REG - Helios Towers PLC - Half-year Report
08/08/2024 07:00
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RNS Number : 6326Z Helios Towers PLC 08 August 2024
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.
H1 2024 H1 2023 YoY Q2 2024 Q1 2024 QoQ
Sites 14,185 13,870 +2% 14,185 14,166 +0%
Tenancies 28,574 25,883 +10% 28,574 27,686 +3%
Tenancy ratio 2.01x 1.87x +0.14x 2.01x 1.95x +0.06x
Revenue (US$m) 389.9 350.2 +11% 195.3 194.6 +0%
Adjusted EBITDA (US$m)1 206.2 173.8 +19% 104.0 102.2 +2%
Adjusted EBITDA margin1 53% 50% +3ppt 53% 53% -
Operating profit (US$m) 132.3 69.3 +91% 65.0 67.3 -3%
Portfolio free cash flow (US$m)(1) 142.0 124.5 +14% 72.1 69.9 +3%
Cash generated from operations (US$m) 175.7 147.6 +19% 119.9 55.8 +115%
Net debt (US$m)(1) 1,758.9 1,714.9 +3% 1,758.9 1,812.1 -3%
Net leverage(1,2) 4.2x 4.8x -0.6x 4.2x 4.4x -0.2x
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 guidance(1)
· 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 flow(2)
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
(https://www.investis-live.com/heliostowers/66828dbd4c15820c0008ca8c/fgrhr)
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:
Europe & International +44 203 936 2999
South Africa (local) +27 87 550 8441
USA (local) +1 646 664 1960
Passcode: 650353
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 (http://www.heliostowers.com)
Investor Relations
Chris Baker-Sams - Head of Strategic Finance and Investor Relations
+44 (0)782 511 2288
investorrelations@heliostowers.com
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
6 months ended 30 June
Note 2024 2023
US$m US$m
Revenue 389.9 350.2
Cost of sales (188.9) (218.5)
Gross profit 201.0 131.7
Administrative expenses (68.8) (62.9)
Profit on disposal of property, plant and equipment 0.1 0.5
Operating profit 132.3 69.3
Interest receivable 0.9 0.7
Other gains and (losses) 11 (13.9) 0.9
Finance costs (119.7) (110.3)
Loss before tax 4 (0.4) (39.4)
Tax expense 5 (24.1) (5.0)
Loss for the period (24.5) (44.4)
Other comprehensive income/(expense):
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of foreign operations (53.8) 5.2
Cash flow hedge reserve gain 8.8 -
Total comprehensive loss for the period (69.5) (39.2)
Loss attributable to:
Owners of the Company (20.8) (41.0)
Non-controlling interests (3.7) (3.4)
Loss for the period (24.5) (44.4)
Total comprehensive loss attributable to:
Owners of the Company (66.1) (36.4)
Non-controlling interests (3.4) (2.8)
Total comprehensive loss for the period (69.5) (39.2)
Financial and operating metrics
Key metrics
For the six months ended 30 June
Group Middle East & North Africa(3) East & West Africa(4) Central & Southern Africa(5)
2024 2023 2024 2023 2024 2023 2024 2023
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
Sites at period end 14,185 13,870 2,546 2,519 6,430 6,349 5,209 5,002
Tenancies at period end 28,574 25,883 3,978 3,192 13,366 12,334 11,230 10,357
Tenancy ratio at period end 2.01x 1.87x 1.56x 1.27x 2.08x 1.94x 2.16x 2.07x
Revenue for the period 389.9 350.2 33.8 27.0 159.9 156.1 196.2 167.1
Adjusted gross margin(1) 65% 62% 81% 77% 68% 67% 59% 55%
