Helios Towers plc announces results for the year and quarter ended 31 December 2022
- FY 2022 results in line with expectations
- Record site and tenancy growth delivered
- Adjusted EBITDA growth of 24-29% targeted in FY 2023
London, 16 March 2023: Helios Towers plc (“Helios Towers”, “the Group” or “the Company”), the independent telecommunications infrastructure company, today announces results for the year to 31 December 2022 (“FY 2022”).
|FY 2022||FY 2021||Change||Q4 2022||Q3 2022||Change|
|Adjusted EBITDA (US$m)1||282.8||240.6||+18%||76.0||70.7||+7%|
|Adjusted EBITDA margin1||50.4%||53.6%||-3ppt||50.0%||49.3%||+1ppt|
|Operating Profit (US$m)||80.3||59.0||+36%||17.4||23.1||-24%|
|Portfolio free cash flow (US$m)1||201.4||168.3||+20%||56.3||44.7||+26%|
|Cash generated from operations (US$m)||193.2||195.9||-1%||31.5||70.7||-55%|
|Net debt (US$m)1||1,678.0||948.5||+77%||1,678.0||1,148.1||+46%|
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.
TOM GREENWOOD, CHIEF EXECUTIVE OFFICER, SAID:
“In my first year as CEO, I am delighted with the team’s performance and the progress we have made. We have delivered a number of successes despite challenging global macro volatility: stellar operational delivery for our customers, record tenancy additions, smooth acquisition integration and strong financial performance. We also continued to build the foundations for future growth: investing in our people, focusing on customer service excellence, evolving our strategy, and delivering for our communities, the environment around us and our investors.
All nine of our markets feature substantial mobile growth over the coming years, driven by low mobile penetration today, huge population growth and the demand for higher-quality and ubiquitous mobile coverage. We have built an exciting platform to drive sustainable value creation and organic growth across all our markets in 2023 and beyond, capturing the compelling growth opportunity across the region.”
- FY 2022 revenue increased by 25% year-on-year to US$560.7m (FY 2021: US$449.1m), driven by strong organic revenue growth of 14%, reflecting organic tenancy growth and CPI and power escalations, in addition to the acquisition of four tower portfolios in new markets across 2021 and 2022.
- Q4 2022 revenue increased by 6% quarter-on-quarter to US$151.9m (Q3 2022: US$143.4m).
- FY 2022 Adjusted EBITDA increased by 18% year-on-year to US$282.8m (FY 2021: US$240.6m), driven by tenancy growth, with Adjusted EBITDA margin decreasing 3ppt year-on-year to 50.4% (FY 2021: 53.6%).
- The decrease in Adjusted EBITDA margin reflects the combined impact of acquired assets with low initial tenancy ratios and higher power costs across the Group, most notably in DRC, that resulted in both higher revenues and power operating expenses.
- Q4 2022 Adjusted EBITDA increased by 7% quarter-on-quarter to US$76.0m (Q3 2022: US$70.7m), with Q4 2022 Adjusted EBITDA margin improving 1ppt to 50.0% (Q3 2022: 49.3%).
- FY 2022 operating profit increased by 36% year-on-year to a record US$80.3m (FY 2021: US$59.0m) driven by Adjusted EBITDA growth, partially offset by higher depreciation due to the increase in acquired and organic sites.
- Loss before tax increased to US$162.5m (2021 US$119.4m), driven by a US$54.1 million 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, primarily on Euro and US dollar denominated intercompany borrowings.
- FY 2022 portfolio free cash flow increased by 20% year-on-year to US$201.4m (FY 2021: US$168.3m), driven by the growth in Adjusted EBITDA and higher cash conversion.
- Q4 2022 portfolio free cash flow increased by 26% quarter-on-quarter to US$56.3m (Q3 2022: US$44.7m), driven by Adjusted EBITDA growth and lower tax payments.
- FY 2022 cash generated from operations decreased by 1% year-on-year to US$193.2m (FY 2021: US$195.9m), due to working capital movements, partially offset by the increase in Adjusted EBITDA.
