CDC Data Centres NZ swings to loss despite rental growth

CDC Data Centres NZ increased rental income and operating profit during the year ended 31 March 2026. However, higher financing costs and a large fair value loss on investment properties resulted in a net loss after tax.

Rental income rose 55.7% to NZD $115.9 million, up from NZD $74.4 million a year earlier. Other income increased to NZD $18.6 million from NZD $13.9 million, taking total revenue to NZD $134.5 million.

Cost of sales increased to NZD $17.2 million from NZD $12.4 million, resulting in gross profit of NZD $117.3 million, compared with NZD $76.0 million in the previous year.

Operating growth

Operating performance strengthened during the year. Results from operating activities increased to NZD $94.5 million, up from NZD $58.0 million in FY2025.

Staff costs were broadly stable at NZD $11.0 million, while other operating expenses rose to NZD $11.7 million from NZD $7.0 million. Depreciation and amortisation remained relatively low at NZD $227,000.

Net cash generated from operating activities also improved. Operating cash flow increased to NZD $60.6 million, compared with NZD $57.9 million a year earlier.

Customer receipts rose to NZD $139.4 million, while payments to suppliers and employees increased to NZD $54.2 million.

Valuation impact

Despite stronger operating earnings, non-operating items significantly affected the company's financial results. Net financing costs increased to NZD $27.3 million, compared with NZD $9.0 million in FY2025.

The company also recorded a NZD $145.6 million fair value loss on investment properties. This compares with a NZD $588.5 million fair value gain recorded in the previous financial year. Foreign exchange movements produced a NZD $45.9 million loss, while derivative fair value movements generated a NZD $955,000 loss.

Combined, these items resulted in net finance costs of NZD $219.7 million, reversing a net finance income position of NZD $579.6 million reported in FY2025.

The company reported a loss before tax of NZD $125.2 million, compared with a profit before tax of NZD $637.6 million a year earlier.

After recording an income tax benefit of NZD $37.6 million, CDC Data Centres NZ reported a net loss after tax of NZD $87.7 million. The previous year delivered a profit after tax of NZD $458.0 million.

Asset base

Total assets increased to NZD $2.03 billion at 31 March 2026 from NZD $1.92 billion a year earlier.

Investment properties remained the company's largest asset, increasing to NZD $1.93 billion from NZD $1.87 billion. Right-of-use assets also increased substantially to NZD $37.0 million, compared with NZD $2.1 million in FY2025.

Cash and cash equivalents rose to NZD $15.8 million, up from NZD $10.8 million.

Trade and other receivables declined to NZD $8.6 million from NZD $13.4 million.

Funding changes

Total liabilities almost doubled during the year to NZD $1.32 billion, compared with NZD $668.2 million previously.

Related party loans increased significantly to NZD $994.8 million from NZD $331.4 million. Deferred tax liabilities declined to NZD $250.3 million from NZD $285.3 million.

Total equity fell to NZD $716.1 million from NZD $1.25 billion.

The decline reflected the annual loss together with a return of capital during the year. Share capital decreased from NZD $603.4 million to NZD $157.6 million following the capital return, while retained earnings declined to NZD $553.9 million.

Cash flows from financing activities reflected these changes. The company returned NZD $444.3 million of equity to shareholders and received NZD $617.6 million in borrowings during the year.

Expansion plans

Net cash used in investing activities totalled NZD $229.1 million, primarily reflecting acquisitions of investment properties and land amounting to NZD $228.9 million.

After the balance date, the company entered into a 14-megawatt, 25-year contract, including renewal options. The agreement has been assessed as a material non-adjusting event and is expected to become operational during FY2027.