London, 18 August 2022: Helios Towers plc (“Helios Towers”,“the Group” or “the Company”), the independent telecommunications infrastructure company, today announces results for the 6 months to 30 June 2022.

TOM GREENWOOD, CHIEF EXECUTIVE OFFICER, SAID:

“We have delivered strong organic tenancy growth in the first half of the year, which combined with the successful integration of acquired assets in Senegal, Madagascar and Malawi has resulted in impressive year-on-year financial performance. Despite broader global macroeconomic uncertainty, our uniquely positioned platform, highly visible base of quality earnings and unparalleled structural growth continues to drive sustainable value creation for all of our stakeholders.”

Financial highlights

• H1 2022 revenue increased by 25% year-on-year to US$265.4m (H1 2021: US$212.4m) driven by acquisitions in Senegal, Madagascar and Malawi and strong organic tenancy growth across the Group, in addition to CPI and power price escalations. Excluding acquisitions, revenue increased 12% year-on-year.
  • Q2 2022 revenue increased by 8% quarter-on-quarter to US$137.9m (Q1 2022: US$127.5m).
• H1 2022 Adjusted EBITDA increased by 19% year-on-year to US$136.1m (H1 2021: US$114.2m), driven by revenue growth, with H1 2022 Adjusted EBITDA margin decreasing 3ppt year-on-year to 51% (H1 2021: 54%), reflecting the previously communicated SG&A investment to support the Group’s ongoing expansion into ten markets and higher fuel costs in DRC in Q2 2022.
  • Q2 2022 Adjusted EBITDA increased by 4% quarter-on-quarter to US$69.4m (Q1 2022: US$66.7m), with Q2 2022 Adjusted EBITDA margin at 50% (Q1 2022: 52%).
• Operating profit increased 48% year-on-year to US$39.8m (H1 2021: US$26.9m) driven by strong revenue growth, partially offset by a modest increase in administrative expenses as part of the Group’s ongoing expansion.
  • Loss before tax increased to US$122.2m (H1 2021 US$43.6m), driven by a US$83.8m year-on-year increase in non-cash expenses related to both the fair value movements of the embedded derivatives in the Group's bond and foreign exchange movements on Euro and US dollar denominated intercompany borrowings.
• Portfolio free cash flow increased by 36% year-on-year to US$100.4m (H1 2021: US$73.8m), driven by Adjusted EBITDA growth and timing of non-discretionary capital expenditure.
• Cash generated from operations increased 99% to US$91.0m driven by higher Adjusted EBITDA and movements in working capital.
• Net leverage increased by +0.7x year-on-year to 3.9x (H1 2021: 3.2x), primarily due to acquisitions in Madagascar and Malawi, and quarter-on-quarter by 0.2x (Q1 2022: 3.7x), remaining comfortably within the Group's medium-term target range of 3.5x - 4.5x.
  • Strong balance sheet with 96% of drawn debt at a fixed rate, no near-term maturities and fully-funded for announced transactions.
• Business underpinned by long-term contracted revenues of US$4.2bn (H1 2021: US$3.5bn), of which 99% is from large multinational MNOs, with an average remaining life of 7.2 years (H1 2021: 7.4 years).
  • Pro forma for announced transactions in Oman and Gabon, the Group has contracted revenues of US$5.3 billion.
  • CPI and power price escalators embedded into customer contracts provides an effective hedge against inflation and fuel price movements over a full-year cycle.

Operational highlights

• Sites increased by 2,091 year-on-year to 10,694 sites (H1 2021: 8,603 sites), reflecting 1,213 acquired sites in Malawi and Madagascar and 878 organic site additions.
  • Sites increased organically by 183 quarter-on-quarter (Q1 2022: 10,511).
• Tenancies increased by 3,459 year-on-year to 20,549 tenants (H1 2021: 17,090 tenants), reflecting 1,692 acquired tenancies in Malawi and Madagascar and 1,767 organic tenancy additions.
  • Tenancies increased organically by 316 quarter-on-quarter (Q1 2022: 20,233).
• Tenancy ratio decreased 0.07x year-on-year to 1.92x (H1 2021: 1.99x), reflecting the dilutive impact of acquired assets in Madagascar (1.20x) and Malawi (1.58x).

Environmental, Social and Governance (ESG)

• Helios Towers has been awarded a ‘AAA’ ESG score from MSCI, the highest score from the investment research firm, in addition to being included in the FTSE4Good Index, a series designed to measure the performance of companies demonstrating strong ESG practices. This further highlights Helios Towers’ commitment to sustainable business and its purpose of driving the growth of mobile communications in Africa and the Middle East.

Strategic Updates

• The Group continues to progress with the closings of passive infrastructure assets in Oman and the potential acquisition of Airtel Africa’s tower assets in Gabon, with the expected timings and updates outlined below:
  • Oman: Subject to completing the remaining customary closing conditions including obtaining regulatory approval, the Group anticipates the acquisition of Oman Telecommunications Company (“Omantel”) to close in H2 2022.
    • On 7 June 2022, Helios Towers announced it had entered into an agreement pursuant to which Rakiza Telecommunications Infrastructure LLC (“Rakiza”) will purchase a 30% minority stake in the purchase of Omantel Telecommunications Company (S.A.O.G)’s (“Omantel”) passive infrastructure assets in Oman, with Helios Towers purchasing the remaining 70%.
    • Partnership combines Helios Towers’ proven operational expertise with a local partner that has extensive local market knowledge.
  • Gabon: As previously announced, Helios Towers and Airtel Africa have extended the memorandum of understanding arrangement. Subject to obtaining a passive infrastructure licence, the acquisition of tower assets in Gabon is expected to close in H2 2022.

2022 outlook and guidance

• Following strong operational and financial performance in H1 2022, the Group has reiterated its FY 2022 guidance of:
  • 1,200 – 1,700 organic tenancy additions, of which 60% are expected to be new sites.
  • Lease rate per tenant to increase in the range of 3% - 5% from FY 2021 (2021: US$26.4k per tenant).
  • Adjusted EBITDA margin of 51% - 53% (FY 2021: 53.6%), with the YoY decrease driven by the impact of new acquisitions and corporate SG&A investment required for the expansion of the Group’s operations to ten markets.
• The acquisition of Airtel Africa’s passive infrastructure company in Malawi, closed at the end of March, is anticipated to deliver Adjusted EBITDA of approximately US$6m for its nine months of operation in FY 2022.
• The Group continues to target capex of US$810m – US$850m in FY 2022.
  • As previously guided, excluding acquisitions the Group anticipates US$160m - US$200m of capex, of which, US$27m - US$32m is non-discretionary capex.
  • The Group anticipates acquisition capex of approximately US$650m in 2022, reflecting the acquisitions in Oman and Malawi, and deferred acquisition payments in Senegal and Madagascar.