Digico Infrastructure REIT (ASX:DGT) outlined what newly appointed CEO Michael Juniper described as “clear operating momentum” during the company’s first-half FY2026 earnings call, pointing to rising contracted capacity in Australia, accelerating development activity at its Sydney One (SYD1) site, and a balance sheet it says is positioned to fund near-term growth.
Juniper, who said he joined the business two months ago after nearly 20 years in the data center industry, told investors his near-term priorities include “quickly” narrowing the gap between the trust’s market valuation and its net asset value, sharpening organizational accountability, and applying a more disciplined approach to capital allocation and recycling. Management expects to achieve AUD 5 million in annual OpEx savings as part of an organizational redesign.
First-half financial performance and updated guidance
Mitchell said the trust has upgraded FY2026 underlying EBITDA guidance to AUD 125 million, the top end of its prior range of AUD 120 million to AUD 125 million, and indicated a second-half skew due to the timing of Australian contract wins. The company declared a first-half distribution of AUD 0.06 per security and maintained full-year distribution guidance of AUD 0.12 per security, reflecting a 90% to 100% payout of full-year FFO. Management cited a 5.3% annualized yield based on the prior day’s closing price.
On the balance sheet, DigiCo ended the period with AUD 349 million in cash and net debt of AUD 1.51 billion, which Mitchell said were largely flat over the half. Capital expenditure totaled AUD 50 million in the first half, with higher spending anticipated in the second half as the SYD1 20-megawatt project completes, toward full-year growth CapEx guidance of AUD 160 million to AUD 180 million. Mitchell also cited a AUD 202 million increase in investment property values, which he attributed to U.S. dollar translation.
SYD1 expansion positioned as “jewel in the crown”
Management repeatedly highlighted SYD1 as the trust’s primary near-term value driver. Juniper said SYD1 is “our most significant growth opportunity” and a “scarce Tier One global carrier hotel in a tightly held market.” He told investors that the next 20 megawatts of capacity at Sydney One are now 100% contracted and that DigiCo is focusing on expanding the site to 88 megawatts “as quickly as possible.”
Chief Development Officer Ralph Goninan said the SYD1 20MW project was upsized from 9MW to 20MW to capture incremental customer demand and deliver high-density capacity faster. He said execution is progressing well, with long lead-time equipment secured and major cooling infrastructure being installed that will also support the broader 88MW build-out. Goninan said the project remains on track and referenced a target yield on cost “above 15%.”
In the Q&A, management said the 15% yield on cost applies to incremental CapEx and does not include the group-level AUD 5 million cost-savings initiative. Management also reiterated that it previously guided the market to AUD 15 million per megawatt for the full build-out cost of SYD1, which it said implies roughly AUD 930 million for the project.
Approvals, power, and delivery sequencing
On project de-risking, Juniper and Goninan said the State Significant Development Approval for the full 88MW project was received in December 2025, and the company has secured 120 MVA of power approval. Goninan said design work for the 88MW project is progressing and nearing completion, and the company has initiated early works and an early contractor involvement process to support efficient delivery. Management said a head contractor is expected to be appointed by Q3 of the calendar year.
On utility connections, Goninan said DigiCo has secured the full power allocation from Ausgrid and has the required “feeders,” with design out to tender and works expected to be completed this year.
Management described the 88MW expansion as modular, with staging intended to align with demand and capital constraints. Juniper said DigiCo has more than 200MW of customer requirements in view, giving it selectivity and reducing reliance on a single counterparty.
Liquidity, funding, and capital partnering
Mitchell said DigiCo ended the half with AUD 658 million of liquidity and gearing of 35.8%, at the low end of its 35% to 45% target range. The trust’s interest rate exposure is hedged to maturity at an effective all-in cost of 6%, with weighted average debt tenor of 3.4 years and no maturities before FY2029.
Juniper said the company has approximately AUD 650 million in cash and undrawn debt lines to fund a significant portion of the SYD1 development, while also progressing capital partnering and recycling initiatives across the Australian portfolio and, opportunistically, U.S. assets. In response to questions, management said expectations for the Australian capital partnering process were unchanged, but noted prospective partners would want visibility on final 88MW costings and sequencing.
U.S. projects: Chicago accounting and Los Angeles permitting
Mitchell provided an accounting explanation for the Chicago asset, saying AUD 18.5 million of pre-completion rental income is treated as unearned rental income on the balance sheet until physical handover. He also said AUD 12.9 million of pre-completion interest payments related to that rental income were included in adjusted FFO to better match revenue and financing costs. Management indicated that once physical handover occurs in the second half, rent and interest would be accounted for “in a normal way.”
Juniper also addressed the company’s Los Angeles project, describing the market as supply-constrained due to land and power limitations. He said DigiCo has voluntarily agreed to prepare an environmental impact report to address public concerns and support the approvals process, while stating the underlying investment thesis for the asset remains unchanged.
Closing the call, Juniper emphasized execution against milestones, maintaining balance sheet strength, and the pivot to SYD1-led growth, while reiterating the OpEx savings target and management’s focus on disciplined capital partnering and recycling to fund accretive projects.
About Digico Infrastructure REIT (ASX:DGT)
Owning and managing a portfolio of digital infrastructure assets.
