Good morning and welcome to the 14th Annual General Meeting of NEXTDC Limited. My name is Doug Flynn and I'm the Chairman of NEXTDC. Thank you for attending and let me take a moment to outline today's proceedings. You'll have the opportunity to participate today irrespective of whether you're here in person or attending virtually. For those online, the platform will allow you to ask questions via the website, to vote using the electronic voting card. Links to the online guide can be found in your AGM Notice Letter in the Notice of Meeting, or you can also go directly to the Investor Section of the NEXTDC website. A link can also be found in the portal you are now viewing. If we experience any technical issues that have an impact on aligning the two audiences attending this meeting, I'll assess the circumstances and communicate further with you.
I've been informed that a quorum is present. Accordingly, I declare the meeting open. Let me introduce you to my fellow Directors. Here with me in Sydney are Mr. Stuart Davis, Dr. Greg Clark, Ms. Jennifer Lambert, Dr. Eileen Doyle, Mrs. Maria Leftakis, and Mr. Steve Smith. Our CEO and Managing Director, Mr. Craig Scroggie, is also in attendance together with our Company Secretary, Mr. Michael Helmer. On your screen, you will also see our leadership team, and each of them are joining the AGM today. Our CFO, Mr. Oskar Tomaszewski, will be managing the shareholder questions on the web interface, so I'll refer to him when it comes time to answer any questions shareholders have submitted. The Notice of Meeting was made available to all shareholders on 21 October 2024, and I will take it as read.
I can confirm that the holders of approximately 450.4 million ordinary shares, or 70.2% of the company's total shares outstanding, have submitted their proxies. The annual financial statements of the company and its controlled entities, as well as the reports of the Directors and Auditors for the year ended 30 June 2024, have been published and distributed to Shareholders. They can also be accessed at our website. Our auditor, Mr. Michael Shewan from Pricewaterhouse, is also present. Mike is available to answer questions relating to the conduct of the audit and audit report and accounting policies and the preparation of the financial statements. The auditor's report is in our annual report, which is also available at our website. Today, I intend to provide a brief overview of our performance in the past year, and our CEO, Craig Scroggie, will update you on business activities.
After that, we'll turn to the formal business of the meeting. As part of receiving the financial statements and reports, we will also take questions in relation to the Board, management, or the auditor. Because we're conducting today's meeting both in person and online, I'll explain the process to ensure you are clear on how to use the platform to vote and ask questions. For those joining us online, voting on the resolutions will be conducted by a poll using the electronic voting card you receive after clicking the Get a Voting Card button. Shareholders can submit written questions on specific issues or specific resolutions during the meeting by clicking on the Ask a Question button. I encourage shareholders who have questions to submit to do so as soon as possible. A shareholder telephone line was made available for use for audio questions with pre-registration required.
Information on how to use this facility is available in the online guide. If you have any trouble using the platform or dialing facility, please check the online guide on the NEXTDC website or contact the helplines shown on screen. If you're attending in person, there are also some matters to note. You should have registered your attendance as you entered the room today. If any member or proxy holder has not registered their attendance at the door, please do so now. Staff from Link are here to assist you. Visitors are also registered electronically on Link's meeting registration system. If you wish to speak on a matter at an appropriate time, please raise your hand and someone will bring you a microphone to ask your question. When you ask your question, please give your name and the shareholder you represent.
It would be appreciated if all mobile phones are switched off and recording devices are not used. A nd with that, I will move to my address. Once again, I welcome all our shareholders to this 14th Annual General Meeting, irrespective of whether you're here in this amazing S3 Sydney auditorium or following the proceedings online. NEXTDC's data center footprint continues to grow and expand into new markets, allowing our customers to take advantage of the benefits of colocation as well as the direct connectivity to various cloud and connectivity services residing within NEXTDC's ecosystem. Our present demand is booming among big tech companies and startups seeking to establish new services built on AI and other accelerated computing applications.
With the company's expansion into Asia now underway and further expansions being undertaken in our major markets, we continue to deliver NEXTDC's vision, which is to help enterprises harness the digital age. We continue to strive to be the leading customer-centric data center services company for all our customers, be it enterprise, hyperscale, or government, as we deliver solutions that power, secure, and connect organizations to each other and to their most valuable resource, data. The developments in the current market lead us to tremendous opportunities and ongoing shareholder value. Our FY 2024 highlights slide displays a great set of numbers that I'm proud to share. Net revenue rose by 10% to $ 307.9 million, with record full-year pro forma sales of 5.5 MW.
Our focus on operational excellence drove record earnings, with underlying EBITDA increasing by 5% to $ 204.3 million, assisted by 12% growth in interconnection revenues to $ 28.3 million. Billing utilization rose 11% to 86 MW during the year, and the company finished the year with a record forward order book of 86.6 MW, underpinning our confidence about the company's forward outlook for further strong growth in revenue in the years to come. In capitalizing on the unprecedented demand in customer demand, we completed a fully underwritten $ 1.3 billion entitlement offer in April of this year, strengthening the company's liquidity, $ 2.7 billion at the end of FY 2024, comprising $ 1.2 billion of cash and $ 1.5 billion in underwritten debt facilities. Subsequent to year end, we've also undertaken a further capital raising of $ 678 million, comprising $ 550 million institutional placement and $ 128 million share purchase plan, as well as successfully signing an updated $ 2.9 billion senior debt facility on a new common terms platform to refinance NEXTDC's existing debt facilities.
Now, as a result of this activity, the company's pro forma 30th June 2024 liquidity position has improved to $ 3.4 billion, underpinned by approximately $ 5.9 billion in total assets, including $ 2.4 billion in property assets. FY 2024 also saw an acceleration of our investment program with approximately $ 1 billion in CapEx invested. As a result, we expanded our capacity by 32 MW in Australia, as well as progressing a further 72 MW in fit-out globally. This program is continuing into FY 2025, with the company on track to invest a further $ 1.3 billion-$ 1.5 billion in developing the more than 70 MW of capacity expansion now underway across Australia and international markets. We're actively seeking to take advantage of the unprecedented demand for data center capacity, both domestically and internationally.
Our efforts to build edge infrastructure in the Pilbara region through PH1 Port Hedland and NE1 Newman have helped us to diversify our value proposition to some critical national customers. These edge data centers located in the heart of Australia's largest resources export hub and one of the world's harshest environments demonstrate our willingness and capability to build infrastructure where our customers need it. With NE1 and PH1, we are enabling the mining sector to leverage digital megatrends for business improvement. It's an opportunity that will have long-term benefits for our customers and for our company. During the first quarter of FY 2025, we successfully completed the launch of A1 Adelaide Data Centre, as well as our new D1 Darwin Facility . We're also well advanced on the expansion of capacity at our S6 Sydney Facility , which we acquired in FY 2024.