Adjusted EBITDA for the period(2) 206.2 173.8 24.5 18.0 101.1 95.7 98.4 77.2
Adjusted EBITDA Margin for the period 53% 50% 72% 67% 63% 61% 50% 46%
(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
Group Middle East & North Africa(3) East & West Africa(4) Central & Southern Africa(5)
2024 2023 2024 2023 2024 2023 2024 2023
Standard colocation tenants 11,663 10,401 1,045 623 5,704 5,182 4,914 4,596
Amendment colocation tenants 2,726 1,612 387 50 1,232 803 1,107 759
Total colocation tenants 14,389 12,013 1,432 673 6,936 5,985 6,021 5,355
Total sites 14,185 13,870 2,546 2,519 6,430 6,349 5,209 5,002
Total tenancies 28,574 25,883 3,978 3,192 13,366 12,334 11,230 10,357
Tenancy ratio 2.01x 1.87x 1.56x 1.27x 2.08x 1.94x 2.16x 2.07x
Group Tanzania DRC Congo Brazzaville Ghana
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
Standard colocations 11,663 10,401 5,031 4,570 3,342 3,093 193 191 985 976
Amendment colocations 2,726 1,612 1,101 772 487 334 45 33 436 356
Total colocations 14,389 12,013 6,132 5,342 3,829 3,427 238 224 1,421 1,332
Total sites 14,185 13,870 4,176 4,193 2,593 2,418 549 530 1,097 1,117
Total tenancies 28,574 25,883 10,308 9,535 6,422 5,845 787 754 2,518 2,449
Tenancy ratio 2.01x 1.87x 2.47x 2.27x 2.48x 2.42x 1.43x 1.42x 2.30x 2.19x
South Africa Senegal Madagascar Malawi Oman
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
Standard colocations 247 243 105 94 147 93 568 518 1,045 623
Amendment colocations 103 24 40 3 36 12 91 28 387 50
Total colocations 350 267 145 97 183 105 659 546 1,432 673
Total sites 382 375 1,458 1,386 588 562 796 770 2,546 2,519
Total tenancies 732 642 1,603 1,483 771 667 1,455 1,316 3,978 3,192
Tenancy ratio 1.92x 1.71x 1.10x 1.07x 1.31x 1.19x 1.83x 1.71x 1.56x 1.27x
Revenue
Revenue increased by 11% to US$389.9m in the period ended 30 June 2024 (H1
2023: US$350.2m). The increase was largely driven by the growth in total
tenancies from 25,883 as of 30 June 2023 to 28,574 as of 30 June 2024.
For the period ended 30 June 2024, 98% of revenues were from multinational
MNOs and 67% were denominated in hard currency, being either USD, XAF/XOF
(both of which are pegged to the Euro) or OMR (which is pegged to the US
Dollar).
Contracted revenue
The following table provides our total undiscounted contracted revenue by
country as of 30 June 2024 for each of the periods from 2024 to 2028, with
local currency amounts converted at the applicable average rate for US Dollars
for the period ended 30 June 2024 held constant. Our contracted revenue
calculation for each year presented assumes: (i) no escalation in fee rates,
(ii) no increases in sites or tenancies other than our committed tenancies,
(iii) our customers do not utilise any cancellation allowances set forth in
their MSAs, (iv) our customers do not terminate MSAs early for any reason and
(v) no automatic renewal.
Year ended 31 December
6 months to 2025 2026 2027 2028
31 December 2024
US$m US$m US$m US$m US$m
Middle East & North Africa 31.0 53.6 53.5 53.5 53.5
East & West Africa 147.6 301.1 270.7 257.3 250.8
Central & Southern Africa 187.4 354.5 317.6 283.4 268.0
366.0 709.2 641.8 594.2 572.3
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).
