Unaudited results for the 6 months ended 30 June 2022
- Strong organic tenancy additions
- +19% year-on-year Adjusted EBITDA growth
- +36% year-on-year portfolio free cash flow growth
- 2022 guidance reiterated
London, 18 August 2022: Helios Towers plc (“Helios Towers”,“the Group” or “the Company”), the independent telecommunications infrastructure company, today announces results for the 6 months to 30 June 2022.
| H1 2022 | H1 2021 | Change | Q2 2022 | Q1 2022 | Change | |
|---|---|---|---|---|---|---|
| Sites | 10,694 | 8,603 | +24% | 10,694 | 10,511 | +2% |
| Tenancies | 20,549 | 17,090 | +20% | 20,549 | 20,233 | +2% |
| Tenancy ratio | 1.92x | 1.99x | -0.07x | 1.92x | 1.92x | - |
| Revenue (US$m) | 265.4 | 212.4 | +25% | 137.9 | 127.5 | +8% |
| Adjusted EBITDA (US$m)1 | 136.1 | 114.2 | +19% | 69.4 | 66.7 | +4% |
| Adjusted EBITDA margin1 | 51% | 54% | -3ppt | 50% | 52% | -2ppt |
| Operating Profit (US$m) | 39.8 | 26.9 | +48% | 25.4 | 14.4 | +76% |
| Portfolio free cash flow (US$m)1 | 100.4 | 73.8 | +36% | 51.0 | 49.4 | +3% |
| Cash generated from operations (US$m) | 91.0 | 45.7 | +99% | 38.5 | 52.7 | -27% |
| Net debt (US$m)1 | 1,082.4 | 786.0 | +38% | 1,082.4 | 1,012.7 | +7% |
| Net leverage1,2 | 3.9x | 3.2x | +0.7x | 3.9x | 3.7x | +0.2x |
1. Alternative Performance Measures are described in our defined terms and conventions.
2. Calculated as per the Senior Notes definition of net debt divided by annualised Adjusted EBITDA. Annualised Adjusted EBITDA calculated as the most recent fiscal quarter multiplied by 4, adjusted to include the annualised impact of acquisitions in the period.
TOM GREENWOOD, Chief Executive Officer, said:
“We have delivered strong organic tenancy growth in the first half of the year, which combined with the successful integration of acquired assets in Senegal, Madagascar and Malawi has resulted in impressive year-on-year financial performance. Despite broader global macroeconomic uncertainty, our uniquely positioned platform, highly visible base of quality earnings and unparalleled structural growth continues to drive sustainable value creation for all of our stakeholders.”
Financial highlights
- H1 2022 revenue increased by 25% year-on-year to US$265.4m (H1 2021: US$212.4m) driven by acquisitions in Senegal, Madagascar and Malawi and strong organic tenancy growth across the Group, in addition to CPI and power price escalations. Excluding acquisitions, revenue increased 12% year-on-year.
- Q2 2022 revenue increased by 8% quarter-on-quarter to US$137.9m (Q1 2022: US$127.5m).
- H1 2022 Adjusted EBITDA increased by 19% year-on-year to US$136.1m (H1 2021: US$114.2m), driven by revenue growth, with H1 2022 Adjusted EBITDA margin decreasing 3ppt year-on-year to 51% (H1 2021: 54%), reflecting the previously communicated SG&A investment to support the Group’s ongoing expansion into ten markets and higher fuel costs in DRC in Q2 2022.
- Q2 2022 Adjusted EBITDA increased by 4% quarter-on-quarter to US$69.4m (Q1 2022: US$66.7m), with Q2 2022 Adjusted EBITDA margin at 50% (Q1 2022: 52%).
- Operating profit increased 48% year-on-year to US$39.8m (H1 2021: US$26.9m) driven by strong revenue growth, partially offset by a modest increase in administrative expenses as part of the Group’s ongoing expansion.
- Loss before tax increased to US$122.2m (H1 2021 US$43.6m), driven by a US$83.8m year-on-year increase in non-cash expenses related to both the fair value movements of the embedded derivatives in the Group's bond and foreign exchange movements on Euro and US dollar denominated intercompany borrowings.
- Portfolio free cash flow increased by 36% year-on-year to US$100.4m (H1 2021: US$73.8m), driven by Adjusted EBITDA growth and timing of non-discretionary capital expenditure.
- Cash generated from operations increased 99% to US$91.0m driven by higher Adjusted EBITDA and movements in working capital.
- Net leverage increased by +0.7x year-on-year to 3.9x (H1 2021: 3.2x), primarily due to acquisitions in Madagascar and Malawi, and quarter-on-quarter by 0.2x (Q1 2022: 3.7x), remaining comfortably within the Group's medium-term target range of 3.5x - 4.5x.
- Strong balance sheet with 96% of drawn debt at a fixed rate, no near-term maturities and fully-funded for announced transactions.
- Business underpinned by long-term contracted revenues of US$4.2bn (H1 2021: US$3.5bn), of which 99% is from large multinational MNOs, with an average remaining life of 7.2 years (H1 2021: 7.4 years).
- Pro forma for announced transactions in Oman and Gabon, the Group has contracted revenues of US$5.3 billion.
- CPI and power price escalators embedded into customer contracts provides an effective hedge against inflation and fuel price movements over a full-year cycle.
Operational highlights
- Sites increased by 2,091 year-on-year to 10,694 sites (H1 2021: 8,603 sites), reflecting 1,213 acquired sites in Malawi and Madagascar and 878 organic site additions.