Meanwhile, I'm also pleased to note our recent contracts for the acquisition of a new data center site in Sydney's Western Availability Zone, which will ultimately become S7. That's located in Eastern Creek, and it's just eight kilometers from our S4 site. S7 Sydney spans approximately 258,000 sq m of developable land and offers proximity to key infrastructure like major power substations, telecommunication networks, utilities, and associated public infrastructure. And once completed, S7 is expected to add up to 550 MW of capacity, in addition to housing our customers' mission-critical operations, administrative offices, and collaboration spaces. Our strategic growth is no longer limited to Australia. In FY 2024, we saw significant progress beyond our borders, beginning with KL1 Kuala Lumpur, which will serve as a hub for future ventures across the region.
We have begun to build a robust operational team in Kuala Lumpur, which will be pivotal in helping us to scale in alignment with our regional ambitions. We continue to engage with our global customers in Asia-Pacific, recognizing that demand for premium data center services continues to grow strongly in this region. In New Zealand, we continue to progress plans for our first data center, AK1 Auckland, and expect to be granted development approval and to commence construction during the course of FY 2025. It's clear that our customers are looking for us to bring them to help them bring their services closer to end users in these developing Asia-Pacific economies, and we're excited to have the opportunity to collaborate with them. As we advance our plans in these vibrant markets, we anticipate making further significant announcements that will highlight our commitment to meeting customer demand.
As our digital economy continues to expand, so does the demand for electricity to power it. Data centers efficiently consolidate this energy usage, aggregating power demand that would otherwise be distributed across businesses, homes, and consumers in a much less efficient way. Now, according to a recent report from Mandala, commissioned by prominent data center companies, including NEXTDC, Australian data centers currently consume around 3 TWh of electricity each year. It represents about 1% of the nation's total consumption. By centralizing power usage, data centers can manage energy demands more efficiently than dispersed on-premise servers, resulting in an annual saving of some 2 TWh of electricity, an amount equivalent to the needs of 280,000 households.
The data center sector is unique in its contribution for a stable and consistent power load, enabling efficient management of energy footprints, as well as investment in energy and other support infrastructure that provides benefits well beyond the sector. Data centers as aggregators of IT load also have the capability of leveraging new technologies to derive efficiencies in energy usage across their footprint. Anyone who has read our ESG and annual reports will note the advances NEXTDC has made in this respect as an industry innovator over many years, both in data center design and through significant investments in advanced cooling and power management. At an industry level, Mandala reported that over the past two decades, data centers have made considerable progress in energy efficiency, reducing their average power usage effectiveness, PUE, to 1.58 globally and even more so in Australia, where PUEs can be as low as 1.15.
These improvements have been driven by innovations such as hyperscale data centers, which are up to 27% more efficient than hosting services on-premise in Australia, as well as the implementation of advanced liquid cooling systems and AI-driven power management. Ultimately, modern digital services, including cloud computing, depend on large-scale energy-efficient processing capabilities of data centers to achieve their sustainability goals. As technology evolves, colocation and hyperscale data centers will continue to enhance efficiency, driving substantial energy savings while supporting the growing digital ecosystem. NEXTDC is at the forefront of energy innovation. We are committed to meeting sustainability imperatives and very aware of our social responsibilities in doing so. In FY 2024, NEXTDC made significant strides in our commitments to sustainability, social responsibility, and governance. Our environmental achievements in FY 2024 set a new benchmark for our company.
We shared our first climate and nature report in alignment with the Task Force on Climate-related Financial Disclosures. That's TCFD. This provides unprecedented transparency on how we incorporate climate and nature-related risks into our decision-making. We also undertook our first embodied carbon assessment of new builds, establishing a template for reporting Scope 3 emissions in all future projects. This critical early-stage evaluation process enables us to engage with delivery partners in order to accelerate our progress towards net zero across our value chain. Our social initiatives remain integral to our business, reflecting our deep commitment to the health, safety, and well-being of our team and communities. In FY 2024, we achieved a zero Lost Time Injury Frequency Rate. That's LTIFR across operations, with a significant reduction in injury frequency on construction sites.
The establishment of our Reconciliation Action Plan, working group, and the launch of a graduate program were also fostering inclusion and career development for emerging talent. Meanwhile, results from our inaugural People at Work survey placed us in the minimal concern category, reflecting a positive work culture with 84% participation and 75% positive engagement. These results are very pleasing and reflect our resolve to continue building a safe, diverse, and supportive workplace for all our team members. This year, we have made significant strides in embedding sustainability into every layer of our governance framework. Our alignment with globally sustainable standards, including TTNFD and the United Nations Sustainable Development Goals, underscores our commitment to an ethical and sustainable value chain. We've defined our ESG strategy, charting a course towards a net zero future with strategic oversight of a newly established ESG council led by our Chief Risk Officer.
Now, additionally, FY 2024 saw the appointment of our first Head of Sustainability and our first Head of Energy, both roles being pivotal in advancing our initiatives and ensuring that our planning translates in a meaningful real-world impact. Now, one matter of concern to the board is key staff retention and remuneration. This is a global industry, and it's now largely in the hands of private equity or large U.S. listed companies. Three significant new players have entered the Australian market, all of whom are seeking talent for their businesses. In addition, our staff are being approached and some recruited into Asia and elsewhere. Remuneration structures being offered are very different to those being accepted as normal within the Australian-listed environment. The board has tried to perform a balancing act between normal within the context of the ASX environment and the real market for talent in the sector.
You can expect us to come back to shareholders with a bolder plan in 2025. In closing, I extend my deepest gratitude to our dedicated team, management, and board for their unwavering commitment to NEXTDC's success. I would especially like to recognize Craig Scroggie for his remarkable long-term contributions. Now, in his 14th year within the company, his industry expertise and vision from the early days of cloud computing to today's AI-driven future have been instrumental in shaping NEXTDC's journey. My thanks to Craig for the passion, insight, and dedication you bring to our mission every day. To our shareholders, we hold a deep confidence that the best is indeed yet to come. Thank you for your trust and support. With that, I'm pleased to introduce Craig Scroggie, NEXTDC's Chief Executive Officer, who will provide further insights into the data center market.
Thank you, Doug, and my sincere thanks to our valued shareholders for joining us today. It is both an honor and a privilege to welcome you to our Annual General Meeting for the financial year ended 30 June 2024. This year has been a landmark for NEXTDC, defined by record-breaking growth and strategic expansion. In the past 12 months alone, we have contracted more new business than the entire previous decade, a true testament to the trust our clients place in us and the robust growth of our industry. This reflects our team's unwavering pursuit of excellence and commitment to putting our customers first. The company is on track to more than double both installed and billing capacity as we deliver contracted orders currently under construction. Even more exciting is we have the largest pipeline in history with a record number of megawatt-scale deals under active negotiation.
