Half-year Report

Unaudited results for the six months ended 30 June 2024

Record year-to-date tenancy additions

+19% year-on-year Adjusted EBITDA growth

2024 guidance tightened upwards

London, 8 August 2024: Helios Towers plc ("Helios Towers","the Group" or "the Company"), the independent telecommunications infrastructure company, today announces results for the six months to 30 June 2024.

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:

"I am delighted to see our strong performance continue across our business, with our team delivering record year-to-date tenancy additions and power uptime for our customers - all leading to strong Adjusted EBITDA growth, cash generation, returns expansion, and continued deleveraging. Accordingly, we have tightened our full-year guidance upwards across a number of key metrics.

Alongside the consistent growth, I am pleased with the improvements to our financial position. Following rating upgrades by Moody's and S&P to B+ equivalent, and Fitch updating their outlook to positive, we executed a successful bond refinancing in May 2024. Through this transaction, we extended our average maturity to five years and kept our blended cost of debt broadly stable despite rising rates over the past few years.

We are progressing well towards our 2026 strategic targets, including tenancy ratio expansion and free cash flow generation, and the team are pleased to deliver consistent performance for our stakeholders despite the broader macro volatility."

Financial highlights

Progressing towards high-end of FY 2024 guidance, driven by tenancy growth, underpinned by a growing base of contracted revenues that feature CPI and power price protections

·     Revenue increased by 11% year-on-year to US$389.9m (H1 2023: US$350.2m) driven by tenancy growth

o  Q2 2024 revenue increased by 0.4% quarter-on-quarter to US$195.3m (Q1 2024: US$194.6m)

·     Adjusted EBITDA increased by 19% year-on-year to US$206.2m (H1 2023: US$173.8m), driven by tenancy growth and margin accretive tenancy ratio expansion

o  Q2 2024 Adjusted EBITDA increased by 2% quarter-on-quarter to US$104.0m (Q1 2024: US$102.2m)

·     Adjusted EBITDA margin increased 3ppt year-on-year to 53% (H1 2023: 50%), driven by +0.14x tenancy ratio expansion

·     Operating profit increased by 91% year-on-year to US$132.3m (H1 2023: US$69.3m), largely driven by Adjusted EBITDA growth and lower depreciation, following an update to our tower asset depreciation policy effective from 1 January 2024

o  The business reduced its loss before tax to US$0.4m (H1 2023: loss before tax of US$39.4m), driven by an increase in operating profit, partially offset by a non-cash monetary loss on hyperinflation accounting in Ghana and higher finance costs

·     Portfolio free cash flow increased by 14% year-on-year to US$142.0m (H1 2023: US$124.5m), driven by Adjusted EBITDA growth, partially offset by timing of corporate taxes paid

o  Q2 2024 portfolio free cash flow increased by 3% quarter-on-quarter to US$72.1m (Q1 2024: US$69.9m), driven by Adjusted EBITDA growth

o  Free cash flow improved to -US$9.8m (H1 2023: -US$37.2m)

·     Cash generated from operations increased by 19% to US$175.7m (H1 2023: US$147.6m), driven by Adjusted EBITDA growth, partially offset by working capital movements

o  Q2 2024 cash generated from operations increased by 115% quarter-on-quarter to US$119.9m (Q1 2024: US$55.8m)

·     Net leverage decreased by 0.6x year-on-year to 4.2x (H1 2023: 4.8x) and by 0.2x quarter-on-quarter (Q1 2024: 4.4x)

·     In Q2 2024, the Group raised US$850m 7.50% notes due 2029. The proceeds were used to repay its existing 2025 notes and Senegal OpCo facilities, in addition to partially repay amounts drawn under its Group Term Loan facilities

o  The refinancing extended the Group's average debt maturity from three years to five years, with only a 10bps increase in its cost of debt, despite a materially higher rate environment

·     Business underpinned by long-term contracted revenues of US$5.5bn (H1 2023: US$4.9bn), of which 99.6% is from large multinational MNOs, with an average remaining initial life of 7.4 years (H1 2023: 7.1 years)

