NextDC sharply lowered its fiscal 2027 financial forecasts after electricity infrastructure delays disrupted expansion at its flagship M3 data center in Melbourne.
The revised guidance sent the Australian data center operator's shares tumbling, with the selloff erasing roughly A$3 billion in market value.
NextDC now projects revenue of A$475 million to A$500 million, down from its earlier forecast of A$615 million to A$640 million.
Underlying earnings before interest, taxes, depreciation and amortization are expected at A$245 million to A$265 million, compared with the previous range of A$385 million to A$410 million.
Community Opposition Stalls Power Upgrades
The disruption centers on suspended infrastructure upgrades at the M3 Melbourne facility, where plans involving 22-meter power poles have drawn strong opposition from nearby residents.
NextDC said electricity distributor Jemena did not expect work to resume before February 2027.
According to NextDC's account, Jemena cited safety concerns, restricted site access due to community opposition, and the absence of local council consent pending further consultation.
Shares fell 39.5% in Wednesday trading, according to CNBC, while The Wall Street Journal reported a decline of about 42%.
The Australian Financial Review reported the stock hit a nine-year low and had already declined for seven consecutive weeks, with an eighth weekly drop on track.
Citi warned in an analyst note that delayed approvals for the M3 expansion and a longer-than-expected timetable for transformer upgrades could weigh on earnings beyond fiscal 2027.
NextDC is considering changes to its capital allocation and construction plans, with The Australian Financial Review reporting it could sell assets, reduce spending, or place power cables underground at the Melbourne site.
The setback adds uncertainty to NextDC's expansion strategy across Australia and the Asia-Pacific region, which positions its facilities to serve demand for digital infrastructure.
Separately, Australian Treasurer Jim Chalmers said the government supports investment in data centers and artificial intelligence infrastructure when projects serve the national interest.
Speaking to CNBC's Squawk Box Asia on Wednesday, he said the government was finalizing national investment standards to address concerns surrounding AI deployment.
His remarks come as data center projects face growing scrutiny over their effects on nearby communities and the environment.