This momentum underscores our ability to scale alongside our clients, addressing the accelerated computing digital infrastructure needs of the fourth industrial revolution. Innovation is advancing at an unprecedented pace. What was unimaginable yesterday is reality today. Our confidence is grounded in powerful megatrends. According to McKinsey's 2024 technology trends outlook, generative AI has seen a nearly 700% increase in use, highlighting its transformative potential. Additionally, Gartner's Top 10 strategic technology trends emphasize the importance of AI and cloud computing in driving innovation and efficiency. These trends underscore the critical role of advanced technologies in shaping the future of industries and economies. With our expanding ecosystem of clouds, carriers, and AI service providers, NEXTDC is uniquely positioned to meet today's needs and build the foundations for tomorrow. Artificial Intelligence is driving an unprecedented investment surge.
In the last six months alone, the top four U.S. hyperscalers have invested over $100 billion in AI and data centers. It is a pivotal shift in industry dynamics. In 2024, AI has moved from a promise to a transformative agentic workforce, unlocking productivity, fueling innovation, and creating new business models. The surge has created extraordinary demand for resilient digital infrastructure to support its growth. In the fourth industrial revolution, AI is the new electricity. It's a powerful analogy that highlights AI's transformative potential. To realize the potential, robust, scalable infrastructure is essential. NEXTDC is committed to meeting this demand, providing the foundation for an AI-driven future. IDC recently predicted that AI will contribute $19.9 trillion to the global economy by 2030 and will drive 3.5% of global GDP.
NVIDIA CEO Jensen Huang recently projected that $1 trillion will be spent on building AI-ready data centers over the next four years, driven largely by hyperscale technology giants. Our customers face the challenge of meeting speed-to-market requirements, and they cannot tackle this challenge alone. In Australia and the broader Asia-Pacific region, we are ideally positioned to support rapid infrastructure scaling with strategically acquired land, power, and the ability to execute at speed. Hyperscale data centers and interconnection services are the digital infrastructure backbone of AI's transformative potential. To fully harness AI, applications require the capability to process vast volumes of data in real time, demanding substantial computing power, low latency, and secure connectivity. Purpose-built data centers are uniquely equipped to meet these rigorous requirements, offering high-density power, liquid cooling systems, and resilient infrastructure tailored for complex AI workloads.
The facilities are designed to deliver the operational certainty essential for AI-driven innovation, ensuring that businesses can scale and adapt seamlessly in this AI-powered world. Interconnection services are vital for the secure, seamless exchange of data across AI systems, clouds, and enterprise ecosystems. Retrieval Augmented Generation AI thrives on real-time data from diverse sources, using retrieval-based methods combined with GenAI to produce highly accurate, context-aware responses. This approach depends on constant access to fresh data, underscoring connectivity as the lifeblood of modern business. Our Axon Network as a service platform empowers customers to connect their Large Language Models, data with people, with locations, and to drive workloads, productivity, and agility. Whether it's hyperscale, metropolitan, regional, or edge, robust networks are essential as cloud and accelerated computing rapidly evolve. Axon meets this demand by interconnecting more data sources across more locations to an expanding user base.
In Australia, we are at the forefront of this shift. According to Statista, the local AI market is projected to grow around $ 4.8 billion this year and continuing to grow at a compound annual growth rate of nearly 29% through to 2030. Telsyte analysis anticipates that Infrastructure as a Service in Australia will reach $ 8 billion by 2027, with Asia-Pacific data center capacity on trajectory to surpass 10 GW, with 13 GW in development and planning. We are a leading industry player in an industry that is gearing up to meet exponential demand. We're advancing Australia's role in the global AI revolution through strategic alliances. And this year, NEXTDC achieved a milestone by becoming the first Australian data center operator certified under NVIDIA's DGX AI Factory standard. The AI Factory is a GPU supercomputer housed within a colocation facility.
It is purpose-built to meet the intense power and liquid cooling demands of next-generation AI. Certified by NVIDIA, these facilities support advanced reference architectures that positions NEXTDC at the forefront of infrastructure innovation. Across hyperscale, metropolitan, regional, and edge data centers, we expect diverse AI factories to emerge. AI training involves teaching models to recognize patterns by processing vast data sets requiring high-performance GPUs and specialized hardware like NVIDIA's DGX systems. The process is resource-intensive, demanding significant power and cooling to handle large-scale computation. AI inference, by contrast, is the application phase where trained models make real-time predictions or decisions. Inference workloads are lighter, processing single inputs quickly, but they still require optimized infrastructure to ensure low latency and reliability, especially for real-time applications like image recognition and natural language processing.
In essence, training builds the model's capabilities, while inference leverages this knowledge for interaction and decision-making on demand within data centers. We are a leader in energy-efficient cooling technology, and for over a decade, our engineering team has been pioneering innovations in customized liquid cooling solutions, empowering customers to meet their energy and performance objectives. As the first Australian data center certified under NVIDIA's DGX standard for liquid cooling, we're proud to deliver direct-to-chip liquid cooling capabilities. This approach maximizes heat dissipation directly at the source, significantly enhancing efficiency and enabling next-generation AI workloads to operate at peak performance with minimal energy overhead. AI is set to drive one of the most profound transformations in the history of technology. It will usher in the fourth industrial revolution, and for NEXTDC, this moment is a defining opportunity.
We are not only positioned to meet the rising demand for AI, but to set the benchmark for innovation, resilience, and sustainable data center infrastructure. As we expand our AI-ready capabilities and reinforce our robust infrastructure, I'm proud to announce that NEXTDC has once again been honored with the prestigious Frost & Sullivan Best Practice Award for the Australian Data Center Services Company of the Year, the fourth consecutive win. The award recognizes our leadership in delivering resilient AI-ready infrastructure that drives innovation and supports the ambitions of hyperscale, enterprise, and government customers alike. Data centers are the backbone of the digital economy. McKinsey forecasts the global data center market will reach $1 trillion by 2030, highlighting the extraordinary demand for digital infrastructure. Together, we are empowering enterprises to harness the full potential of the digital age, and for NEXTDC, that journey is just beginning.
As we enter a new era defined by AI, our achievements over the past decade are merely the foundation. The momentum surrounding AI signals a transformational chapter for the digital infrastructure industry, one that promises unprecedented growth in the decade ahead. As we enter the fourth industrial revolution, NEXTDC is strategically positioned to lead the transformation, expanding our platform to deliver and capture a significant share of this dynamic market. As Bill Gates famously said, "Most people overestimate what they can achieve in a year and underestimate what they can achieve in 10 years." Together, we're not just building the foundation for today. We're laying the foundation for an extraordinary future that will redefine what's possible in the digital age. Thank you.
Thanks, Craig. Now, before proceeding with the business of the meeting, a quick reminder of today's procedures. Link [Group] have been appointed returning officer of this meeting, and I am satisfied as to their independence. We will be conducting all voting by poll. On a poll, every member present in person or by a representative, attorney, or proxy is entitled to one vote for each share held. If attending online, you can cast your vote using the electronic voting card received after you register to get a voting card. You will then be asked to enter your shareholder number, which is your SRN or HIN, plus postcode if in Australia or a country if you're outside Australia.