(US$m) Total Committed Revenues Percentage of Total Committed Revenues
Large multinational MNOs 5,457.8 99.6%
Other 24.5 0.4%
5,482.3 100.0%
Cost of sales and adjusted gross profit
6 months ended 30 June
% of Revenue % of Revenue
2024 2023
(US$m) 2024 2023
Power 92.8 23.8% 89.2 25.5%
Non-power 45.2 11.6% 43.9 12.5%
Cost of sales excluding site depreciation 138.0 35.4% 133.1 38.0%
Site depreciation 50.9 13.1% 85.4 24.4%
Total cost of sales 188.9 48.5% 218.5 62.4%
Year-on-year cost of sales decreased by US$29.6m from US$218.5m in the period
ended 30 June 2023 to US$188.9m in the period ended 30 June 2024. This
decrease is largely driven by lower depreciation, following an update to our
tower asset depreciation policy from up to 15 years to up to 30 years. This
follows a structural review of our tower assets using third party consultants
and internal analysis, and also more closely aligns with depreciation policies
of other global tower companies. Refer to Note 2 for further details.
The Group has both annual CPI and quarterly or annual power price escalators
embedded into its customers' contracts, which provides effective protection
from inflation and power price movements on the Group's power and non-power
costs.
The table below shows an analysis of the cost of sales on a region-by-region
basis for the six month period ended 30 June 2024 and 2023.
Group Middle East & North Africa East & West Africa Southern & Central Africa
(US$m) 2024 2023 2024 2023 2024 2023 2024 2023
Power 92.8 89.2 3.6 3.3 32.2 32.2 57.0 53.7
Non-power 45.2 43.9 2.6 2.9 18.2 19.2 24.4 21.8
Site depreciation 50.9 85.4 7.9 7.7 18.0 39.0 25.0 38.7
Total cost of sales 188.9 218.5 14.1 13.9 68.4 90.4 106.4 114.2
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.
6 months ended 30 June
% of % of Revenue
Revenue
(US$m) 2024 2024 2023 2023
Revenue 389.9 100.0% 350.2 100.0%
Cost of sales excluding site depreciation (138.0) 35.4% (133.1) 38.0%
Adjusted gross profit 251.9 64.6% 217.1 62.0%
Site depreciation (50.9) 13.1% (85.4) 24.4%
Gross profit 201.0 51.6% 131.7 37.6%
( )
Administrative expenses
Administrative expenses increased by US$5.9m year-on-year, to US$68.8m from
US$62.9m in the prior year. Year-on-year the administrative cost level as a
percentage of revenue has decreased to 17.6% (H1 2023: 18.0%).
6 months ended 30 June
% of % of Revenue
Revenue
(US$m) 2024 2024 2023 2023
Sales, general and administrative costs (SG&A) 45.7 11.7% 43.3 12.4%
Depreciation and amortisation 17.0 4.4% 15.7 4.5%
Adjusting items 6.1 1.5% 3.9 1.1%
68.8 17.6% 62.9 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$0.9m) was predominately
driven by hyperinflation accounting in Ghana which was first applied in H2
2023, together with a minimal fair value movement in derivative instruments.
6 months ended 30 June
2024 2023
US$m US$m
Net monetary loss on hyperinflation (13.8) -
Fair value gain/(loss) on derivative financial instruments (0.1) 0.9
(13.9) 0.9
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$39.2m in the comparative half year. The increase in other comprehensive
loss is primarily due to exchange differences on long term intercompany loans.
Refer to note 2, updated accounting estimates and judgements for further
detail.
Management cash flow
(US$m) 6 months ended 30 June
2024 2023
Adjusted EBITDA 206.2 173.8
Less:
Maintenance and corporate capital additions (22.6) (18.4)
Payments of lease liabilities1 (26.2) (24.7)
Tax paid (15.4) (6.2)
Portfolio free cash flow 142.0 124.5
Cash conversion %2 69% 72%
Net payment of interest3 (68.3) (60.3)
Net change in working capital4 (23.9) (21.4)
Levered portfolio free cash flow 49.8 42.8
Discretionary capital additions5 (57.7) (74.5)
Cash paid for exceptional and on-off items, and proceeds on disposal assets6 (1.9) (5.5)
Free cash flow (9.8) (37.2)
Net cash flow from financing activities7 50.2 45.7
Net cash inflow 40.4 8.5
Opening cash balance 106.6 119.6
Foreign exchange movement (2.5) (0.4)
Closing cash balance 144.5 127.7
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$147.6m), driven by higher Adjusted EBITDA. The Group has presented a
Condensed consolidated statement of cash flows for the six months ended 30
June 2024 later in the release.
