Unaudited trading update for the three months ended 31 March 2023
Record year-on-year organic tenancy additions
+27% year-on-year Adjusted EBITDA growth
2023 guidance reiterated
London, 18 May 2023: Helios Towers plc (“Helios Towers”, “the Group” or “the Company”), the independent telecommunications infrastructure company, today announces results for the three months to 31 March 2023 (“Q1 2023”).
|Q1 2023||Q1 2022||Change||Q1 2023||Q4 2022||Change|
|Adjusted EBITDA (US$m)1||84.7||66.7||+27%||84.7||76.0||+11%|
|Adjusted EBITDA margin1||50%||52%||-2%||50%||50%||-|
|Operating Profit (US$m)||33.0||14.4||+129%||33.0||17.4||+90%|
|Portfolio free cash flow (US$m)1||57.7||49.4||+17%||57.7||56.3||+2%|
|Cash generated from operations (US$m)||36.2||52.7||-31%||36.2||31.5||+15%|
|Net debt (US$m)1||1,734.2||1,012.7||+71%||1,734.2||1,678.0||+3%|
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:
“Following two years of transformational expansion, concluding with the Oman acquisition closing in December 2022, we have started our next chapter with strong performance that demonstrates the quality of our enlarged platform. Our leading positions in high-growth markets has supported one of our best ever quarters of organic tenancy additions, which combined with our robust business model, that features CPI and power price protections, has supported double-digit organic Adjusted EBITDA growth year-on-year.
Looking forward, we have maintained our guidance for the full-year, that reflects strong growth, disciplined capital allocation and a clear pathway to deleveraging. We remain laser focused on operational execution and continuing to drive sustainable value for all our stakeholders – our customers, partners, people, environment, communities and investors.”
- Revenue increased 34% year-on-year to US$170.8m (Q1 2022: US$127.5m), driven by strong organic revenue growth and acquisitions in Malawi and Oman. Excluding acquisitions, revenue increased 17% year-on-year driven by strong organic tenancy additions and CPI and power price escalations. Revenue increased by 12% quarter-on-quarter (Q4 2022: US$151.9m).
- Adjusted EBITDA increased by 27% year-on-year to US$84.7m (Q1 2022: US$66.7m), driven by tenancy growth, with Adjusted EBITDA margin decreasing to 50% year-on-year (Q1 2022: 52%), reflecting the impact of higher power prices that resulted in power-linked revenues and related operating expenses increasing comparably. Excluding acquisitions, Adjusted EBITDA increased 11% year-on-year. Adjusted EBITDA increased by 11% quarter-on-quarter (Q4 2022: US$76.0m), with Adjusted EBITDA margin remaining flat (Q4 2022: 50%).
- Operating profit increased by 129% year-on-year to US$33.0m (Q1 2022: US$14.4m), largely driven by Adjusted EBITDA growth. Q1 2023 operating profit increased by 90% quarter-on-quarter to US$33.0m (Q4 2022: US$17.4m).
- Portfolio free cash flow increased by 17% year-on-year to US$57.7m (Q1 2022: US$49.4m), driven by Adjusted EBITDA growth and lower tax payments, partially offset by higher lease payments and non-discretionary capital expenditure that reflects the Company’s higher site count. Portfolio free cash flow increased by 2% quarter-on-quarter to US$57.7m (Q4 2022: US$56.3m).
- Cash generated from operations decreased by 31% year-on-year to US$36.2m (Q1 2022: US$52.7m), driven by higher working capital outflows partially offset by Adjusted EBITDA growth. Cash generated from operations increased by 15% quarter-on-quarter to US$36.2m (Q4 2022: $31.5m) driven by Adjusted EBITDA growth and partially offset by working capital outflows.
- Net leverage of 5.1x increased by +1.4x year-on-year (Q1 2022: 3.7x) and remained flat quarter-on-quarter (Q4 2022: 5.1x), with the year-on-year increase driven by the acquisition in Oman. 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$4.8bn (Q1 2022: US$4.2bn), of which 99% is from multinational MNOs, with an average remaining life of 7.3 years (Q1 2022: 7.4 years).
- Sites increased by 3,173 (30%) year-on-year to 13,684 sites (Q1 2022: 10,511 sites), reflecting 654 organic site additions and the acquisition of 2,519 sites in Oman.
- Sites increased by 131 quarter-on-quarter (Q4 2022: 13,553).
- Tenancies increased by 4,887 year-on-year to 25,120 tenants (Q1 2022: 20,233 tenants), reflecting 1,870 organic tenancy additions and 3,017 acquired tenancies in Oman.
- Tenancies increased by 628 quarter-on-quarter (Q4 2022: 24,492), reflecting one of the strongest ever quarters of organic tenancy additions for the Group.
- Tenancy ratio decreased by 0.08x year-on-year to 1.84x (Q1 2022: 1.92x), reflecting the dilutive impact of the acquired assets in Oman (Oman Q1 2023: 1.2x).
- Tenancy ratio expanded 0.03x quarter-on-quarter (Q4 2022: 1.81x).
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 Group published its Annual Report and Financial Statements on 27 March, adopting integrated reporting for the first time to better reflect its approach to sustainable business. A complementary Reporting Supplement was also published, which includes additional ESG information and disclosures against reporting frameworks, such as the Global Reporting Initiative.
2022 outlook and guidance
- The Group’s 2023 guidance remains unchanged from its prior communication and reflects the following expectations for the full year:
- Tenancy additions of 1,600 – 2,100, of which 40% are anticipated to be new sites.
- Adjusted EBITDA of US$350m – US$365m, reflecting year-on-year growth of 24 – 29%.
- Portfolio free cash flow of US$230m – US$245m, reflecting year-on-year growth of 14 – 22%.
- Capital expenditure of 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, 18 May 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 Q1 2023 Results Conference Call
Event Name: Q12023
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: 170045
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 13,600 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, 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 included in the Group’s Half-Year and Annual financial reports.