The proxy votes already received for each resolution will be viewable on the platform as we move through the resolutions. These will be current as at the proxy voting deadline, which was 11:00 A.M. on Wednesday, 20th of November, 2024. Any undirected proxies in my favor as Chairman will be voted in favor of the relevant resolution. Following discussions on all items of business, I will close the poll five minutes after the meeting ends. As a result, the results of the poll will take a little time. They will be announced to the ASX this afternoon. Shareholders can submit questions during the meeting, and if you're attending online, you can also do so by clicking on the Ask a Question button. To ensure questions reach us in time, I ask that you submit them now if you've not already done so.
If we're not able to get through all the questions today, if there are specific questions that would be better addressed on an individual basis, we'll respond to them after the meeting. If we receive multiple questions that are the same or similar, we'll try to amalgamate them into one or choose to answer the broadest question, which covers off the others. To ensure all shareholders have an opportunity to ask a question today, we'll accept up to two questions from each shareholder for each item of business. I'll now move to the formal resolutions.
The first item on the agenda deals with the receipt and consideration of the financial reports and the reports of the directors and auditor for the financial year ended 30th of June 2024. No shareholder vote is required in relation to this item of business. However, shareholders can now ask questions or have discussion on these matters. And now is a good time to ask questions of a general nature about the company as opposed to questions that are specific to today's resolutions.
NEXTDC's Financial report, Directors' report, and Auditor's report for the year to 30th of June 2024 is incorporated in the 2024 annual report, which has been sent to all shareholders who have requested the report and which is available on the company's website. At this time, I would encourage any shareholder to raise any question they may have of the auditor, which are relevant to the conduct of the audit and the preparation and content of the audit report. Are there any shareholders in the audience who wish to ask a question? Mike.
Thanks very much. My name's Mike Sackett. I represent Australian Shareholders' Association. First of all, thank you for holding this as a hybrid meeting. It's really the way to go, and it's appreciated. Secondly, I think it's important to note not only the extraordinary potential future that you have, but the total shareholder returns that you've generated. As I looked a couple of days ago, you've managed a 30% return over the last year, over the last five years, 20% per annum, and over the last 10 years, 25% per annum. So as a shareholder, I'm pretty happy with that, and I suspect most of the ASA members are. I've got a couple of questions. It's very striking how you're expanding overseas. I think the first announcement was May last year.
I'd like to ask Craig how is the company structuring itself to reflect the fact that you're going from an Australian company to one with considerable international interests, and I do note that a number of Australian companies have tried to expand overseas with not always positive results. The second question I have is regarding your power utilization efficiency, the PUE. In previous annual reports, you've given a lot of focus to getting it down 142 towards 140, et cetera, and then you had a bit of a backward blip in FY 2024 that I didn't see any good explanation of in the annual report. So I wonder if you can help us there, please.
So both good questions. Craig.
Thanks, Mike. Appreciate you attending in person, and thank you for the questions. The first question in relation to Asia. I'll start with the key drivers from a digital infrastructure growth perspective. What is unique about building digital infrastructure is that it's very reliant on the political environment, the legislative landscape, the information protections of the country in which infrastructure lives. And in many cases, organizations need infrastructure in every country in which they operate. So that means that you can't have a single data center in one location that is very large and very cheap that would serve all of the world's requirements because data is unique to the geography that it's deployed in.
If you think about applications like healthcare for remote health services, if you've seen a Da Vinci robot operate in a surgery environment for theater, low-latency connectivity and access to the data center relative to where the surgeries are being undertaken, the location is very important because the amount of time it takes to send the instructions and take action is an important factor. There are many, many reasons why each geography is unique. The requirements to build resilient infrastructure that serves government and enterprises, and for us, our global clients in each of these countries, is an extraordinary opportunity. We spent a decade building an amazing business in Australia, and we now operate in every major city in the country.
We build hyperscale data centers, beautiful metropolitan ones like this one that house cloud computing and many of the essential services that we rely on in our lives day in and day out every day, and even as simple as something like watching a movie on Netflix or listening to music in Spotify. But those essential services also go out to the regions in Brisbane and Perth and right to the edge. So one-third of Australia's internet traffic flows through the Sunshine Coast data center. In Darwin, most recently, being able to support Vocus's Project Horizon for submarine cable, that cable goes around the North West Shelf of Australia and lands in Darwin, but that then connects Australia to Southeast Asia. There will be more cable announcements in Darwin very soon with our global customers.
They may seem like interesting places to build digital infrastructure, but we have low or no competition in these regions. We have great support and partnership with the governments. We also opened in Adelaide as an example as well just recently, and whether it's hyperscale, metro, region, or edge, I think we're incredibly well positioned to support the requirements of our customers. The last comment I'd make, Mike, I think specifically, what are we doing in terms of being able to prepare ourselves to be ready to manage an Asian business, and I think you made the point that some companies have tried and not been successful growing outside of Australia. We have an incredibly experienced leadership group in the company.
Before having been here for over a decade, worked across the Asia region, and all of our executive leaders have lived and worked in many of these countries, Singapore, Hong Kong, and other locations. Every market is unique, and they're all different, and they're all difficult. But it is an amazing opportunity because for Western organizations, they want to place their trust in companies that they're already doing business with. And for us to be able to have spent a decade building our capability, building that muscle memory to have the systems and processes in place to have an extraordinary company with great process and procedure, we can now start to sequentially build out over time into these other great growing markets. So the region for us is an extraordinary opportunity. Asia continues to be the fastest growing market in the world.
We will see something in the order of a three to five times increase in the size of the artificial intelligence market and cloud computing over the course of the next decade, and I hope that we can capture our unfair share of that.
PUE.
PUE. So, Power Utilization Efficiency. The measure that we use essentially is how much additional power it takes in the facility to provide all the other ancillary cooling services and things to the compute infrastructure. Very simply, it's just math. It depends on the total load drawn in the facility. When we design a facility and we open it on day one and it's 10% full, the PUE will be quite high because you're running all of the plant and infrastructure, but you only have a small amount of customer load. Over time, as the facilities get more and more dense and we put in more infrastructure, the PUE comes down. We have something that no one else has invested in here. We're the only one with NABERS, the National Australian Built Energy Efficiency System, the Australian Government Certification for energy efficiency.
We've certified to that standard for a decade now and continue to be the leading operator and only operator that has the five-star energy efficiency benchmark in our business. S o the PUE metric is essentially simply math. It's completely transparent. We're the only operator that is independently audited and shares that information, and it simply goes up and down. When we open a brand new facility, it will go up because we've only got a small amount of utilization, and over time, as utilization grows, the PUE will go down and deliver our customers a far more sustainable and lower-cost operating environment they could ever achieve on their own.
Will it still be part of the STIs for key executives in future?
