Unaudited results for the 9 and 3 months ended 30 September 2020

Maintaining track record of consistent and profitable EBITDA growth

Strengthened balance sheet with reduced cost of capital to support inorganic growth strategy

London, 29 October 2020: Helios Towers plc (“Helios Towers”, “the Group” or “the Company”), the independent telecommunications infrastructure company, today announces results for the 9 and 3 months to 30 September 2020.

 

9 months ended

3 months ended

 

Q3 2020

Q3 2019

Change

Q3 2020

Q2 2020

Change

Sites

7,222

6,903

          +5%

7,222

7,092

+2%

Tenancies

15,082

14,226

+6%

15,082

14,906

+1%

Tenancy ratio

2.09x

2.06x

+0.03x

2.09x

2.10x

-0.01x

Revenue (US$m)

307.9

288.0

+7%

103.6

102.2

+1%

Adjusted EBITDA (US$m)

166.5

151.5

+10%

57.4

55.1

+4%

Adjusted EBITDA margin

54%

53%

+1ppt

55%

54%

+1ppt

Financial highlights

  • Continuing to deliver on our growth strategy, with revenue for the 9 months to 30 September 2020 increasing by 7% year-on-year to US$307.9m (30 Sep 2019: US$288.0m), driven by continued growth in the number of sites and tenancies across the Group.
    • Q3 2020 Group revenue increased by 1% quarter-on-quarter to US$103.6m (Q2 2020: US$102.2m).
  • Adjusted EBITDA for the 9 months to 30 September 2020 increased by 10% year-on-year to US$166.5m (30 Sep 2019: US$151.5m), driven by tenancy growth and continued improvements in operational efficiency. Adjusted EBITDA margin for the 9 month period of 54% reflects a 1ppt year-on-year increase (30 Sep 2019: 53%).
    • Q3 2020 Adjusted EBITDA increased by 4% quarter-on-quarter to US$57.4m (Q2 2020: US$55.1m), with Q3 2020 Adjusted EBITDA margin at a record 55% (Q3 2019: 54%), up 1ppt, within our medium-term target range of 55-60%.
  • Enhanced shareholder value by improving the Group’s capital structure with the successful upsize and pricing on 9 September 2020 of US$225m of aggregate principal of the existing 7.00% Senior Notes due 2025. The notes were issued at a price of 106.25 of principal and reflect a yield-to-maturity of 5.6%, lowering the Group’s cost of debt. The proceeds will be utilised primarily for expansion opportunities in existing and new markets.

Operational highlights

  • Helios Towers continues to monitor the impact of COVID-19 on its operations. The telecommunications sector has been classified as an ‘essential service’ in our markets, allowing us to operate at our normal high levels of service. To date, there has been minimal impact on the Group’s delivery of service and operational execution: impact has been limited to minor delays to customer rollouts earlier in the year.
  • Operational performance continues at very high levels, with power uptime of 99.99% recorded in Q3 2020 for a second consecutive quarter.
  • Increase in tenancies of 856 tenants year-on-year to 15,082 tenants (Q3 2019: 14,226 tenants). Q3 2020 tenancies increased by 176 quarter-on-quarter (Q2 2020: 14,906).
  • Increase of 319 sites year-on-year to 7,222 sites (Q3 2019: 6,903 sites). Increase of 130 sites quarter-on-quarter (Q2: 7,092).
  • Tenancy ratio increased year-on-year by 0.03x to 2.09x (Q3 2019: 2.06x). Q3 2020 tenancy ratio marginally decreased by 0.01x quarter-on-quarter to 2.09x (Q2 2020: 2.10x), reflecting strong site growth.

Strategic Updates

  • We continue to build upon our track record of executing M&A, with significant opportunities in existing and new markets. The Group is analysing opportunities representing circa 10,000 towers in total, and are conducting due diligence on a number of potential transactions, representing both in-market and new market opportunities.
  • On 12 August, Helios Towers signed an agreement with Free Senegal, the second largest mobile operator in Senegal, to acquire its 1,220 tower portfolio, as well as 400 build-to-suit sites committed over the next 5 years. The Group remains on track to close the Senegal transaction in Q1 2021, as previously indicated.
  • The Senegal transaction enables the Group to enter a new market, representing the first key milestone against our 2025 strategic ambitions to increase our operational presence to 8+ markets. The sites consolidated on Day-1 of the acquisition represent c.25% of the Group’s total targeted site expansion to reach our 2025 strategic target of 12,000+ sites.

