Helios Towers maintains guidance after strong first quarter

The FTSE 250 company said revenue was up 23% year-on-year for the three months ended 31 March to $127.5m (£101.77m), as adjusted EBITDA rose 20% to $66.7m.

Its adjusted EBITDA margin was down two percentage points, however to 52%, and its operating profit slid 16% to $14.4m as a result of higher depreciation from acquired assets, partially offset by adjusted EBITDA growth.

Portfolio free cash flow increased 34% to $49.4m, which Helios said was driven by the increase in adjusted EBITDA, lower maintenance and corporate capital additions and lower tax payments, partially offset by higher lease payments due to a higher site count.

The number of sites on Helios’ books had expanded 43% year-on-year to 10,511, while its total tenancies grew 29% to 20,233.

Cash generated from operations increased 76% year-on-year to $52.7m due to the higher adjusted EBITDA and working capital movements.

Net leverage of 3.7x was up from 3.0x a year earlier, but remained at the low end of the group's medium-term target range of 3.5x to 4.5x.

Helios said its business was underpinned by long-term contracted revenues of $4.2b, up from $2.8bn in the first quarter of last year, of which 99% was from multinational mobile network operators, with an average remaining life of 7.4 years rising from 6.6 years year-on-year.

Helios Towers said it was tracking in-line with its full-year outlook, reiterating guidance of between 1,200 and 1,700 organic tenancy additions, of which 60% were expected to be new sites.

It was anticipating its lease rate per tenant to increase between 3% and 5%, while its adjusted EBITDA margin was set to be 51% to 53%, down from 53.6% year-on-year.

The company said that decrease would be driven by the impact of new acquisitions and the corporate investment required to expand its operations from five to 10 markets.

It said the acquisition of Airtel Africa's passive infrastructure company in Malawi, which closed at the end of March, would deliver adjusted EBITDA of about $6m for its nine months of operation in the 2022 period.

“We have seen strong growth this quarter with revenue up 23% year-on-year, driven by continued organic demand in our established markets in addition to the contributions from our three new markets of Senegal, Madagascar and Malawi,” said chief executive officer Tom Greenwood.

“Our recent platform expansion is progressing well, as we become the most diversified towerco in the region with the doubling of our sites and markets.

“We have many exciting years ahead as we move to a new phase of our journey and launch our five-year sustainable business strategy - focused on driving growth, impact, margins and returns.”

At 0912 BST, shares in Helios Towers were up 2.82% at 113.2p.