That's a matter for the Board. But I would anticipate that given the critical importance of sustainability and energy efficiency, that it is a matter that is critically important to our customers' success. And therefore, I would expect that the Board would consider that energy efficiency and sustainability are critically important measures to hold the management team accountable for.
Thank you.
My name is Wayne Arthur from Mine Superannuation . I wanted to ask a question of the Chief Executive Officer. I imagine you talk to lots of people in the industry and have a pretty good handle on what your competitors in the industry are doing. Now, the biggest thing that happened this year was the sale of AirTrunk, and reportedly for $ 24 billion. My understanding is that they operate 11 data centers in Australia. Now, I wouldn't have paid $ 24 billion for a company that wasn't making any money. So what's your best estimate of how much profit AirTrunk has been making in Australia in the last year or so?
It's not something that I could guess and answer for you. I don't have any more information than what you have publicly because they're a private company. It's a great result, sale, outcome, valuation. The investments from their acquirer, which was Blackstone, are investing over $100 billion in data centers. They feel that this is really just the beginning of the market, and it's exactly the same sentiment that we have, that the opportunity is really just beginning. So I think it's an amazing outcome. It's a great result for them. But for the buyer, rather than the seller, the buyer is investing $100 billion in data centers now because they believe that the opportunity is just beginning. So I couldn't comment on profitability or any other metrics because they're not made public.
But I would simply say if you're the largest, most sophisticated real estate investor in the world and you're invested $100 billion in this segment, in this opportunity, that's probably good information and good support for what the future looks like for us as shareholders.
Okay.
I'm a local private investor. Congratulations on another good year. I've got a few questions, but I'll do one at a time. Craig's been such an important part of the growth of NEXTDC. I'm wondering what work the board does on succession planning for Craig. Not that he's necessarily leaving, but there's all sorts of things happen in a company, good and bad, and as a shareholder, I'd like to know that there is some plan.
So to begin with, it's very hard to fit more than one Craig Scroggie in a company. Secondly, we have a very strong senior management team. And thirdly, we do put quite a bit of thought into the issue of him possibly falling off his bike. We have encouraged him not to ride his bike. But it's a very good question, and it's a subject we're acutely aware of. I'm not sure I can go much further than to say the board does think about that and puts a reasonable amount of time and effort into that thought process.
Thank you. It's Mary Curran speaking. I'm a personal shareholder and also a shareholder in my self-managed fund, and yes, I actually came off my bike last week. So I really encourage you to wear good gloves and equipment. Otherwise, you'll get a few scars like I have. My question, two sort of two-part question. The first question is about the physical location of the data centers. Now, you mentioned about Darwin, right, being possibly a growth center, and my question is sort of here in Sydney, our real estate costs are pretty much exorbitant, right, per square meter. We're talking big bucks. So do you see then a center like Darwin where you can obviously acquire real estate at a much cheaper cost, being where you may indeed site some larger data centers?
The second question is sort of a flow-on from that to some degree insofar as obviously these data centers are big users of power, right? And what I'm concerned about is when the lights go out. Now, I don't know what provision you have made or are planning, but I do know you did make a comment about nuclear in some article I read. And I'd like to know, have you any provision for having a powering of the data centers yourself? For example, in places like I think you've got Port Hedland and a few other sites like that, are you making use of any of your own solar or wind farms, or are you have any plans to do that?
Good question. Craig?
Yeah. That's a great question. Thank you. The location of a data center is very dependent on population. So if you think about any infrastructure service, roads, rail, port, they are coalesced around cities. And we have four pillars of the data center industry. Essentially, hyperscale data centers can be very, very large, low-cost, built in remote locations. And it would be great in those remote locations if you can get megawatt-scale solar and wind behind the meter in order to get a greater sustainability outcome. One of the challenges that we have in being able to support that is that data centers operate 24/7. When all of you go home and switch on your LCD TV and watch Netflix and start using all of that digital infrastructure, our demands don't change. The data center is always on.
So we need as much power at night as you ordinarily would need during the day. So when the sun's not shining and the wind's not blowing, we need firmed base load power to be able to continue to scale. The energy transition challenge in Australia is an interesting one. And if we had an hour, I'd be happy to give you a great discourse on my views on the energy transition, how lucky or fortunate we are to have solar and wind, but other technologies and capabilities that need to be invested behind the meter in Australia. But the point is that hyperscale data centers can be in remote locations, and we can power them with renewables like we do today. We do put solar on the rooftop of all of our buildings. We do wind PPAs. We're doing everything that we can to continue to grow that footprint.
Over time, metropolitan data centers, just like this one that we're sitting in here today, they play a critically important role for low-latency infrastructure and information to be close to the users. Right out to the edge where the submarine cables land, so for us in Darwin and in the Sunshine Coast, for Port Hedland and for Newman’s submarine cables land and then connect those terrestrial cable systems so that we have information. So those four pillars of the industry essentially will all need different energy solutions. We do need 24/7 base load power. As we retire coal over time, we're going to need firmed net-zero solutions to replace those.
I don't think the energy transition is a simple one, but we will need to continue to do what I like to call the 1%, as we need to do a little bit of everything all the time that we can to build our own energy capability and then work closely, which we are with the government, to support new energy strategies that will power the future of our economies and our digital economy.
What about the nuclear, the small nuclear?
So I'll try and do this in like two minutes. Australia is the only country in the G20 with a ban on nuclear energy. So any discussion or debate about the potential of small modular reactors is somewhat pointless. I do talk about this topic when I'm asked to comment on energy policy because I do believe that all technology options should be on the table. There is no energy solution, geothermal, hydro, nuclear, advanced nuclear. We should consider all of them. Many of the arguments around nuclear energy safety or security and other matters have been debunked. If you want to watch a great docuseries, Erik with a K, Erik Townsend, on YouTube, not Netflix, created a seven-part docuseries on nuclear energy and the opportunity. Australia has 28% of the world's uranium.
We could build a fully integrated industry around it, but there's no point talking about the potential until the government gets support to repeal the legislation. So that'll obviously be a matter that's litigated through the polls when the election comes around. I'm certainly an advocate for considering every option to get us net-zero base load power because the defining factor for the advancement of every economy is low-cost energy. Australia should have the lowest energy prices in the world. We should, but we don't today, and it is a critically important issue for the future of our industry and for the competitiveness of our economy, so it's a topic I'm extremely passionate about, not just because of the role that data centers play in consuming energy. Power is not an issue for us today because all data centers in Australia only consume 1% of the national electricity market.
But that will grow over time. And it could get to a number as large as the U.S. market, which forecasts that they may be 8% or 9% of the total electricity grid. But wonderful question. Thank you.
Just take a cold shower now and again.
I wanted to ask a question about pricing and profitability, and I wonder whether the best person to ask this question would be to the Chief Customer and Commercial Officer, David Dzienciol.
Sure. Go ahead. Ask your question.
