NEXTDC cuts FY27 outlook by about $140m as Jemena delays hit M3 Melbourne

NEXTDC lowered its FY27 forecasts on 21 October 2026 because Jemena stopped network works needed to raise grid supply to the M3 data centre in West Footscray, Melbourne. The company now expects net revenue of $475 million to $500 million, against an earlier range of $615 million to $640 million. Underlying EBITDA is now guided at $245 million to $265 million, from $385 million to $410 million. NEXTDC said the earlier ranges included about $140 million of each measure from the affected M3 contracts, and that removing them is the main reason for the change.

Jemena paused parts of the 66kV line works in September, giving safety concerns, blocked access to work sites amid community opposition, and the local council, as road authority, withholding consent during further consultation. It has since told NEXTDC formally that it does not expect to resume before February 2027, and NEXTDC now expects the next lift in grid supply during FY28. Nine described the poles as concrete structures up to 22 metres tall, and ABC reported that residents in Yarraville had obstructed crews.

Chief executive Craig Scroggie said the affected contracts were out of guidance until their contribution could be reliably estimated. Second Order reported that the exclusion also covers M3 capacity already billing, because existing supply cannot be relied on to carry the full power ramp the customer contracted for. Later supply increases depend on transformer projects at Brooklyn Terminal Station, and NEXTDC expects the first to finish later than planned.

A Victorian permit for M3 Stages 6 and 7, sought in February 2026, is also running late. NEXTDC does not expect a decision before 2027, because the state government enters caretaker conventions on 3 November ahead of the 28 November election. The company is assessing the position under the customer contracts, which allow for service level credits on late capacity and, in some circumstances, termination rights, and it is considering whether force majeure relief applies.

NEXTDC has put new development projects and land purchases on hold and will look at capital recycling, including selling some development sites. Nine reported that planned spending this financial year was cut by $750 million and that about $750 million of Sydney and Melbourne sites may be sold. Scroggie said liquidity was about $8.7 billion at 30 September 2026 and covenants were being met. Second Order said drawing the $6.7 billion of senior debt depends on when customers start billing.

The shares closed down 41.72 per cent at $5.35, the worst performance on the ASX200 that day. Scroggie said demand remained strong, telling analysts there was "very little capacity available anywhere, not just in Melbourne or in Australia, anywhere in the world". Residents group Citizens of Tottenham welcomed the delay, and member Sean Brown said "We're not stopping." Group chief development officer Simon Cooper told investors the company was "exploring all avenues", though Nine reported he considered a fully underground network "extremely unlikely". NEXTDC will update the market at its annual general meeting on 20 November 2026.