- Sites increased organically by 183 quarter-on-quarter (Q1 2022: 10,511).
- Tenancies increased by 3,459 year-on-year to 20,549 tenants (H1 2021: 17,090 tenants), reflecting 1,692 acquired tenancies in Malawi and Madagascar and 1,767 organic tenancy additions.
- Tenancies increased organically by 316 quarter-on-quarter (Q1 2022: 20,233).
- Tenancy ratio decreased 0.07x year-on-year to 1.92x (H1 2021: 1.99x), reflecting the dilutive impact of acquired assets in Madagascar (1.20x) and Malawi (1.58x).
Environmental, Social and Governance (ESG)
- Helios Towers has been awarded a ‘AAA’ ESG score from MSCI, the highest score from the investment research firm, in addition to being included in the FTSE4Good Index, a series designed to measure the performance of companies demonstrating strong ESG practices. This further highlights Helios Towers’ commitment to sustainable business and its purpose of driving the growth of mobile communications in Africa and the Middle East.
Strategic Updates
- The Group continues to progress with the closings of passive infrastructure assets in Oman and the potential acquisition of Airtel Africa’s tower assets in Gabon, with the expected timings and updates outlined below:
- Oman: Subject to completing the remaining customary closing conditions including obtaining regulatory approval, the Group anticipates the acquisition of Oman Telecommunications Company (“Omantel”) to close in H2 2022.
- On 7 June 2022, Helios Towers announced it had entered into an agreement pursuant to which Rakiza Telecommunications Infrastructure LLC (“Rakiza”) will purchase a 30% minority stake in the purchase of Omantel Telecommunications Company (S.A.O.G)’s (“Omantel”) passive infrastructure assets in Oman, with Helios Towers purchasing the remaining 70%.
- Partnership combines Helios Towers’ proven operational expertise with a local partner that has extensive local market knowledge.
- Gabon: As previously announced, Helios Towers and Airtel Africa have extended the memorandum of understanding arrangement. Subject to obtaining a passive infrastructure licence, the acquisition of tower assets in Gabon is expected to close in H2 2022.
- Oman: Subject to completing the remaining customary closing conditions including obtaining regulatory approval, the Group anticipates the acquisition of Oman Telecommunications Company (“Omantel”) to close in H2 2022.
2022 outlook and guidance
- Following strong operational and financial performance in H1 2022, the Group has reiterated its FY 2022 guidance of:
- 1,200 – 1,700 organic tenancy additions, of which 60% are expected to be new sites.
- Lease rate per tenant to increase in the range of 3% - 5% from FY 2021 (2021: US$26.4k per tenant).
- Adjusted EBITDA margin of 51% - 53% (FY 2021: 53.6%), with the YoY decrease driven by the impact of new acquisitions and corporate SG&A investment required for the expansion of the Group’s operations to ten markets.
- The acquisition of Airtel Africa’s passive infrastructure company in Malawi, closed at the end of March, is anticipated to deliver Adjusted EBITDA of approximately US$6m for its nine months of operation in FY 2022.
- The Group continues to target capex of US$810m – US$850m in FY 2022.
- As previously guided, excluding acquisitions the Group anticipates US$160m - US$200m of capex, of which, US$27m - US$32m is non-discretionary capex.
- The Group anticipates acquisition capex of approximately US$650m in 2022, reflecting the acquisitions in Oman and Malawi, and deferred acquisition payments in Senegal and Madagascar.
For further information go to: www.heliostowers.com
Investor Relations
Chris Baker-Sams – Head of Strategic Finance and Investor Relations
+44 (0)752 310 1475
Media relations
Edward Bridges / Stephanie Ellis
FTI Consulting LLP
+44 (0)20 3727 1000
Helios Towers’ management will host a conference call for analysts and institutional investors at 09.30 BST on Thursday, 18 August 2022. For the best user experience, please access the conference via the webcast. You can pre-register and access the event using the link below:
Registration Link - Helios Towers H1 2022 Results Conference Call
Event Name: H12022
Password: HELIOS
If you intend to participate in Q&A during the call or are unable to use the webcast, please dial in using the details below:
- Europe & International +44 203 936 2999
- South Africa (local) 087 550 8441
- USA (local) +1 646 664 1960
- Passcode: 233445
Read the full announcement here
About Helios Towers
- Helios Towers is a leading independent telecommunications infrastructure company, having established one of the most extensive tower portfolios across Africa. It builds, owns and operates telecom passive infrastructure, providing services to mobile network operators.
- Helios Towers owns and operates telecommunication tower sites in Tanzania, Democratic Republic of Congo, Congo Brazzaville, Ghana, South Africa, Senegal, Madagascar and Malawi. Following recent acquisition agreements Helios Towers expects to establish a presence in two new markets across the Middle-East and Africa. Including these acquisitions and committed BTS, the Group’s total site count is expected to increase from over 10,500 towers to over 14,000.
- 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.
Alternative Performance Measures
The Group has presented a number of Alternative Performance Measures (“APMs”), which are used in addition to IFRS statutory performance measures. The Group believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional helpful information on the performance of the business. These APMs are consistent with how the business performance is planned and reported within the internal management reporting to the Board. Loss before tax, gross profit, non-current and current loans and long-term and short-term lease liabilities are the equivalent statutory measures (see ‘Certain defined terms and conventions’). For more information on the Group’s Alternative Performance Measures, see the Group’s Annual report for the year ended 31 December 2021, published on the Group’s website. Reconciliations of APMs to the equivalent statutory measure are included in the Group’s half-year and Annual financial reports.