Capital expenditure
The following table shows capital expenditure additions by category during the
6 months ended 30 June:
2024 2023
US$m % of US$m % of
Total Capex Total Capex
Acquisition 5.6 7.0% 8.8 9.5%
Growth 38.2 47.5% 51.6 55.6%
Upgrade 13.8 17.2% 14.1 15.2%
Maintenance 18.6 23.1% 17.5 18.9%
Corporate 4.2 5.2% 0.9 0.8%
80.4 100.0% 92.9 100.0%
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:
6 months ended 30 June
2024 2023
US$m US$m
Adjusted EBITDA 206.2 173.8
Adjustments applied in arriving at Adjusted EBITDA:
Adjusting items:
Deal costs1 (1.2) (2.2)
Share-based payments and long-term incentive plans2 (4.6) (1.0)
Other/Restructuring (0.3) (0.8)
Gain/(loss) on disposals of assets 0.1 0.5
Other gains and (losses) (13.9) 0.9
Depreciation of property, plant and equipment (42.0) (76.1)
Depreciation of right-of-use assets (12.9) (12.7)
Amortisation of intangibles (13.0) (12.2)
Interest receivable 0.9 0.7
Finance costs (119.7) (110.3)
Loss before tax (0.4) (39.4)
(1) Deal costs comprise costs related to potential acquisitions and the
exploration of investment opportunities, which cannot be capitalised. These
comprise employee costs, professional fees, travel costs and set up costs
incurred prior to operating activities commencing.
(2) Share-based payments and long-term incentive plan charges and
associated costs.
6 months ended 30 June
2024 2023
US$m US$m
Adjusted EBITDA 206.2 173.8
Revenue 389.9 350.2
Adjusted EBITDA margin 53% 50%
Adjusted gross profit and adjusted gross margin
Definition - Adjusted gross profit is defined as gross profit, adding back
site depreciation. Adjusted gross margin is defined as adjusted gross profit
divided by revenue.
Purpose - These measures are used to evaluate the underlying level of gross
profitability of the operations of the business, excluding depreciation, which
is the major non-cash measure reflected in cost of sales. The Group believes
that Adjusted gross profit facilitates comparisons of operating performance
from period to period and company to company by eliminating potential
differences caused by the age and booked depreciation on assets. It is also a
proxy for the gross cash generation of its operations.
6 months ended 30 June
2024 2023
US$m US$m
Gross profit 201.0 131.7
Add back: site depreciation 50.9 85.4
Adjusted gross profit 251.9 217.1
Revenue 389.9 350.2
Adjusted gross margin 65% 62%
Portfolio free cash flow
Definition - Portfolio free cash flow is defined as Adjusted EBITDA less
maintenance and corporate capital expenditure, payments of lease liabilities
(including interest and principal repayments of lease liabilities) and tax
paid.
Purpose - This measure is used to evaluate the cash flow generated by the
business operations after expenditure incurred on maintaining capital assets,
including lease liabilities, and taxes. It is a measure of the cash generation
of the tower estate.
6 months ended 30 June
2024 2023
US$m US$m
Adjusted EBITDA 206.2 173.8
Less: Maintenance and corporate capital additions (22.6) (18.4)
Less: Payments of lease liabilities1 (26.2) (24.7)
Less: Tax paid (15.4) (6.2)
Portfolio free cash flow 142.0 124.5
Cash conversion %(2) 69% 72%
(1) Payment of lease liabilities includes interest and
principal repayments of lease liabilities.
(2) Cash conversion % is calculated as portfolio free cash
flow divided by Adjusted EBITDA.
