SKS secures $22 million data centre contract

SKS Technologies Group (ASX: SKS) has secured a $22 million data centre contract with major construction company, Erilyan Projects.

The project, located in Melbourne’s western suburbs, follows the $30 million contract awarded by Erilyan Projects to SKS Technologies in November 2023 for works on Building A of an international hyperscale data facility.

Under this new contract, the project relates to the commencement of construction of a second facility, Building B, that will be built alongside the first one. Work on the project will be completed by June 2025.

This contract award, in conjunction with other recent wins across the business, as well as new opportunities expected to be converted throughout the current financial year, increases our revenue forecast for FY2025 to approximately $260 million.

“The awarding of this second contract with Erilyan Projects underscores the business’s quality of execution on the first project and ability to meet complex project requirements,” CEO, Matthew Jinks, said.

“It is a sign of trust in our ability to deliver this new project and satisfaction with our delivery on the first project.

“In continuing to work on the facility, SKS Technologies can enhance operational efficiency by leveraging its existing knowledge of the site requirements and customer preferences.

“We take the view with all of our projects that high quality work and a customer focus can lead to further work with the same customer and/or the same site. It is this approach that has built our solid reputation in the data centre sector over a relatively short period of time.”

The scope of works involves the fit-out of three data halls totalling 12MW within an existing building, with each data hall having a capacity of 4MW. It also includes:

• high voltage and low voltage cabling, installation and testing of client-supplied equipment, transformers, generators and main switchboards; and
• design and co-ordination, as well as the supply and installation of all cable support systems, general switchboards, lighting, power and structured cabling.

The awarding of the contract takes work on hand to $188 million. The project will be funded through existing working capital and bank financing facilities.

“With the recent increase of our CBA bank facilities and the exemplary FY24 financial results, the Board remains comfortable that the current working capital position can continue to support the current growth plans for the business,” Mr Jinks also said.