid supply to M3 Melbourne. Jemena has attributed the suspension to community and stakeholder opposition to the works and to the absence of local council consent pending further consultation. On Jemena's current indicative estimate, we expect that increase during FY28."^[1]

What Jemena suspended and when

Jemena suspended parts of its 66kV line augmentation works for M3 Melbourne in September 2026, citing safety concerns and lack of site access, and does not expect to recommence them before February 2027.^[1]^[2]

M3 Melbourne, located in West Footscray, is a 225 MW Tier IV certified data centre designed as a digital gateway for Victoria.^[4] A planning application for M3 Stages 6 and 7 (PA2604231) was lodged in February 2026 under the Victorian Government's Development Facilitation Program, with a decision expected only after the 28 November 2026 state election, likely in 2027.^[3]

A$140m stripped from guidance

Scroggie confirmed the precise figure removed from the company's forward estimates. "We have taken the affected M3 contracts out of FY27 guidance until we can reliably estimate their contribution. The August guidance included approximately A$140 million of each of net revenue and Underlying EBITDA from those contracts. The timing and scale of their contribution remain uncertain."^[1]

Capital expenditure guidance also moved lower, to A$4,500 million to A$5,000 million for FY27, down from A$5,250 million to A$5,750 million, including about A$230 million of capitalised interest.^[1]

Project freeze and potential site sales

NEXTDC has paused all new development projects and land acquisitions, and its board will evaluate capital recycling opportunities including potential sales of selected development sites.^[1] Shares fell roughly 40 per cent when trading resumed after the announcement.

Scroggie said the company's balance sheet remained intact. "We have approximately A$8.7 billion of liquidity at 30 September 2026 and we are in compliance with our covenants."^[1] That liquidity comprised A$1.275 billion of cash and A$7.4 billion of undrawn senior debt facilities as at 30 September 2026.^[1]

This article contains analysis and commentary on market conditions. It does not constitute financial, investment, or professional advice. Past performance is not indicative of future results. Always consult a qualified adviser before making financial decisions.

SOURCES & CITATIONS

FREQUENTLY ASKED QUESTIONS

Why did NEXTDC cut its FY27 guidance?

Grid distributor Jemena Electricity Networks suspended the 66kV line augmentation works needed to deliver more power to M3 Melbourne, citing community and stakeholder opposition and the absence of local council consent. Without that additional grid supply, NEXTDC removed the affected M3 contracts from its FY27 forecasts entirely.

When will M3 Melbourne get its next power increase?

Based on Jemena's current indicative estimate, NEXTDC does not expect the next grid supply increase to M3 Melbourne before FY28. Jemena does not expect to recommence the suspended 66kV works before February 2027.

How much did the guidance change?

FY27 net revenue guidance was cut to A$475 million to A$500 million from A$615 million to A$640 million. Underlying EBITDA guidance fell to A$245 million to A$265 million from A$385 million to A$410 million. Both cuts reflect the removal of approximately A$140 million in revenue and EBITDA from the affected M3 contracts.

What is NEXTDC doing with its capital plans?

NEXTDC has paused all new development projects and land acquisitions. Its board is evaluating capital recycling options, including potential sales of selected development sites. Capital expenditure guidance for FY27 was also reduced to A$4,500 million to A$5,000 million from A$5,250 million to A$5,750 million.