Gross debt, net debt, net leverage and cash & cash equivalents
Definition - Gross debt is calculated as non-current loans, current loans, and
long-term and short-term lease liabilities, in line with the covenant
definition of the Group's senior debt. Net debt is calculated as gross debt
less cash and cash equivalents. Net leverage is calculated as net debt divided
by annualised Adjusted EBITDA.
Purpose - Net debt is a measure of the Group's net indebtedness that provides
an indicator of overall balance sheet strength. It is also a single measure
that can be used to assess both the Group's cash position and its
indebtedness. The use of the term 'net debt' does not necessarily mean that
the cash included in the net debt calculation is available to settle the
liabilities included in this measure. Net leverage is used to show how many
years it would take for a company to pay back its debt if net debt and
Adjusted EBITDA are held constant.
30 June 31 December
2024 2023
US$m US$m
External debt(1) 1,680.0 1,650.3
Lease liabilities 223.4 239.4
Gross debt 1,903.4 1,889.7
Cash and cash equivalents 144.5 106.6
Net debt 1,758.9 1,783.1
Annualised Adjusted EBITDA(2) 416.0 403.0
Net leverage(3) 4.2x 4.4x
(1 ) External debt is presented in line with the balance sheet at amortised
cost. External debt is the total loans owed to commercial banks and
institutional investors, excluding loans due to minority interest holders from
June 2024.
(2 ) Annualised Adjusted EBITDA calculated as per the Senior Notes
definition as the most recent fiscal quarter multiplied by 4. This is not a
forecast of future results.
(3 ) Net leverage is calculated as net debt divided by annualised Adjusted
EBITDA.
Return on invested capital
Definition - Return on invested capital ('ROIC') is defined as annualised
portfolio free cash flow divided by invested capital. Invested capital is
defined as gross property, plant and equipment and gross intangible assets,
less accumulated maintenance and corporate capital expenditure, adjusted for
IFRS 3 accounting adjustments and deferred consideration for future sites.
Purpose - This measure is used to evaluate asset efficiency and the
effectiveness of the Group's capital allocation.
30 June 31 December
2024 2023
US$m US$m
Property, plant and equipment 940.6 918.3
Accumulated depreciation 1,118.2 1,127.5
Accumulated maintenance and corporate capital expenditure (283.0) (260.3)
Intangible assets 519.9 546.4
Accumulated amortisation 102.0 75.6
Accounting adjustments and deferred consideration for future sites (176.1) (180.1)
Total invested capital 2,221.6 2,227.4
Annualised portfolio free cash flow(1) 286.8 268.2
Return on invested capital 12.9% 12.0%
(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
(http://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
6 months ended 30 June
Note 2024 2023
US$m US$m
Revenue 389.9 350.2
Cost of sales (188.9) (218.5)
Gross profit 201.0 131.7
Administrative expenses (68.8) (62.9)
Profit on disposal of property, plant and equipment 0.1 0.5
Operating profit 132.3 69.3
Interest receivable 0.9 0.7
Other gains and (losses) 11 (13.9) 0.9
Finance costs (119.7) (110.3)
Loss before tax 4 (0.4) (39.4)
Tax expense 5 (24.1) (5.0)
Loss for the period (24.5) (44.4)
Other comprehensive income/(expense):
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of foreign operations (53.8) 5.2
Cash flow hedge reserve gain 8.8 -
Total comprehensive loss for the period (69.5) (39.2)
Loss attributable to:
Owners of the Company (20.8) (41.0)
Non-controlling interests (3.7) (3.4)
Loss for the period (24.5) (44.4)
Total comprehensive loss attributable to:
Owners of the Company (66.1) (36.4)
Non-controlling interests (3.4) (2.8)
Total comprehensive loss for the period (69.5) (39.2)
Earnings per share
Basic and diluted loss per share (cents) 15 (2.0) (3.9)
Condensed consolidated statement of financial position (unaudited)
As at 30 June 2024
Notes 30 June 2024 31 December 2023
US$m US$m
Non-current assets
Intangible assets 519.9 546.4
Property, plant and equipment 940.6 918.3
Right-of-use assets 241.7 254.0
Deferred tax asset 10.6 13.6
Derivative financial assets 13.5 6.3
1,726.3 1,738.6
Current assets
Inventories 13.4 12.7
Trade and other receivables 7 347.3 297.2
Prepayments 45.8 42.6
Cash and cash equivalents 144.5 106.6
551.0 459.1
Total assets 2,277.3 2,197.7
Equity
Share capital 13.5 13.5
Share premium 105.6 105.6
Other reserves (92.9) (101.7)
Convertible bond reserves 52.7 52.7
Share based payment reserve 29.0 25.5
Treasury shares (3.7) (1.8)
Translation reserve (67.4) (56.9)
Retained earnings (126.0) (105.2)
Equity attributable to owners (89.2) (68.3)
Non-controlling interest 26.4 29.8
Total equity (62.8) (38.5)
Current liabilities
Trade and other payables 9 352.6 301.7
Short-term lease liabilities 10 31.8 35.5
Loans 8 58.7 37.7
443.1 374.9
Non-current liabilities
Loans 8 1,669.0 1,612.6
Deferred tax liabilities 26.3 25.9
Long-term lease liabilities 10 191.6 203.9
Derivative financial liabilities 5.8 14.6
Minority interest buyout liability 4.3 4.3
1,897.0 1,861.3
Total liabilities 2,340.1 2,236.2
Total equity and liabilities 2,277.3 2,197.7
Condensed consolidated statement of changes in equity (unaudited)
For the 6 months ended 30 June 2024
Share capital Share premium Other reserves Treasury shares Share based payments reserve Convertible bond reserves US$m Translation reserves Accumulated (losses)/ profits Available to the owners of the Company Non-controlling interest Total
US$m US$m US$m US$m US$m US$m US$m US$m US$m equity
US$m
Balance at 1 January 2023 13.5 105.6 (87.0) (1.1) 23.2 52.7 (93.5) (5.1) 8.3 41.0 49.3
Loss for the period - - - - - - - (41.0) (41.0) (3.4) (44.4)
Other comprehensive loss - - - - - - 4.6 - 4.6 0.6 5.2
Total comprehensive (loss)/income for the period - - - - - - 4.6 (41.0) (36.4) (2.8) (39.2)
Transactions with owners; - - - (0.1) 0.3 - - - 0.2 - 0.2
Share based payments
Balance at 30 June 2023 13.5 105.6 (87.0) (1.2) 23.5 52.7 (88.9) (46.1) (27.9) 38.2 10.3
Balance at 1 January 2023 13.5 105.6 (87.0) (1.1) 23.2 52.7 (93.5) (5.1) 8.3 41.0 49.3
Loss for the period - - - - - - - (100.1) (100.1) (11.7) (111.8)
Movement in cashflow hedge - - (14.7) - - - - - (14.7) - (14.7)
Other comprehensive loss - - - - - - (2.3) - (2.3) 0.5 (1.8)
Total comprehensive (loss)/income for the period - - (14.7) - - - (2.3) (100.1) (117.1) (11.2) (128.3)
Transactions with owners;
Share based payments - - - - 1.6 - - - 1.6 - 1.6
Transfer of treasury shares - - - (0.7) 0.7 - - - - - -
Translation of hyperinflationary results - - - - - - 38.9 - 38.9 - 38.9
Balance at 31 December 2023 13.5 105.6 (101.7) (1.8) 25.5 52.7 (56.9) (105.2) (68.3) 29.8 (38.5)
Balance at 1 January 2024 13.5 105.6 (101.7) (1.8) 25.5 52.7 (56.9) (105.2) (68.3) 29.8 (38.5)
Loss for the period - - - - - - - (20.8) (20.8) (3.7) (24.5)
Movement in cashflow hedge - - 8.8 - - - - 8.8 - 8.8
Other comprehensive loss - - - - - - (54.1) - (54.1) 0.3 (53.8)
