Helios Towers hikes guidance after strong third quarter

Independent telecoms infrastructure company Helios Towers lifted its full-year guidance on Thursday after recording solid growth in the third quarter.

The FTSE 250 company reported revenue for the quarter of $183.5m, representing a 2% increase year-on-year.

Adjusted EBITDA for the same period was ahead 7% at $95.4m, and its adjusted EBITDA margin expanded two percentage points to 52%.

Operating profit for the nine months to September increased significantly, rising 79% year-on-year to $112.6m.

Portfolio free cash flow also saw a substantial increase, rising 36% to $197.1m, with a 9% increase in the third quarter, primarily driven by adjusted EBITDA growth.

Cash generated from operations for the year-to-date increased 48% to $239.7m, but it decreased by 17% for the third quarter to $92.1m, primarily due to working capital fluctuations following substantial customer collections in the comparative quarter.

Net debt for Helios Towers stood at $1.73bn, reflecting a 1% increase, while net leverage decreased by 0.6x for the year-to-date and 0.3x for the third quarter, reaching 4.5x, falling within the company’s medium-term target range of 3.5x to 4.5x.

On the operational front, Helios reported adding 3,152 sites year-on-year, bringing its total to 14,024 sites, driven by organic growth and the acquisition of 2,519 sites in Oman.

Tenancies increased by 5,711 year-on-year to 26,624 tenants, reflecting both organic tenancy additions and the Oman acquisitions, while its tenancy ratio increased to 1.9x in the third quarter.

Looking to the full year, Helios Towers raised its guidance on key metrics based on its strong year-to-date performance.

The company said it expected tenancy additions to reach 2,200 to 2,400, adjusted EBITDA to range between $365m and $370m, portfolio free cash flow to be between $260m and $265m, and capital expenditure to be in the range of $190m to $220m, with an increase reflecting updated tenancy guidance.

Non-discretionary capital expenditure remained unchanged at $40m.

The firm’s contracted revenues of $5.5bn were underpinned by a growing base of contracted revenues featuring CPI and power price protections.

“I am pleased to report another strong quarter of performance, with record year-to-date tenancy additions and accelerating organic adjusted EBITDA growth,” said chief executive officer Tom Greenwood.

“Accordingly, we have further increased our 2023 guidance and are on track to deliver one of our best-ever years of organic growth.

“Alongside the positive operational performance, we also strengthened our balance sheet through reducing net leverage down within our target range, ahead of plan, and opportunistically extended our average debt maturities with a minimal increase in cost of debt.”

At 0817 GMT, shares in Helios Towers were up 7.97% at 66.35p.

Reporting by Josh White for Sharecast.com.