Operational highlights

Structurally high-growth markets, leading market positions and customer service focus supporting strong and consistent tenancy growth

·      Sites increased by 315 year-on-year to 14,185 (H1 2023: 13,870)

o  Increased by 19 quarter-on-quarter

o  Increased by 88 year-to-date

·      Tenancies increased by 2,691 year-on-year to 28,574 (H1 2023: 25,883)

o  Increased by 888 quarter-on-quarter

o  Increased by record 1,649 year-to-date

·      Tenancy ratio increased by 0.14x year-on-year to 2.01x (H1 2023: 1.87x)

o  Increased by 0.06x quarter-on-quarter

o  Increased by 0.10x year-to-date

Environmental, Social and Governance (ESG)

Continued progress against our Sustainable Business Strategy

·     The Group has made continued progress against its 2026 Sustainable Business Strategy targets in H1 2024:

o  149m population coverage footprint (FY 2023: 144m)

o  5,859 rural sites (FY 2023: 5,817)

o  99.99% power uptime (FY 2023: 99.98%)

o  29% female employees (FY 2023: 28%)

o  54% employees trained in Lean Six Sigma (FY 2023: 53%)

o  95% local employees in our operating companies, within our 2026 target of 95%-100% (FY 2023: 96%)

·     The Company continues to be recognised by external rating agencies for its Sustainable Business Strategy and commitment to transparency:

o  ESG score of 'AAA' from MSCI, the highest score from the investment research firm, was reaffirmed

o  Inclusion in the FTSE4Good Index for a third consecutive year

o  B score from CDP was reaffirmed

o  Gold rating from EcoVadis, among the top 5% of telecom companies for sustainability performance

2024 Outlook and guidance¹

·     The Group has tightened upwards its FY 2024 guidance for tenancy additions, Adjusted EBITDA, portfolio free cash flow and capital expenditure:

o  Organic tenancy additions of 1,900 - 2,100 (prior: 1,600 - 2,100)

o  Adjusted EBITDA of US$410m - US$420m (prior: US$405m - US$420m)

o  Portfolio free cash flow of US$280m - US$290m (prior: US$275m - US$290m)

o  Capital expenditure of US$155m - US$190m (prior: US$150m - US$190m)

§ Of which, c.US$45m is anticipated to be non-discretionary capital expenditure

o  Net leverage below 4.0x

o  Neutral free cash flow²

1     Guidance assumes the Group continues to apply the same accounting policies.

2     Excluding the closing of a potential second acquisition (of 227 further sites) in Oman, as previously announced on 8 December 2022.

Helios Towers' management will host a conference call for analysts and institutional investors at 09.30 BST on Thursday, 8 August 2024. 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 2024 Results Conference Call

Event Name: H12024

Password: HELIOS

If you are unable to use the webcast for the event, or if you intend to participate in Q&A during the call, please dial in using the details below:

Upcoming Conferences and Events

·    Barclays Media and Telecom Forum (Virtual) - 3 September 2024

·    dbAccess European TMT Conference (London) - 5 September 2024

·    JP Morgan Emerging Markets Credit Conference (London) - 17 to 19 September 2024

·    BofA European Telecoms Fieldtrip (Virtual) - 23 September 2024

·    RBC Global Communications Infrastructure Conference (Chicago) - 24 to 25 September 2024

For further information go to:

www.heliostowers.com

Investor Relations

Chris Baker-Sams - Head of Strategic Finance and Investor Relations

+44 (0)782 511 2288

[email protected]

Media relations

Edward Bridges / Rob Mindell

FTI Consulting LLP

+44 (0)203 727 1000

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 14,000 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 2023 , published on the Group's website. Reconciliations of APMs to the equivalent statutory measure are also included in this half-year financial report.

Financial and Operating Review

Condensed consolidated statement of profit or loss

For the six months ended 30 June

Financial and operating metrics

Key metrics

For the six months ended 30 June

¹   Adjusted gross margin means gross profit, adding back site depreciation, divided by revenue.