Total comprehensive (loss)/income for the period - - 8.8 - - - (54.1) (20.8) (66.1) (3.4) (69.5)
Share based payments - - - - 1.6 - - - 1.6 - 1.6
Transfer of treasury shares - - - (1.9) 1.9 - - - - - -
Translation of hyperinflationary results - - - - - - 43.6 - 43.6 - 43.6
Balance at 30 June 2024 13.5 105.6 (92.9) (3.7) 29.0 52.7 (67.4) (126.0) (89.2) 26.4 (62.8)
Condensed consolidated statement of cash flows (unaudited)
For the 6 months ended 30 June 2024
6 months ended 30 June
Note 2024 2023
US$m US$m
Cash flows generated from operating activities
Loss for the period before taxation 4 (0.4) (39.4)
Adjustments for:
Other (gains) and losses 11 13.9 (0.9)
Finance costs 119.7 110.3
Interest receivable (0.9) (0.7)
Share-based payments and long-term incentive plans 4.6 1.0
Depreciation and amortisation 67.9 101.0
Gain on disposal of property, plant and equipment (0.1) (0.5)
Operating cash flows before movement in working capital 204.7 170.8
Movement in working capital:
(Increase) in inventories (1.0) (0.2)
(Increase) in trade and other receivables (53.4) (82.4)
Decrease/(Increase) in prepayments (3.7) (4.3)
Increase in trade and other payables 29.1 63.7
Cash generated from operations 175.7 147.6
Interest paid (80.0) (72.3)
Tax paid 5 (15.4) (6.2)
Net cash generated / (used) in operating activities 80.3 69.1
Cash flows from investing activities
Payments to acquire property, plant and equipment (68.3) (88.6)
Payments to acquire intangible assets (5.2) (2.1)
Proceeds on disposal of property, plant and equipment 0.9 -
Interest received 0.7 0.7
Net cash used in investing activities (71.9) (90.0)
Cash flows from financing activities
Loan drawdowns 869.0 76.2
Loan issue costs (15.7) (0.5)
Repayment of loans (803.1) (30.0)
Repayment of lease liabilities (18.2) (17.3)
Net cash generated in financing activities 32.0 28.4
Net increase in cash and cash equivalents 40.4 7.5
Foreign exchange on translation movement (2.5) 0.6
Cash and cash equivalents at the beginning of period 106.6 119.6
Cash and cash equivalents at end of period 144.5 127.7
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$30m. The Group
accounted for the changes in the useful lives as a change in accounting
estimates, which will be recorded prospectively from 1 January 2024.
The Group has considered various financing options for its group subsidiaries
in the current period and concluded that there are certain inter group loans
which are not expected to be repaid in the foreseeable future. These have
therefore been designated as part of the group's net investment in that
subsidiary and in accordance with IAS 21: "The effect of Changes in Foreign
Exchange Rates" foreign exchange gains and losses incurred on these loans in
the current period have been recognised in "Other Comprehensive Income"
prospectively from 1 January 2024.
3. Segmental reporting
The following segmental information is presented in a consistent format with
management information considered by the CEO of each operating segment, and
the CEO and CFO of the Group, who are considered to be the chief operating
decision makers ('CODMs'). Operating segments are determined based on
geographical location. All operating segments have the same business of
operating and maintaining telecoms towers and renting space on such towers.
Accounting policies are applied consistently for all operating segments. The
segment operating result used by CODMs is Adjusted EBITDA, which is defined in
Note 4.