Thanks. In the inside cover of the report, we see all these awards that the company has done. In the presentation today, we see the most recent RAP that the company got. Now, that would suggest that the company is supplying a premium product. So is it charging premium pricing, or is it charging the same sort of level of pricing that your competitors are charging?
Not yet.
Thanks for the question. It really depends on the segment that we're servicing. So if you think about the business today, we service multiple segments, and it's not a one price fits all. Yes, it's competitive in the market. And as we formulate the different segments that we service, we have ways to service each of those segments. So today, in our hyperscale business, it's a very different style of commercial relationship with our key customers to our co-location business. So some of our product is at the premium end, and some of it is more as we would consider larger volume over a larger period of time. Did you want to add anything to that, Craig?
Look, I think you answered it. We sell many different products and have different price regimes. We do the best we can to ensure that we maximize shareholder returns. We get the best pricing that we can. The greatest value for us over time is being able to get a great result for our customer and a great result for our shareholders. And that means that we are disciplined on the way we invest capital, the way we form capital in terms of driving down our weighted average cost of capital over time so that we can maximize returns, that we can ensure the longer tenor of contracts with customers. So in some parts of the business, a contract could be three to five years, and in other parts, it could be 15 or 20 years.
Our ability to be able to guarantee the return profile with CPI escalators over time. They all drive profitability as an outcome. I think David answered the question well. We have a mix of pricing strategies. We are not a one-size-fits-all company. Our most important priority is to always ensure we return and we drive better than our cost of capital outcomes. That's a wide and diverse range. Thank you.
Any further questions?
I just wanted to ask about why you would choose Auckland. Are there other data centers there, and what does it do in terms of your total strategy? And the same for Tokyo, because I would imagine there'd be a lot of others there.
Sure. Every market, I think I covered some of this question earlier with Mike's question. Each market has unique privacy and regulatory requirements where the information must be stored in the country. Every country is an opportunity. I've spent a lot of time with the Prime Minister in New Zealand. They are extremely supportive. He's driving an agenda to transform New Zealand's economy. There is an opportunity to build. Australia is certainly more advanced in the deployment of digital infrastructure than what the New Zealand market is. From a percentage of GDP point of view, yes, it may be state-sized opportunity similar to a state in Australia. But we believe that given our product is unique, we're focused on enterprise. Our global customers have asked us to go to New Zealand to support their expansion requirements. We see those as very logical reasons to continue to grow our platform.
Japan is also an incredible market. It's highly mature. There is more demand for data centers in Tokyo today than there are data centers. And we're incredibly excited to be able to enter the Japan market. It will take considerable time because when you're building in downtown Tokyo and building large-scale digital infrastructure, it will take time. But the market demand there is extraordinary. The pricing is great. And I think we can be successful. We have to sort of choose a small handful of these markets to expand in at any given time because we don't have infinite resources. And we have to focus our direction on markets where our customers are encouraging us to go. And that helps us choose the location and the country in which we invest in next.
Okay. Should we go to any questions online? Are there any shareholders' questions online, Oskar?
There are several questions online, Chairman. The first comes from Gabriel Hurns, who would like to know whether there are any plans to expand into the peninsula in South Australia, specifically in the area of the town of Cleve and its surrounds.
I have to ask our Chief Executive for the answer.
Sounds like a beautiful place. Thank you for the question. As far as our regional expansions are concerned, at this point in time in South Australia, we just opened A1, the Adelaide data center. It's the first Tier IV certified world-class piece of infrastructure in South Australia. I'm incredibly grateful to the former premier, the 46th premier of South Australia, the Honorable Stephen Marshall, for his support in encouraging us to help the South Australian government with their requirements as well. So as it stands today, the current investment that we have just opened in Adelaide is our focus and priority to support the South Australian government and enterprises in that market. So thank you.
Oskar, any further questions?
The next question comes from Ormond John Walters, who is interested to know when will dividends be paid.
Okay. Thanks. I just happen to have a clue that this question was coming up. So I've turned to the relevant page in the annual report. And this encapsulates the totality of it. In considering dividend policy, the board considers the demand for capital to invest in growth, its level of retained earnings, and the availability of franked earnings. Although the company is expanding operating cash flow, NEXTDC is some way from paying tax and consequently from generating franking credits. The company continues to experience strong demand for its services and consequently is continuing to make substantial capital investment into the business. It is unlikely that NEXTDC will pay any dividend in the next two years. Dividends were neither paid nor declared during the year. It's very, very simple.
We have to be in a position where we're making bottom-line earnings and paying tax and paying off past losses before we generate franking credits, and that will then be before we can start paying dividends. So that's probably, if we can see as far as two years ahead, it's unlikely we'll be paying dividends within that next two years. Are there any further questions, Oskar?
Mr. Chairman, the next question comes from Stephen Mayne, who notes that Australia is in the midst of an unprecedented deluge of takeovers that have contributed to listed entities in the ASX falling by 176 to 2,118 since June 2022, including 21 straight months of declines. There have already been 27 takeovers above $ 200 million completed so far this calendar year. There is a clear mispricing between public markets and private markets. Why are public markets not valuing ASX-listed companies like ours more highly? And what are we doing to avoid being gobbled up like so many other companies?
I think that's a very good question. We are seeing within this sector a huge amount of the investment is in the private space, so the formation of capital, there are some acquisitions in the public market that are going into private markets in this sector. But more particularly, the formation of capital is going directly into this sector, and I don't know what the proportions would be, but the share of private to public assets in this space. Steve said, I'm going to guess it's probably only 30% now in public hands in this sector. I'm guessing, but I'm sure it's less.
So 30% in the private hands, you mean?
No, 30% in public.
Public and then the rest in private, yeah. Well, there's only two in the U.S., there's only two public data center companies left. The company I used to run, Equinix and Digital Realty. NEXTDC stands alone here. And there's less than a handful, I think, Craig, around.
GDS and China.
And GDS and China. So the private capital is being raised by the superannuation funds, by the sovereign wealth funds, by the big pension funds around the world is just massive. And they all know, just like Blackstone, who did the AirTrunk deal, they're investing heavily in digital infrastructure globally because they see these trends that Craig went through today. And so the tower companies, data center companies, fiber businesses are highly invested in now because they know it's going to underpin the digital economy for the next couple of decades.
So that's the broad circumstance of the market that we're in. That creates a number of other issues within the sector that we have to think about. But in terms of what are we doing to make sure that we just don't suddenly disappear off the ASX, first of all, we've got to communicate well with our shareholders and make sure we make no mistakes, that we continue to drive the business forward, we continue to invest and drive the revenue and drive the earnings of the business. Because if we misstep, then you'll probably get one big payday, but that'll be it. And it is an important subject that quite a few of our major shareholders raise, and that is they'd like us to continue staying in the public market and driving the business forward. Any further questions?