- Working capital outflow in the year of US$70.5m was driven by investment for future growth and performance, in addition to timing of customer payments.
- Net leverage of 5.1x increased by +1.5x year-on-year (FY 2021: 3.6x) and +1.0x quarter-on-quarter (Q3 2022: 4.1x), primarily driven by the acquisitions in Malawi and Oman in March and December 2022, respectively.
- Contracted revenues increased by 20% year-on-year to US$4.7bn (FY 2021: US$3.9bn), with an average remaining life of 7.6 years (FY 2021: 7.6 years). With 99% of this contracted revenue from blue-chip MNOs, with embedded CPI and power price escalators, it underpins the growth and resilience of our business.
- Sites increased by 3,993 year-on-year to 13,553 sites (FY 2021: 9,560 sites), reflecting a record 751 organic site additions and the acquisition of 3,242 sites during the year.
- Sites increased by 2,681 quarter-on-quarter (Q3 2022: 10,872), reflecting 162 organic site additions and 2,519 acquired sites in Oman.
- Tenancies increased by a record 5,716 year-on-year to 24,492 tenants (FY 2021: 18,776 tenants), reflecting 1,601 organic tenancy additions and 4,115 acquired tenancies through the year.
- Tenancies increased by 3,579 quarter-on-quarter (Q3 2022: 20,913), reflecting 562 organic tenancy additions and 3,017 acquired tenancies in Oman.
- Tenancy ratio decreased 0.15x year-on-year to 1.81x (FY 2021: 1.96x), reflecting the acquisitions in Malawi and Oman, with a combined tenancy ratio of 1.3x.
- In-line with Helios Towers’ business model, the Company expects to lease-up these acquired portfolios, driving margin expansion and returns.
Environmental, Social and Governance (ESG)
- Helios Towers is committed to sustainable business and its purpose of driving the growth of mobile communications in Africa and the Middle East, and maximising impact in its key focus areas of digital inclusion, local, diverse and talented teams, climate action and responsible governance.
- The Company has been positively recognised for its Sustainable Business Strategy and commitment to transparency;
- AAA score from MSCI, the highest possible rating, recognising the Company’s leading governance practices and approach sustainable business strategy embedded across the business.
- B score from CDP (increasing from B- in 2021), reflecting the Company’s commitment and progress on climate action.
- 87% score for WDI disclosure, including a special mention for ‘workforce action’ at the Workforce Transparency Awards.
- Inclusion in the FTSE4Good Index, which measures the performance of companies demonstrating strong ESG practices.
- Effective from the 2023 long term incentive plan (LTIP) awards, the Company has introduced an impact scorecard that will account for 20% of the LTIP awards and is designed to measure progress against certain ESG targets included in the Company’s Sustainable Business Strategy.
2023 outlook and guidance
- In-line with medium-term guidance provided at the Company’s Capital Markets Day in May 2022, the Group targets tenancy additions of 1,600 – 2,100 in FY 2023, of which 40% are anticipated to be new sites.
- FY 2023 Adjusted EBITDA of US$350m – US$365m, reflecting year-on-year growth of 24% - 29%.
- FY 2023 portfolio free cash flow of US$230m – US$245m, reflecting year-on-year growth of 14 – 22% and cash conversion in the range of c.65 - 70%, in-line with medium-term guidance.
- FY 2023 capital expenditure in the range of US$170m – US$210m, broadly aligning with the medium-term outlook provided at the Company’s Capital Markets Day.
- 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 GMT on Thursday, 16 March 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 FY 2022 Results Conference Call
Event Name: FY2022
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: 958818
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 and the Middle East. It builds, owns and operates telecom passive infrastructure, providing services to mobile network operators.
Helios Towers owns and operates over 13,500 telecommunication tower sites in Tanzania, Democratic Republic of Congo, Congo Brazzaville, Ghana, South Africa, Senegal, Malawi, Madagascar and Oman.
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, please see the Alternative Performance Measures section of this release.