Maas Group Holdings Ltd (ASX: MGH) shares have jumped after the S&P/ASX 300 Index (ASX: XKO) company announced an extra $300 million investment in data centre company Firmus, as well as $855 million in new contracts with the same company.
Image source: Getty Images
Profit to surge on AI valuation
Maas Group also upgraded its underlying EBITDA expectations to $300 to $310 million, which included an uplift in value of the company's Firmus shares.
The company's previous guidance, last reaffirmed in May, was for underlying EBITDA of $250 to $280 million.
Maas Group said the new contracts with Firmus would be delivered over the next 18 months, and "incorporates the manufacture, supply and delivery of modular Firmus Power Cube solutions and associated high-voltage infrastructure''.
Maas already had a master services agreement, which ensured it would be the exclusive provider of powertrain units for Firmus' Australian data centre pipeline.
Maas said in a statement to the ASX:
This new work order from Firmus takes the current work in hand for MGH's wholly owned electrical infrastructure subsidiary, JLE Group, from Firmus and other customers to $1.2 billion to be delivered over the next 18 months. In addition to the $855 million purchase order, MGH also has a significant tender pipeline within its electrical business and continues to progress other opportunities within Firmus' proposed 3.3GW Australian AI factory roll-out and will provide further updates as appropriate.
Regarding the earnings guidance, Maas Group said its previous investment in Firmus needed to be measured at fair value and recorded through profit and loss statements.
The company said that the shares it had bought had increased "materially" in value, "evidenced by reference to the pricing of subsequent capital raising rounds undertaken by Firmus and the prices at which secondary market trading in Firmus shares has occurred, giving rise to the value uplift reflected in the updated guidance range''.
The profit guidance figure includes the contribution of Heidelberg Materials Australia, which Maas Group recently agreed to sell for up to $1.7 billion.
Maas Group Chief Executive Officer Wes Maas said regarding the new announcement:
Today's update reflects the underlying momentum in our continuing businesses – particularly across electrical, residential and commercial real estate. The new electrical infrastructure work orders will underpin continued strong growth in a key segment of our business. As well as a strong endorsement our technical and delivery capability, this work order to be delivered over the next 18 months strengthens the Group's position as partner-of choice in the development of next-generation AI and data infrastructure in Australia. With a significant tender pipeline and the ongoing progression of other opportunities within Firmus's proposed 3.3GW Australian AI factory roll-out, we anticipate we will provide further updates as appropriate as further work is secured.
Maas Group shares were 8.1% higher at $5.36. The company is valued at $1.79 billion.