Mr. Chairman, the next question also comes from Stephen Mayne, who would like to know, did any of the five main proxy advisors, ACSI, Ownership Matters, Glass Lewis, ISS, and ASA recommend a vote against any of today's resolutions? If so, what reasons did they give?
So the data, the advice between proxy advisors and their subscribers is confidential to them. We do engage extensively with the proxy advisors, and we get a very good hearing. We engage much more closely, of course, with our shareholders. And I don't know how relevant it is. Shareholders either take the advice or they don't. And they choose to mostly support our company directly. So we really can't comment on confidential advice between proxy advisors and shareholders. Any further questions?
There are no further questions online at this time, Chairman.
Thank you. So if there are no further questions, I'd now like to move to the formal motions of the meeting. I refer you to Resolution 1 of the Notice of Meeting in respect of the adoption of the remuneration report. This is a non-binding resolution. No votes may be cast on this resolution by or on behalf of a member of the company's key management personnel, including the Chairman and other Directors or closely related parties. If you do not provide proxy voting directions to me as Chairman and you are not a prohibited voter, you will be taken to have authorized me to vote all available proxies in favor of this resolution, even though this resolution is connected directly or indirectly with the remuneration of key management personnel. You can now see the details of the valid proxies lodged on the screen.
I would add that the NEXTDC board unanimously recommends that you vote in favor of this resolution. Are there any shareholders in the audience who wish to ask a question?
I wanted to ask the Chairman of the Remuneration Committee about both the short-term incentive scheme and the long-term incentive scheme. First of all, the short-term incentive scheme. As I read the annual report, there are four criteria for payment under that scheme. One is underlying earnings before interest, taxation, and depreciation and amortization. One is total revenue. One is project delivery. And one is Environmental, Social, and Governance. Now, the first two relate to EBITDA and sales revenue. And they come to about 75% of the way the short-term incentive payment is awarded. So it seems to me that that really encourages the senior management to focus on growth and probably profitless growth because under EBITDA, you're in effect forgetting about depreciation, amortization, and interest. So it's not, to my way of thinking, a good way of incentivizing the senior management.
Wouldn't it be better under the short-term incentive scheme to have some sort of reliance on profit, increases in profit? Okay, that's question one. Question two about the long-term incentive scheme. The criteria for that is total shareholder return. Now, total shareholder return is made up of two components. One is changes in the share price and dividends paid. Well, we can forget about dividends paid. So it's basically reliant on changes in the share price. And share prices fluctuate. They go up and down. And any changes in the share price may or may not have anything to do with the skill and management ability of the chief executive officer. Wouldn't it be better for the long-term incentive scheme to have a metric that reflects management skill on the part of the Chief Executive Officer rather than just relying on changes in the share price?
Good. Thank you for the question. If we look at the STI to start with, the reason we focus on EBITDA and revenue is that's what drives the value of the company, so when we look at the way that our institutional shareholders value the company, the key criteria comes back to a multiple of EBITDA, which is the reason why that's so important. In terms of revenue, revenue is important because that's an indication of the growth going forward. We've mentioned in the report here that for the years going forward, rather than using revenue, we'll use net revenue so we can take out the pass-through, which has the pass-through electricity charges, which has no impact upon earnings, so they're the key things that we focus on, and that's what's going to drive shareholder value.
The other things that drive shareholder value are what the company is building for the future. And that is why we have a portion that deals with the major projects delivery because that will underpin the continuing growth in earnings going forward. In terms of the LTI, what you're suggesting there would be a very subjective review by the Board of the performance of not just the CEO, but the senior management team. Certainly, feedback that we have from shareholders is that they want some metric to measure against. And the best metric that we have at the present time is the TSR. Is the TSR a perfect way? Well, we had an indication of that last year when, despite the strong performance over three years of the company, the LTI didn't trigger. And that's been very disheartening for both the CEO as well as for the senior management.
So our LTI is far from perfect, but we do need some metrics in there to provide some objectivity in terms of measuring performance. Okay, thank you.
Just a request, please. Be really helpful when you put up the figures there just to have the percentages so we can see the 4% against an open. I think it's about 4% or 5% against the Rem. Is that right?
I don't know.
That's why I'm saying save us all, get a calculator out. Just put the numbers up. They would be really useful. Thank you.
Right. Thank you. Are there any other questions? Are there any shareholders online who wish to ask a question?
There are no questions online at this time, Mr. Chairman.
If there's no further discussion, I now put the motion to the meeting to adopt the remuneration report for the financial year ended 30th of June 2024. Please cast your vote. I now pass the conduct of the meeting over to my fellow director, Mr. Stuart Davis.
Thank you, Doug. This item of business relates to the reelection of Mr. Douglas Flynn as a Non-Executive Director. I refer you to Resolution 2 of the Notice of Meeting in respect of his reelection. Mr. Flynn has been an independent Non-Executive Director since September 2013 and has served as Chairman since April 2014. In accordance with Article 58 of the company's constitution, he is retired by rotation and offers himself for reelection. The explanatory memorandum accompanying the Notice of Meeting sets out a brief description of his experience and qualifications. You can now see the details of the valid proxies lodged on the screen. The NEXTDC board, other than Mr. Flynn, unanimously recommend that you vote in favor of this resolution. Are there any shareholders in the audience who wish to ask a question?
Thank you. Mike Sackett at Australian Shareholders. Doug, it won't surprise you probably to hear me ask, could you just say a few words about the particular attributes that you bring to the Board of NEXTDC?
Mike, you did warn me. My background is easy to look at in all sorts of ways. I ran a couple of global businesses. I have had, fortunately, in the case of this company, extensive experience in building networks in Southeast Asia, albeit they were relatively low CapEx, tech-enabled service businesses. But nevertheless, I've spent a lot of time in East Asia building networks. And in fact, I've still got businesses in East Asia. And I think I bring some useful experience in that regard. But more importantly, I guess I spent a long time working with teams and trying to drive businesses. This business has been a very, very dynamic business. I think we've got a fantastic team. I think the company has created terrific optionality around its strategic capability.
If we think about the changes that are going on in the industry that Craig talked about in terms of where AI is going, we're right at the beginning of that journey. And some of our capabilities that we have in our company are going to position us very well and differently to many of our competitors. I think I bring something in terms of strategic thinking to the business and certainly fairly wide experience both in Australia and internationally.
Are there any shareholders online who wish to ask questions?
There are no questions online in relation to this resolution.
Good. Thank you. If there's no further discussion, I'll now put the motion to approve the reelection of Mr. Flynn as a Director of the company. Please cast your vote. I now pass the conduct of the meeting back to the Chairman.