²   Group Adjusted EBITDA for the period includes corporate costs of US$17.8 million (2023: US$17.1m).

³   Middle East & North Africa segment reflects the Company's operations in Oman (for further information on segmental split refer to note 3).

⁴   East & West Africa segment reflects the Company's operations in Tanzania, Senegal and Malawi.

⁵   Central & Southern Africa segment reflects the Company's operations in DRC, Congo Brazzaville, South Africa, Ghana and Madagascar.

Total tenancies as at 30 June

Revenue

Revenue increased by 11% to US$389.9m in the period ended 30 June 2024 (H1 2023: US$350.2m). The increase was largely driven by the growth in total tenancies from 25,883 as of 30 June 2023 to 28,574 as of 30 June 2024.

For the period ended 30 June 2024, 98% of revenues were from multinational MNOs and 67% were denominated in hard currency, being either USD, XAF/XOF (both of which are pegged to the Euro) or OMR (which is pegged to the US Dollar).

Contracted revenue

The following table provides our total undiscounted contracted revenue by country as of 30 June 2024 for each of the periods from 2024 to 2028, with local currency amounts converted at the applicable average rate for US Dollars for the period ended 30 June 2024 held constant. Our contracted revenue calculation for each year presented assumes: (i) no escalation in fee rates, (ii) no increases in sites or tenancies other than our committed tenancies, (iii) our customers do not utilise any cancellation allowances set forth in their MSAs, (iv) our customers do not terminate MSAs early for any reason and (v) no automatic renewal.

The following table provides our total undiscounted contracted revenue as of 30 June 2024 over the life of the contracts with local currency amounts converted at the applicable average rate for US Dollars for the period ended 30 June 2024 held constant. Our calculation uses the same assumptions as above. The average remaining initial life of customer contracts is 7.4 years (H1 2023: 7.1 years).

Cost of sales and adjusted gross profit

Year-on-year cost of sales decreased by US$29.6m from US$218.5m in the period ended 30 June 2023 to US$188.9m in the period ended 30 June 2024. This decrease is largely driven by lower depreciation, following an update to our tower asset depreciation policy from up to 15 years to up to 30 years. This follows a structural review of our tower assets using third party consultants and internal analysis, and also more closely aligns with depreciation policies of other global tower companies. Refer to Note 2 for further details.

The Group has both annual CPI and quarterly or annual power price escalators embedded into its customers' contracts, which provides effective protection from inflation and power price movements on the Group's power and non-power costs.

The table below shows an analysis of the cost of sales on a region-by-region basis for the six month period ended 30 June 2024 and 2023.

Adjusted gross profit for the period increased by 16% driven by tenancy ratio expansion and faster growth in our high-margin markets, such as Oman.

Administrative expenses

Administrative expenses increased by US$5.9m year-on-year, to US$68.8m from US$62.9m in the prior year. Year-on-year the administrative cost level as a percentage of revenue has decreased to 17.6% (H1 2023: 18.0%).

Operating profit

Operating profit increased 91% year-on-year to US$132.3m (H1 2023: US$69.3m) driven by adjusted EBITDA growth, and lower depreciation in cost of sales, following an update to tower asset depreciation policy from up to 15 years to up to 30 years.

Other gains and losses

The loss of US$13.9m in H1 2024 (H1 2023: gain of US$0.9m) was predominately driven by hyperinflation accounting in Ghana which was first applied in H2 2023, together with a minimal fair value movement in derivative instruments.

Finance costs

Finance costs have increased 9% year-on-year to US$119.7m for the period ended 30 June 2024 (30 June 2023: US$110.3m) due to an increase in interest costs partially offset by a decrease in foreign exchange differences. Refer to note 3 for further detail.

