Saturday, November 25, 2017

Digital Realty sets aside $1bn for capital expenditure in 2017

Provider publishes Q4 and full-year 2016 results where revenue for the first time reached more than $2bn.

Global data centre services provider Digital Realty has posted its financial results for 2016 together with an outlook for 2017 in which the company says it expect capital expenditure to sit between $800m and $1bn.

The company’s revenues for the full-year 2016 increased 21% over the previous year to $2.1bn. Digital Realty says it expects to reach $2.2-$2.3bn revenues in 2017.

Total operating expenses in 2016 accounted to $1.6bn (2015: $1.36bn). Operating income was $497m compared t $401.9 in 2015.

Digital’s Realty Chief Executive Officer A. William Stein said: “We capped off a very successful year in 2016. Data centre demand remains robust, driven by a diverse set of customers across the digital economy.

“We made substantial progress towards our strategic initiatives in 2016 and we look forward to building on this momentum in 2017, coming together as one team, oriented around our customers”.

Speaking to investors and analysts on a conference call now transcribed by Seeking alpha, Stein and other executives spoke of the future of the company.

He said: “We are on track to rollout another 17 sites across another nine markets in 2017.

“In addition, we will be again offering Layer 3 capabilities during the second quarter. Layer 3 capabilities are a requirement to enable enterprise customers to reliably consume SaaS or Software-as-a-Service offerings from a private cloud environment.”

Scot Peterson, chief investment officer at Digital Realty, said: “In 2017, we will focus on integration of systems and processes. Over there, we are migrating the Amsterdam one connectivity ecosystems over to Science Park tower.

“And we have our colo expansion plans into new locations in the European market, are underway. We’re seeing good customer activity and we’re cross-selling products and I think all that bodes well for revenue synergies.

“On further inorganic M&A, as we always say, we look at everything. We’re looking for opportunities that are strategic and complementary, that we can prudently finance and represent a good investment value for our shareholders. And by that we mean accretive.

“I think as a general statement that I can say that we are not looking to acquire assets just to get bigger.”