Cordiant Digital Infrastructure (LON: CORD), an externally managed closed-end investment company focused on digital infrastructure, today announced its results for the period ended March 31, 2022, and provided updates on its three digital infrastructure portfolio companies, namely Ceské Radiokomunikace (CRA), Hudson Interxchange (formerly DataGryd), and Emitel, as well as its capital raising progress to-date.

Ceské Radiokomunikace (CRA)

Ceské Radiokomunikace (CRA) owns and operates 660 mobile and broadcast towers, 6 edge data centers, 2.3k miles (3.7k kilometers) of fiber-optic networks, and 3.0k microwave connections in the Czech Republic.

Operations

Over the past year, CRA generated new sales opportunities across its various business lines as follows:

  • Signed a 15-year contract with the Czech Ministry of Interior to provide guaranteed connectivity to separate high-quality networks for public protection and disaster relief (PPDR)
  • Signed a 10-year network backbone contract extension
  • Secured an expansion of data center services to a major retailer
  • Won a contract to deploy 10k sensors for energy management

Financials

For the year ending March 31, 2022, CRA reported revenue of $100m (CZK2.2 billion), an ~8.5% decrease year-over-year, and EBITDA of $52m (CZK1.15 billion), a ~10.5% decrease year-over-year. Therefore, the company’s EBITDA margin was 52%, a ~150 bps decline year-over-year.

Additionally, during the past year, CRA invested $11m (CZK240 million) in growth capital expenditure initiatives, which will support revenue growth in future years.

Hudson Interxchange (HIX) – formerly DataGryd

Hudson Interxchange (HIX) operates a ~170k sqft interconnection-focused data center on the 5th, 6th, 7th, and 8th floors of 60 Hudson Street in New York City, New York. The facility provides retail and wholesale colocation, at deployment sizes of 250 kilowatts to 5 megawatts of capacity, as well as connectivity services.

Operations

Presently, Hudson Interxchange has fully-leased the 5th floor of 60 Hudson Street to a major wholesale colocation provider on a long-term basis. Additionally, HIX has started to lease-up the 6th floor, through direct deals with retail colocation customers. At present, HIX notes that its pipeline of customers stands at more than 2 megawatts of demand.

In terms of expansion, Hudson Interxchange has secured an option to lease two more floors in 60 Hudson Street, allowing it to take-up an additional ~120k sqft of raised floor data center space. In turn, HIX can increase the size of its operations in the building to ~290k sqft over the next several years.

Overall, Cordiant Digital Infrastructure anticipates investing an incremental $75m of expansion capital into Hudson Interxchange (HIX) over the coming three years.

Emitel

Emitel operates 569 broadcast and wireless towers in Poland which distribute television and radio signals nationwide for television and radio broadcasters. In Poland, Cordiant Digital Infrastructure will use Emitel to pursue expansion opportunities in the digital infrastructure sub-sectors of towers, data centers, and fiber.

Recall, in January 2022, Cordiant agreed to acquire Emitel for consideration of 1.97bn Polish zloty ($487m). As of March 31, 2022, Cordiant has committed £366m ($481m) to the acquisition.

In terms of timing, Cordiant’s acquisition of Emitel is expected to close later in 2022. To-date, antitrust approvals have already been granted.

Capital Raising – Cordiant Digital Infrastructure

Cordiant Digital Infrastructure has raised gross proceeds of £795m from its initial public offering (IPO) and follow-on equity issuances. Specifically, these capital raises include:

  • IPO: £370m gross proceeds in February 2021
  • C Shares: £185m gross proceeds from the issuance in June 2021
  • Subscription Shares: £40m through exercises during 2021
  • Ordinary Shares: £200m gross proceeds from the issuance in January 2022

Investment Commitments

In total, Cordiant Digital Infrastructure has made commitments of ~£785m to its portfolio companies, including Ceské Radiokomunikace (£305.6m), Hudson Interxchange (£55.8m initial, £57m future), and Emitel (£366m). As such, Cordiant has committed substantially all (i.e., 99%) of the £795m it has raised to-date.

Investment Pipeline

Presently, Cordiant Digital Infrastructure’s pipeline of investment opportunities stands at over €3.0bn. Of this total, the largest concentration of opportunities is in Western Europe and the UK, followed closely by the United States. By asset class, data center and tower transactions currently represent the largest proportion of investment opportunities.

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