Tax expense

Tax expense was US$24.1million in the period ended 30 June 2024 as compared to US$5.0 million in the period ended 30 June 2023. The overall increase in tax expense during the period compared to the prior year is driven by an increase in tax profitability, primarily in Tanzania and DRC and the utilisation of previously recognised tax losses. Entities in Congo Brazzaville and Senegal are loss making, however minimum income tax is levied as stipulated by law in these jurisdictions. Malawi and Oman are loss making for tax purposes and no minimum income tax applies. DRC, Ghana, Madagascar, Tanzania, one entity in Mauritius and two entities in South Africa are profit making and subject to income tax on taxable profits.

The tax expense for the period is calculated by reference to the forecast full year tax rate and applied to profits for the period, adjusted for actual tax on adjusting items. The range of statutory income tax rates applicable to the Group's operating subsidiaries is between 15% and 30%. A tax charge is reported in the consolidated financial statements despite a consolidated loss for accounting purposes, as a result of losses recorded in Mauritius and UK which are not able to be group relieved against taxable profits in the operating company jurisdictions.

Based on recent experience of closing tax audit cases, the provisions held by the Group have accurately quantified the final amounts determined. The Directors considered the current provisions held by the Group to be appropriate.

Loss after tax

The loss after tax for the half year was US$24.5m compared to US$44.4m in the comparative half year. The decrease in loss after tax is due to an increase in operating profit, partially offset by an increase in finance costs and other losses, due to hyperinflation adjustments and higher tax charge in the current year.   

Other Comprehensive income
The other comprehensive loss for the half year was US$69.5m compared to US$39.2m in the comparative half year. The increase in other comprehensive loss is primarily due to exchange differences on long term intercompany loans. Refer to note 2, updated accounting estimates and judgements for further detail.

Management cash flow

1          Payment of lease liabilities includes interest and principal repayments of lease liabilities.

2          Cash conversion % is calculated as portfolio free cash flow divided by Adjusted EBITDA.

3          Net payment of interest corresponds to the net of 'Interest paid' (including withholding tax) and 'Interest received' in the Consolidated Statement of cash flow, excluding interest payments on lease liabilities.

4          Net change in working capital corresponds to movements in working capital, excluding cash paid for adjusting and EBITDA adjusting items and including movements in capital expenditure related working capital.

5          Discretionary capital additions includes acquisition, growth and upgrade capital additions and excludes IFRS 3 accounting adjustments.

6          Cash paid for exceptional and one-off items includes project costs and deal costs.

7          Net cash flow from financing activities includes gross proceeds from issue of equity share capital, share issue costs, borrowing drawdowns, loan issue costs and repayment of loans in the condensed consolidated statement of cash flows.

Cash flows from operations

Cash generated from operations increased by US$28.1m to US$175.7m (H1 2023: US$147.6m), driven by higher Adjusted EBITDA. The Group has presented a Condensed consolidated statement of cash flows for the six months ended 30 June 2024 later in the release.

Capital expenditure

The following table shows capital expenditure additions by category during the 6 months ended 30 June:

Trade and other receivables

Trade and other receivables increased by US$50.1m from US$297.2m as at 31 December 2023 to US$347.3m as at 30 June 2024. This increase was predominately driven by an increase in net trade receivables of US$40.9m.

Trade and other payables

Trade and other payables have increased by US$50.9m from US$301.7m as at 31 December 2023 to US$352.6m as at June 2024. This was primarily driven by an increase in deferred income of US$37.7m due to timing of invoices being issued to customers.

Loans and borrowings

As of 30 June 2024 and 31 December 2023 the Group's outstanding loans net of issue costs, including minority debt and excluding lease liabilities, were US$1,727.7m and US$1,650.3m respectively with net leverage decreasing to 4.2x in June 2024 from 4.4x in December 2023.

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. Some of these measures are also used for the purposes of setting remuneration targets.

