DXN Half Yearly Results Announcement

DXN Ltd (ASX: $DXN) has reported its half yearly results for the six months ended 31 December 2023 (1H FY24). The company achieved total sales revenue of $4.5m, marking a 19% increase from 1H FY23. Underlying EBITDA for the half was $0.8m, reflecting a substantial 390% increase from 1H FY23. DXN also raised A$2.1m via an equity placement in the half-year, which has significantly strengthened the company's balance sheet. The successful exit from the Sydney data centre lease is expected to save DXN approximately $1.4m per year in lease charges over the remaining 9 years of the lease.

CEO Commentary on 1H FY24 Results

We are pleased to see the increase in the revenue and underlying EBITDA of the business in the 1st half of FY24. The re-negotiation and exit of the Sydney data centre lease is a key outcome for the Company and will save DXN approximately $1.4m per year in lease charges of the remaining 9 years of the lease. We are also strongly encouraged by the results and opportunities in the Modular Manufacturing business with significant wins in the resources sector and undersea/submarine cable market. In addition, our two remaining corporate data centres in Darwin and Tasmania continue to perform well and are both profitable. We expect to see a continued trend in revenue and profit increases in these two centres. The restructuring program that DXN commenced in FY23 continues to see positive results, with the intent of DXN reaching operating cash flow breakeven and profitability during CY24.

Summary of DXN's Half Yearly Results and Outlook

DXN reported a strong turnaround in its half yearly results, with notable increases in revenue and underlying EBITDA. The successful exit from the Sydney data centre lease is expected to result in significant cost savings for the company. DXN also secured a major contract to build modular cable landing stations, which is anticipated to generate substantial revenues. The company's outlook remains positive, with a focus on expanding the DC modular manufacturing business and achieving operating breakeven and profitability during CY24. With a current cash balance of $2.7m and all payables being current, DXN is well-positioned to pursue its strategic goals and capitalize on the growing demand for modular data centres in the Asia Pacific region.