Real profit drivers at CDC not what you think?
Let's look at this calculation in a bit more detail now. I have added some extra explanatory information in bold.
Quote:
Originally Posted by
Ferg
EBITDAF / ICT MW = A$2m
EBITDAF / A$2m = ICT MW
FY24 EBITDAF NZ$292m (AR24 p25) converted at 0.9271 (AR24 p80) = A$271m (confirmed on CR p27)
ICT MW = A$271m/ A$2m per MW= 135.5MW
Total built capacity = 302MW (as at the end of the reporting period)
ICT MW / Capacity = 135.5MW / 302MW = 45% (based on end of year capacity)
From AR2024 p32:
"Performance highlights include delivering a record 200MW in new contracted capacity (includes reservations and rights of first refusal), its largest ever addition in 12 months"
This implies the CDC data centre capacity at EOFY2023 was just 102MW. Taking a linear average through the year would suggest an average annual data centre capacity of 202MW ( [102MW+302MW]/2 ).
ICT MW / Capacity = 135.5MW / 202MW = 67% (based on linearly averaged over the year capacity)
That sounds better than a 45% utilisation rate doesn't it? (or does it?, see last section of this post)
Quote:
Originally Posted by
Ferg
Rack utilisation = 89% but note says "Including white space and reserved."
So that leaves 44% white space and reserved but we don't know if 89% is a point in time value or an annual average.
This is the way I see the new build of a CDC data centre working, given they seem to be largely in the private cloud space. A green field site will be quickly internally fitted up with rows of interconnected cabinets all computer ready so that clients can 'fill the racks' with their own computing gear. Exactly the number of clients that put their gear into these cabinets on 'day 1' is not so important. From a fit out perspective, it would make much more sense to have all cabinets customer ready on the day the data centre opened. I am thinking of an unconnected by empty cabinet as 'white space' in this discussion context. This would lead me to think that the percentage of rack space utilised, while it is a measure of how quickly a particular CDC centre might be filling up, is not necessarily a statistic of particular concern (If CDC did not expect their individual cabinets to fill up in reasonably quick time, then they would not have built them).
Quote:
Originally Posted by
Ferg
The 135.5 is an annual average f)or FY24. So the 45% average could be say 35% growing constantly to 55% at year end. Too many unknowns.
So CDC is dependent on the building / development profits while they increase utilisation percentage.
With respect, I don't think this is how the data centre business model works. Businesses come to CDC with a data centre need. They agree to sign up to a certain computing processing capacity in kW or MW with CDC to fulfill that anticipated need. Thus CDC gets to be the counterparty to a series of contracts which add up to a total in MW that sums to the capacity of the data centre (100% data centre utilisation, at least in theory). However in practice not all clients would need all of their data processing capacity all of the time. For example some companies might run a small local server that 'backs up to the cloud' overnight. That means despite having signed up to 'x'MW of processing capacity, they may only 'need' that for a few hours a day. That particular customer cabinet at CDC could be turned off most of the time, saving CDC money.
I expect CDC to be profitable at the individual data centre contract level, no matter what the actual utilisation rate of their facilities is. But it strikes me that the most profitable customers might be the ones that sign up for x MW of data processing but then don't use it much of the time. This would show up in the data operating statistics as 'underutilisation'. But because certain customers pay for utilisation and then don't use it all, all the time this is actually a good thing for CDC. Because CDC get to bank the money, but they have reduced consummate operating expenses. Consequently I would suggest that a lower power utilisation percentage at a CDC data centre would likely be more profitable for CDC. Not less as you suggest. But then I don't work in a CDC data centre. So what do I know?
SNOOPY