Adjusted EBITDA and Adjusted EBITDA margin

Definition - Management defines Adjusted EBITDA as loss before tax for the year, adjusted for finance costs, other gains and losses, interest receivable, loss on disposal of property, plant and equipment, amortisation of intangible assets, depreciation and impairment of property, plant and equipment, depreciation of right-of-use assets, deal costs for aborted acquisitions, deal costs not capitalised, share-based payments and long-term incentive plan charges, and other adjusting items. Other adjusting items are material items that are considered one-off by management by virtue of their size and/or incidence. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by revenue.

Purpose - The Group believes that Adjusted EBITDA and Adjusted EBITDA margin facilitate comparisons of operating performance from period to period and company to company by eliminating potential differences caused by variations in capital structures (affecting interest and finance charges), tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age and booked depreciation on assets. The Group excludes certain items from Adjusted EBITDA, such as loss on disposal of property, plant and equipment and other adjusting items because it believes they facilitate better understanding of the Group's underlying trading performance.

Adjusted EBITDA is reconciled to loss before tax as follows:

¹    Deal costs comprise costs related to potential acquisitions and the exploration of investment opportunities, which cannot be capitalised. These comprise employee costs, professional fees, travel costs and set up costs incurred prior to operating activities commencing.

²    Share-based payments and long-term incentive plan charges and associated costs.

Adjusted gross profit and adjusted gross margin

Definition - Adjusted gross profit is defined as gross profit, adding back site depreciation. Adjusted gross margin is defined as adjusted gross profit divided by revenue.

Purpose - These measures are used to evaluate the underlying level of gross profitability of the operations of the business, excluding depreciation, which is the major non-cash measure reflected in cost of sales. The Group believes that Adjusted gross profit facilitates comparisons of operating performance from period to period and company to company by eliminating potential differences caused by the age and booked depreciation on assets. It is also a proxy for the gross cash generation of its operations.

Portfolio free cash flow

Definition - Portfolio free cash flow is defined as Adjusted EBITDA less maintenance and corporate capital expenditure, payments of lease liabilities (including interest and principal repayments of lease liabilities) and tax paid. 

Purpose - This measure is used to evaluate the cash flow generated by the business operations after expenditure incurred on maintaining capital assets, including lease liabilities, and taxes. It is a measure of the cash generation of the tower estate.

¹         Payment of lease liabilities includes interest and principal repayments of lease liabilities.

²         Cash conversion % is calculated as portfolio free cash flow divided by Adjusted EBITDA.

Gross debt, net debt, net leverage and cash & cash equivalents

Definition - Gross debt is calculated as non-current loans, current loans, and long-term and short-term lease liabilities, in line with the covenant definition of the Group's senior debt. Net debt is calculated as gross debt less cash and cash equivalents. Net leverage is calculated as net debt divided by annualised Adjusted EBITDA.

Purpose - Net debt is a measure of the Group's net indebtedness that provides an indicator of overall balance sheet strength. It is also a single measure that can be used to assess both the Group's cash position and its indebtedness. The use of the term 'net debt' does not necessarily mean that the cash included in the net debt calculation is available to settle the liabilities included in this measure. Net leverage is used to show how many years it would take for a company to pay back its debt if net debt and Adjusted EBITDA are held constant.

¹   External debt is presented in line with the balance sheet at amortised cost. External debt is the total loans owed to commercial banks and institutional investors, excluding loans due to minority interest holders from June 2024. 

²   Annualised Adjusted EBITDA calculated as per the Senior Notes definition as the most recent fiscal quarter multiplied by 4. This is not a forecast of future results.

³   Net leverage is calculated as net debt divided by annualised Adjusted EBITDA.

Return on invested capital

Definition - Return on invested capital ('ROIC') is defined as annualised portfolio free cash flow divided by invested capital. Invested capital is defined as gross property, plant and equipment and gross intangible assets, less accumulated maintenance and corporate capital expenditure, adjusted for IFRS 3 accounting adjustments and deferred consideration for future sites.

Purpose - This measure is used to evaluate asset efficiency and the effectiveness of the Group's capital allocation.

¹   Annualised portfolio free cash flow is calculated as portfolio free cash flow for the last twelve months.