ESG

  • In line with our ESG Roadmap as discussed at the H1 results, we released our Sustainable Business Strategy Summary presentation on our website, which can be found at https://www.heliostowers.com/investors/results-reports-and-presentations.
  • On Thursday 19 November 2020, we will present to shareholders our integrated Sustainable Business Strategy (dial-in details to follow). The presentation will set out our long term targets and our contribution to the UN Sustainable Development Goals. Registration for the presentation can be found at: incommuk.com/clients/heliostowersSBS.
  • Helios Towers’ Sustainable Business Strategy will help the company maximise the positive impact it is having for all its stakeholders, and deliver on its purpose of driving the growth of communications in Africa.

2020 Outlook and guidance

  • In Q3 2020 we have achieved another quarter of Adjusted EBITDA growth, and high uptime performance, against the backdrop of COVID-19.
  • Our tenancy pipeline remains robust, and whilst there were some short term COVID-19 delays to customer rollout earlier in the year, we still expect incremental tenancies for 2020 to be approximately 1,000, within the previously communicated range of 1,000 - 1,500.
  • Capex guidance has been revised to US$80m - 110m (vs US$110m - 140m previously guided), driven by proportionately lower growth capex.
  • We expect rollout for the next year to remain in line with medium-term guidance, reflecting the continued strong demand for mobile and data communication infrastructure within our markets and the healthy pipeline of existing orders across all our regions.

KASH PANDYA, CHIEF EXECUTIVE OFFICER, SAID:

“We are delighted to report another quarter of continued EBITDA growth, demonstrating the resilience of our business and our sustained focus on profitable expansion. In the context of the COVID-19 pandemic, our teams on the ground have adapted to conditions in each of our local markets, enhancing safety measures while continuing to operate at peak levels of operational efficiency through continued focus on our business excellence strategy.

With strong support from the public debt markets, in September we raised an additional US$225m through a tap of our 2025 bond, further reducing our overall cost of capital. This fundraising provides additional capacity for future transactions and positions us well to continue to pursue a balanced growth strategy that enhances value for all our stakeholders.

We are also pleased with the progress we have made to establish our ESG targets and we are excited to speak to stakeholders in November to share our Sustainable Business Strategy, and to present our long term targets and contribution to the UN Sustainable Development Goals”.

Investor Relations

Manjit Dhillon

                                         

                  +44 (0)776 723 7010

Media Relations
Edward Bridges / Stephanie Ellis FTI Consulting LLP +44 (0)20 3727 1000

 

Read the full announcement here

Helios Towers’ management will host a conference call for analysts and institutional investors at 09.30 BST on Thursday, 29 October 2020. Dial in details for the conference call are:

Europe & International: +44 20 3936 2999
South Africa (local): 087 550 8441
USA (local): 1 646 664 1960

Passcode: 676558

 

About Helios Towers

  • Helios Towers is a leading independent telecommunications infrastructure company in Africa, having established one of the continent's most extensive tower portfolios with 7,222 towers across five countries. It builds, owns and operates telecom passive infrastructure, providing services to mobile network operators.
  • Helios Towers owns and operates more sites than any other operator in each of Tanzania, Democratic Republic of Congo (“DRC”), and Congo Brazzaville. It is also a leading operator in Ghana with a strong urban presence and established a presence in South Africa in 2019.
  • Helios Towers pioneered the model in Africa of buying towers that were held by single operators and providing services utilising the tower infrastructure to the seller and other operators. This allows wireless operators to outsource non-core tower-related activities, enabling them to focus their capital and managerial resources on providing higher quality services more cost-effectively.

For further information go to:

www.heliostowers.com

To view this announcement on the LSE go to:

https://www.londonstockexchange.com/news-article/tidm/headline/14736094