Thanks, Stuart. I now refer you to Resolution 3 of the Notice of Meeting in respect of the increase in the maximum aggregate annual remuneration of Non-Executive Directors. Listing rules in the company's constitution require the maximum aggregate amount of Non-Executive Directors' fees for services as Directors in any year be determined by shareholders. The Board has reviewed the current aggregate fee limit and believes an increase is appropriate. The Board's reasoning in this regard has been detailed in the memorandum accompanying the Notice of Meeting. Accordingly, the board believes it is appropriate that the current limit be increased by $ 200,000 from $ 2 million to $ 2.2 million per annum. The board believes it's inappropriate for it or key management personnel to vote on this resolution. Accordingly, the company will disregard any votes cast on Resolution 3 by those parties.
You can now see the details of the valid proxies lodged on the screen. And also, given the interest of the Non-Executive Directors in this item, the Board makes no recommendation in relation to Resolution 3. Are there any shareholders in the audience who wish to ask a question? Are there any shareholders online who wish to ask a question?
There are no questions online in relation to this resolution, Chairman.
Thanks, Oskar. If there's no discussion, I now put the motion to approve the increase of the maximum aggregate annual remuneration of Non-Executive Directors. Please cast your vote. I now refer you to Resolution 4 of the Notice of Meeting. In September 2024, the company completed an institutional placement of shares at $ 17.15 per share to enable the company to acquire sites in Asia as well as general corporate purposes. The explanatory memorandum accompanying the Notice of Meeting sets out details relating to the institutional placement, its purpose, and details on the securities issued. You can now see the details of the valid proxies lodged on the screen. NEXTDC Board unanimously recommend that you vote in favor of this resolution. Are there any shareholders in the audience who wish to ask a question? Are there any shareholders online who wish to ask questions?
There are no questions in relation to this resolution, Chairman.
If there's no further discussion, I now put the motion to approve the ratification of the issue of shares under this institutional placement. Please cast your vote. I now refer you to Resolution 5 in respect of the approval of the grant of performance rights to Mr. Craig Scroggie. ASX listing rule 10.14 requires the approval of shareholders to be sought where the company intends to issue securities under an employee incentive scheme to a related party. Mr. Scroggie is considered such a related party. The proposed issue of performance rights constitutes the giving of a financial benefit, so we also seek shareholder approval. His role as CEO Craig is a key executive and plays an important role in the growth of the company's business and strategic objectives.
A summary of the main terms of the proposed grant, investing conditions, and evaluation of the rights is included in the memorandum which accompanies the Notice of Meeting. You can now see the details of the valid proxies lodged on the screen. The NEXTDC Board, other than Mr. Scroggie, unanimously recommends that you vote in favor of this Resolution 5. Given his interest, Mr. Scroggie makes no recommendation with respect to this resolution and is precluded from casting his vote. Are there any shareholders in the audience who wish to ask a question? Are there any shareholders online who wish to ask questions?
There are no questions online in relation to this resolution, Chairman.
If there's no discussion, I now put the motion to approve the grant of performance rights to Mr. Scroggie. Please cast your vote. Resolution 5 was the final resolution, and so that concludes the formal business of the meeting. We'd now like to take the time to address any final general questions that have been asked by shareholders. Are there any shareholders in the audience who wish to ask any final questions? Mr. Arthur?
The loss this last financial year was double the loss of the previous financial year. What's the board doing to stem the losses and get the company into profitability?
I think the issue we're faced with is that we have an expanding pool of projects, and on average, not every project is bigger than every single one before, but on average, the projects we're doing this year are bigger than the ones we were doing last year. As those come online and the depreciation and the operating costs hit the accounts, then for the time being, at least until those DCs fill up and until such time as all that revenue is flowing into the company's coffers, then that circumstance continues for a period of time. You've only got to look at the valuations, and I probably shouldn't rely on this. It's very bad for Directors and Chairmen to talk about valuation, but we have 15 analysts looking at the company.
They do have the opportunity to take a deeper dive than we as retail shareholders do into the prospects of the company. They all place a valuation on the company, and in every case, those valuations are higher than our current share price and in some cases, considerably higher. So their ability to look at that and determine what the cash flows look like out into the future. So right now, the Board and the management most particularly is very focused on not spilling cash and being frugal in the way our investment is carried out.
But this continues to be about growth and building out a capability that's going to have a much stronger cash flow off into the future, and the internal rate of return against that is going to be greater than our cost of capital, and it is going to drive greater shareholder returns as we go forward. And that's why we're all invested in this company. It isn't just about today. Are there any further questions? Are there any shareholders online who wish to ask a question?
Mr. Chairman, this question comes from Andrew Clatworthy, who notes, "I'm a substantial personal shareholder having owned shares since the time of the IPO. I've taken up all rights issues and share purchase plans to the maximum. Why does NEXTDC continue to dilute existing shareholders by not making share issues on a pro-rata basis, instead limiting people to $ 30,000 when it makes share purchase plan offers rather than rights issues? To be fair to all shareholders who do not have the funds available to take up their full entitlement, rights should be capable of being sold.
Okay. That's a very reasonable, good question, and a very reasonable and good answer. So the share purchase plan process, in the event that we do make a placement, is all that we're able to undertake. The company in the main wishes to do things by way of pro-rata rights. However, there is an issue if we make those rights tradable, renounceable, and that is that we end up with a significantly bigger spread on the discount for the offer. And our view is that continuing to work to reduce our cost of capital is the right thing ultimately for the company and shareholders. Oskar, would you like to add anything to that?
I think that succinctly addresses the question, Chairman.
Thank you. Are there any further questions online?
The next question comes from Stephen Mayne, Chairman, who notes that the five most valuable U.S. big tech stocks, those being Microsoft, Apple, Amazon, Alphabet, and NVIDIA, are together worth more than $20 trillion. Could the CEO comment on how reliant we are on big technology and what we would do if any of them suddenly put up their prices by 30%?
I can't comment on customers' pricing strategies. I mean, they're matters that are of their own responsibility. How reliant are we on big technology? I mean, essentially, all of the extraordinary capability that we have in our day-to-day lives today, whether it is the ability to work remote, do a hybrid Annual General Meeting, these are all underpinned by digital infrastructure. I think that digital infrastructure plays as a critical and important role as what our traditional infrastructure assets, roads, rail, port, hospitals, education, they're all incredibly important parts of an interwoven ecosystem. So from my perspective, yeah, there are many, and certainly those extraordinary companies, we are very privileged to be working and supporting their growth in the region. They are very large, and I hope that they continue to succeed.
At the same time, while they are investing hundreds of billions of dollars in digital infrastructure, we continue to take advantage of the opportunity to work with them and grow our company and grow our shareholders' value as a result of that. So Steve and I hope that they continue to have extraordinary success.
Are there any further questions online, Oskar?
There are no further questions online at this time, Chairman.
Thank you. Ladies and gentlemen, that brings us to the closure of our AGM. If you intend to vote on the formal business of the meeting, you should now finalize and submit them as voting will close in five minutes' time. As mentioned, the results of the vote will be published on the ASX later today. With sincere thanks to all our shareholders, I now declare the meeting closed. For those at the venue, I look forward to also speaking to you as we catch up over a refreshment.