Risk management

The risk management and governance process has not changed since the 2023 Annual report was published and is set out on pages 51 to 56 of the 2023 Annual report (available on the Group's website at www.heliostowers.com) and summarised as follows.

The creation and maintenance of the Group risk register involves the whole business with operating company and functional head input being consolidated by Group Compliance into a register for discussion and agreement at Executive level prior to submission to the Audit Committee and the Board. The risk register is updated twice a year after these discussions and a review of the external environment for any emerging risks.

All risks are classified into six broad risk types: Strategic, Reputational, Compliance (including legal), Finance, Operational and People. All risks are assessed according to the probability and consequence of being realised and a determination made to accept, avoid, or control and mitigate, in which case mitigating controls are clearly defined. A risk owner for all risks is identified.

During bi-annual discussions with Executive Management and functional heads of department, potential emerging risks are also discussed. These may result from internal developments, changes in organisational structure/personnel, potential new products or markets being considered or changes in the external environment such as regulatory changes, socio-economic, political or health and safety matters.

Emerging risks related to sustainability, climate change, evolving legal requirements concerning modern slavery and human rights abuses have been identified as part of the risk management process and continue to be monitored.

Principal risks and uncertainties

There has been no change in the nature, probability or potential impact of previously identified risks as set out on pages 51 to 56 of the 2023 Annual report (available on the Group's website at www.heliostowers.com). The risks are summarised as follows:

- Major quality failure or breach of contract

- Non-compliance with various laws and regulations

- Economic and political instability

- Significant exchange rate movements

- Non-compliance with licence requirements

- Loss of key personnel

- Technology risk

- Failure to remain competitive

- Failure to integrate new lines of business in new markets

- Tax disputes

- Operational resilience

- Pandemic risk

- Cyber security risk

- Climate change

Control environment

The effectiveness of the Group's system of internal control is regularly reviewed by the Board with specific consideration given to material financial, operational and sustainable risks and controls, with appropriate steps taken to address any issues identified.

Going concern

The Directors also considered it appropriate to prepare the condensed consolidated financial statements on a going concern basis, as explained in Note 1.

INDEPENDENT REVIEW REPORT TO HELIOS TOWERS PLC

Conclusion

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2024 which comprises the condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of financial position, condensed consolidated statement of changes in equity, condensed consolidated statement of cash flows and related notes 1 to 17.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 2024 is not prepared, in all material respects, in accordance with United Kingdom adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for Conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with United Kingdom adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with United Kingdom adopted International Accounting Standard 34, "Interim Financial Reporting".

Conclusion Relating to Going Concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed.

This Conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410; however future events or conditions may cause the entity to cease to continue as a going concern.

Responsibilities of the directors

The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the review of the financial information

In reviewing the half-yearly financial report, we are responsible for expressing to the company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our Conclusion, including our Conclusion Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

This report is made solely to the company in accordance with ISRE (UK) 2410. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Deloitte LLP

Statutory Auditor

London, United Kingdom

7 August 2024

Condensed consolidated statement of profit or loss and other comprehensive income (unaudited)

For the 6 months ended 30 June 2024

Earnings per share

Condensed consolidated statement of financial position (unaudited)

As at 30 June 2024

Condensed consolidated statement of changes in equity (unaudited)

For the 6 months ended 30 June 2024

Condensed consolidated statement of cash flows (unaudited)

For the 6 months ended 30 June 2024

Notes to the condensed consolidated financial statements (unaudited)

For the 6 months ended 30 June 2024

1. General Information

Helios Towers plc is an independent tower company, with operations across nine countries. Helios Towers plc is a public limited company incorporated and domiciled in the UK.

Going concern

The Directors believe that the Group is well placed to manage its business risks successfully, despite the current uncertain economic outlook in the wider economy. The Group's forecasts and projections, taking account of possible changes in trading performance, show that the Group should remain adequately liquid and should operate within the covenant levels of its current debt facilities.

