NZX-listed infrastructure investor Infratil has reported strong performance from its 48 per cent-owned Canberra Data Centres following a deal with Microsoft.
Infratil reported CDC achieves $18.9 million in underlying earnings before interest, tax and depreciation for the half year to 30 September, up from 0.6 million in the earlier half year.
The result reflects a full period contribution and change to the accounting treatment of CDC's assets of A$9.7 million.
It also reflects a significant contract with Microsoft which has seen CDC commit to developing a further data centre.
In August, Microsoft unveiled plans to launch two highly-secure Azure regions in Canberra, partnering with CDC to lure government agencies to the cloud.
Available in the first half of 2018, the two new regions will focus on government and their suppliers at federal, state and local levels, offering advanced data analytics, sophisticated data protections and artificial intelligence.
Infratil forecasts current EBITDAF is forecast to improve to a A$70 million run rate by 31 March 2018.
"[The] announcement of partnership with Microsoft is leading to incremental new customer interest in the CDC facilities," it told shareholders today, describing the deal as a strong endorsement of CDC’s offering and a "significant enhancement of the ecosystem".
The deal Increases CDC’s utilisation of existing facilities from 56 per cent to 74 per cent.
"The delivery of CDC’s contract with Microsoft to host hyper-scale cloud services from CDC’s two Canberra based data centre campuses is progressing well (footprint is being progressively handed over in October and November)," Infratil said.
In September CDC started construction works on the new 21MW Fyshwick 2 data centre which will take total capacity to 59MW, up from 30MW at the time of acquisition.
"The sector continues to be boosted by a range of positive developments, with data centres squarely in the sights of infra investors and increasing valuations of comparative companies in the period since the CDC acquisition," Infratil said.
Infratil agreed to acquire its 48 per cent shareholding in CDC for total cash equity consideration of A$392 million in May 2016. The Commonwealth Superannuation Corporation also held 48 per cent alongside the CDC executive with 4 per cent.
CDC currently operates four data centres – Fyshwick 1, and Hume 1, 2 and 3.