03 April 2024
Helios Towers anticipates the financial year (FY) 2024 to be the tipping point for free cash flow, and to continue growing beyond that.
The company believes that tenancy ratio expansion will accelerate beyond its previous medium-term estimate.
“As such, we have adjusted our strategic target of ‘22,000 towers by 2026’, which included meaningful inorganic site growth, to ‘2.2x tenancy ratio by 2026’, prioritising organic growth and returns expansion,” said Tom Greenwood, CEO, Helios Towers. “Consequently, we expect FY 2024 to be our inflection year for free cash flow, and continue to grow thereafter. We have built a compelling and unique platform in some of the world’s fastest growing mobile markets and through our focus on customer service excellence, are well placed to capture the structural growth and deliver sustainable value for our stakeholders.”
FY 2023 revenue increased by 29% year-on-year to $721.0 million, driven by organic tenancy growth, complemented by acquisitions in Malawi and Oman. Operating profit increased by 82% year-on-year to $146.1 million, driven by adjusted EBITDA growth, while loss before tax improved to $112.2 million, primarily driven by a $65.8 million year-on-year increase in operating profit.
“Higher finance costs reflect the non-cash impact of foreign exchange movements on the group’s intercompany borrowings and the full year impact of increased debt, largely related to the Oman acquisition, which closed in December 2022,” said Greenwood.
During the year, Helios’ portfolio free cash flow increased by 33% year-on-year to $268.2 million. This was driven by adjusted EBITDA growth and proportionately lower increases in payments of lease liabilities and taxes paid.
“FY 2023 portfolio free cash flow exceeded updated guidance of $260-265 million, due to the timing of non-discretionary capex,” said Greenwood. “The Group’s capital allocation policy is focused on growing portfolio free cash flow while consistently delivering return on invested capital above its cost of capital.”