As part of their regular assessment of the Group's working capital and financing position, the Directors have prepared a detailed trading and cash flow forecast for a period which covers at least 12 months after the date of approval of the condensed Financial Statements, together with sensitivities and a 'reasonable worst case' stress scenario. In assessing the forecasts, the Directors have considered:

·      trading and operating risks presented by the conditions in the operating markets;

·      the impact of macroeconomic factors, particularly inflation, interest rates and foreign exchange rates;

·      climate change risks and initiatives, including the Group's Project 100 initiative;

·      the availability of the Group's funding arrangements, including loan covenants and nonreliance on facilities with covenant restrictions in more extreme downside scenarios;

·      the status of the Group's financial arrangements;

·      progress made in developing and implementing cost reduction programmes, climate change considerations and initiatives and operational improvements; and - mitigating actions available should business activities fall behind current expectations, including the deferral of discretionary overheads and other expenditures.

In particular for the current period, the Directors have considered the continuing impact of rising energy prices, the broader inflationary environment on the Group's operations and the refinancing of the Group's bond debt. Based on the foregoing considerations, the Directors continue to consider it appropriate to adopt the going concern basis of accounting in preparing the condensed Financial Statements.

2. Accounting Policies

Basis of preparation

The annual financial statements of Helios Towers plc will be prepared in accordance with United Kingdom adopted International Accounting Standards. The condensed set of financial statements included in this half‑yearly financial report has been prepared in accordance with United Kingdom adopted International Accounting Standard 34 'Interim Financial Reporting'.

Accounting policies are consistent with those adopted in the last statutory financial statements of Helios Towers plc and the audit opinion was unmodified. The information as of 31 December 2023  has been extracted from the audited financial statements of Helios Towers plc for the year ended 31 December 2023 . These consolidated financial statements do not constitute statutory financial statements under the Companies Act 2006. The interim financial information for the six months ended 30 June 2024 has been reviewed by the auditor, but not audited. The information for the year ended 31 December 2023 shown in this report does not constitute statutory accounts for that year as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor has reported on those accounts. Their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The interim financial information for the six months ended 30 June 2024, which has been approved by the Board of Directors, has been prepared on the basis of the accounting policies set out in the Group's 2023 Annual Report on pages 136 to 143. The Group's 2023 Annual Report can be found on the Group's website www.heliostowers.com. These Condensed Interim Financial Statements should be read in conjunction with the 2023 information. These Condensed Interim Financial Statements do not comprise statutory accounts within the meaning of section 435 of the Companies Act 2006 and should be read in conjunction with the Annual Report 2023. These Condensed Interim Financial Statements have been prepared in accordance with IAS 34: "Interim Financial Reporting" contained in UK-adopted IFRS. There is no significant seasonality impact in the business.

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.

Updated accounting estimates and judgements

Following a detailed technical review of our tower and site assets, the useful economic life of certain tower assets has been increased from "up to 15 years" to "up to 30 years" from the initial build date. If this estimate had been applied in the six months to 30 June 2023 it would have resulted in a reduction of our depreciation charge of approximately US$30m. The Group accounted for the changes in the useful lives as a change in accounting estimates, which will be recorded prospectively from 1 January 2024.

The Group has considered various financing options for its group subsidiaries in the current period and concluded that there are certain inter group loans which are not expected to be repaid in the foreseeable future. These have therefore been designated as part of the group's net investment in that subsidiary and in accordance with IAS 21: "The effect of Changes in Foreign Exchange Rates" foreign exchange gains and losses incurred on these loans in the current period have been recognised in "Other Comprehensive Income" prospectively from 1 January 2024.

3. Segmental reporting

The following segmental information is presented in a consistent format with management information considered by the CEO of each operating segment, and the CEO and CFO of the Group, who are considered to be the chief operating decision makers ('CODMs'). Operating segments are determined based on geographical location. All operating segments have the same business of operating and maintaining telecoms towers and renting space on such towers. Accounting policies are applied consistently for all operating segments. The segment operating result used by CODMs is Adjusted EBITDA, which is defined in Note 4.