Unaudited results for the 6 months ended 30 June 2023
Record organic tenancy additions year-to-date
Half-year revenue and Adjusted EBITDA ahead of expectations
2023 guidance tightened upwards
London, 3 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 2023.
|H1 2023||H1 2022||Change||Q2 2023||Q1 2023||Change|
|Adjusted EBITDA (US$m)1||173.8||136.1||+28%||89.1||84.7||+5%|
|Adjusted EBITDA margin1||50%||51%||-1ppt||50%||50%||-|
|Operating Profit (US$m)||69.3||39.8||+74%||36.3||33.0||+10%|
|Portfolio free cash flow (US$m)1||124.5||100.4||+24%||66.8||57.7||+16%|
|Cash generated from operations (US$m)||147.6||91.0||+62%||111.4||36.2||+208%|
|Net debt (US$m)1||1,714.9||1,082.4||+58%||1,714.9||1,734.2||-1%|
1. Alternative Performance Measures are described in our defined terms and conventions.
TOM GREENWOOD, CHIEF EXECUTIVE OFFICER, SAID:
“I am delighted with the Company’s performance in the first half of the year, which included delivering record organic tenancies and continuing improvements in customer delivery. The team also continues to make solid progress on our 2023 goals of acquisition integration, tenancy ratio expansion, accelerating Adjusted EBITDA growth and reducing net leverage. Accordingly, we have tightened our full-year 2023 guidance to the top end of our previously announced range and we remain committed to delivering sustainable value for all our stakeholders.”
Structural growth and robust business model driving record financial performance across a number of key metrics
- H1 2023 revenue increased by 32% year-on-year to US$350.2m (H1 2022: US$265.4m) driven by strong organic tenancy growth across the Group, acquisitions in Malawi and Oman and contractual escalators.
- Organic revenue increased 18% year-on-year, of which 9% was due to tenancy growth and 9% due to power and CPI escalators, net of foreign exchange movements.
- Q2 2023 revenue increased by 5% quarter-on-quarter to US179.4m (Q1 2023: US$170.8m).
- H1 2023 Adjusted EBITDA increased by 28% year-on-year to US$173.8m (H1 2022: US$136.1m), mainly driven by tenancy growth.
- Excluding acquisitions, Adjusted EBITDA increased by 13% year-on-year.
- Q2 2023 Adjusted EBITDA increased by 5% quarter-on-quarter to US$89.1m (Q1 2023: US$84.7m).
- H1 2023 Adjusted EBITDA margin decreased 1ppt year-on-year to 50% (H1 2022: 51%), reflecting an increase in both power-linked revenues and power operating expenses, due to higher fuel prices.
- Excluding the impact of higher fuel prices, Adjusted EBITDA margin increased 2ppt year-on-year.
- Operating profit increased 74% year-on-year to a record US$69.3m (H1 2022: US$39.8m) largely driven by Adjusted EBITDA growth.
- H1 2023 finance costs increased by 5% year-on-year to US$110.3m, driven by an increase in interest costs that largely reflects debt drawn in Oman and at Group level in December 2022, partially offset by non-cash foreign exchange movements.
- Loss before tax decreased to US$39.4m (H1 2022 US$122.2m), driven by an increase in operating profit and a decrease in other gains and losses and foreign exchange losses.
- Portfolio free cash flow increased by 24% year-on-year to a record US$124.5m (H1 2022: US$100.4m), driven by Adjusted EBITDA growth partially offset by timing of non-discretionary capital expenditure.
- Cash generated from operations increased by 62% to a record US$147.6m (H1 2022: US$91.0m), driven by higher Adjusted EBITDA and movements in working capital.
- Net leverage decreased by 0.3x quarter-on-quarter to 4.8x (Q1 2023: 5.1x), primarily driven by growth in Adjusted EBITDA.
- The Group continues to target being in or around the high-end of its 3.5-4.5x target range by Q4 2023.
- Business underpinned by long-term contracted revenues of US$4.9bn (H1 2022: US$4.2bn), of which 99% is from large multinational MNOs, with an average remaining life of 7.1 years (H1 2022: 7.2 years).
Consistent and strong tenancy growth reflecting leadership positions in structurally high-growth markets
- Sites increased by 3,176 year-on-year to 13,870 (H1 2022: 10,694), reflecting organic site growth of 657 sites and the acquisition of 2,519 sites in Oman.
- Sites increased organically by 186 quarter-on-quarter.
- Sites increased organically by 317 year-to-date.
- Tenancies increased by 5,334 year-on-year to 25,883 (H1 2022: 20,549), reflecting a record addition of 2,317 organic tenancies and 3,017 acquired tenancies in Oman.
- Tenancies increased organically by 763 quarter-on-quarter.
- Tenancies increased organically by 1,391 year-to-date.
- Quarter-on-quarter tenancy ratio increased to 1.87x (Q1 2023: 1.84x), reflecting solid progress across several markets: DRC, Ghana, Oman and Malawi.
Environmental, Social and Governance (ESG)
Increased rating from Sustainalytics and highest possible ESG score from MSCI reaffirmed; solid progress against KPIs
- Continued progress against the Group’s 2026 Sustainable Business Strategy targets in H1 2023:
- 143m population coverage footprint (FY 22: 141m)
- 99.98% power uptime (FY 22: 99.97%)
- 29% female staff (FY 22: 28%)
- 48% staff trained in Lean Six Sigma (FY 22: 42%)
- 96% local staff in our operating companies (FY 22: 96%)
- Helios Towers’ ESG score of ‘AAA’ from MSCI, the highest score from the investment research firm, was reaffirmed in July 2023.
- In July 2023, Sustainalytics improved Helios Towers’ ESG risk rating from Medium risk (22.6) to Low risk (16.8).
- The Group is currently updating its carbon emissions reduction target to reflect its expansion into four high-growth markets across 2021 and 2022, and expects to publish this updated target by Q1 2024.
2023 outlook and guidance
- The Group has tightened upwards its guidance on all metrics, reflecting strong performance in H1 2023 and robust commercial pipeline:
- Tenancy additions of 1,900 - 2,100 (prior: 1,600 – 2,100), of which 40% are anticipated to be new sites.
- Adjusted EBITDA of US$355m - US$365m (prior: US$350m - US$365m).
- Portfolio free cash flow of US$235m - US$245m (prior: US$230m - US$245m).
- Capital expenditure of US$180m - US$210m (prior: US$170m – US$210m).
- Of which, US$40m is anticipated to be non-discretionary capital expenditure.
For further information go to: www.heliostowers.com
Chris Baker-Sams – Head of Strategic Finance and Investor Relations
+44 (0)752 310 1475
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, 3 August 2023. 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 2023 Results Conference Call
Event Name: H12023
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: +44 204 587 0498
- South Africa (local): 087 550 8441
- USA (local): +1 646 664 1960
- Passcode: 059607
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 over 13,800 telecommunication tower sites in nine countries across Africa and the Middle East.
- 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 2022, published on the Group’s website. Reconciliations of APMs to the equivalent statutory measure are also included in this half-year financial report.