Group Total Corporate East & West Africa Central & Southern Africa MENA
6 months ended 30 June 2024 US$m Tanzania Other DRC Other Oman
US$m US$m US$m US$m US$m US$m
Revenue 389.9 - 121.5 38.4 144.6 51.6 33.8
Adjusted gross margin1 65% - 73% 55% 57% 65% 81%
Adjusted EBITDA(2) 206.2 (17.8) 84.5 16.6 72.7 25.7 24.5
Adjusted EBITDA margin(3) 53% - 70% 43% 50% 50% 72%
Financing costs:
Interest costs (including leases) (100.8) (4.4) (17.7) (18.6) (26.9) (14.3) (18.9)
Foreign exchange differences (14.0) 40.3 (22.0) (6.7) (0.3) (24.9) (0.4)
Net costs of refinancing (4.9) (4.9) - - - - -
Total financing costs (119.7) 31.0 (39.7) (25.3) (27.2) (39.2) (19.3)
Other segmental information
Non-current assets 1,726.3 12.5 270.7 290.7 390.4 256.3 505.7
Property, plant and equipment additions 69.7 5.7 13.5 8.6 24.2 9.0 8.7
Property, plant and equipment depreciation and amortisation 55.0 3.1 10.1 8.1 17.6 5.6 10.5
( )
Group Total Corporate East & West Africa Central & Southern Africa MENA
6 months ended 30 June 2023 US$m Tanzania Other DRC Other Oman
US$m US$m US$m US$m US$m US$m
Revenue 350.2 - 116.6 39.5 122.2 44.9 27.0
Adjusted gross margin1 62% - 71% 55% 52% 61% 77%
Adjusted EBITDA(2) 173.8 (17.1) 78.2 17.5 57.3 19.9 18.0
Adjusted EBITDA margin(3) 50% - 67% 44% 47% 44% 67%
Financing costs:
Interest costs (including leases) (82.3) 3.6 (19.0) (13.4) (26.7) (9.6) (17.2)
Foreign exchange differences (28.0) 4.6 (4.1) (6.7) 0.4 (22.0) (0.2)
Total financing costs (110.3) 8.2 (23.1) (20.1) (26.3) (31.6) (17.4)
Group Total Corporate East & West Africa Central & Southern Africa MENA
As at 31 December 2023 US$m Tanzania Other DRC Other Oman
US$m US$m US$m US$m US$m US$m
Other segmental information
Non-current assets 1,738.6 12.0 281.9 300.3 383.4 251.6 509.4
Property, plant and equipment additions 178.9 3.0 34.2 24.2 68.1 36.3 13.1
Property, plant and equipment depreciation and amortisation 187.0 7.4 47.8 29.1 51.7 27.8 23.2
(1 )Adjusted gross margin means gross profit, adding back site depreciation,
divided by revenue.
(2) Adjusted EBITDA is loss before tax for the period, 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, recharged depreciation, deal costs for aborted acquisitions, deal
costs not capitalised, share-based payments and long-term incentive plan
charges, and other adjusting items.
(3) Adjusted EBITDA margin is Adjusted EBITDA divided by revenue.
In H1 2024 63% of the Group's revenue was generated from three customers (26%,
22% and 14% respectively), two of whom (26% and 14% of revenue) operated in
both East & West Africa and Central & Southern Africa, with the
remaining customer operating in all three segments.
In H1 2023 60% of the Group's revenue was generated from three customers (28%,
22%, and 10% respectively), two of whom (28% and 10% of revenue) operated in
both East & West Africa and Central & Southern Africa, with the
remaining customer operating in all three segments.
4. Reconciliation of aggregate segment Adjusted EBITDA to loss before tax
The key segment operating result used by chief operating decision makers
(CODMs) is Adjusted EBITDA which is also an Alternative Performance Measure of
the Group as a whole, as described above on page 10.
6 months ended 30 June
2024 2023
US$m US$m
Adjusted EBITDA 206.2 173.8
Adjustments applied in arriving at Adjusted EBITDA:
Adjusting items:
Deal costs1 (1.2) (2.2)
Share-based payments and long-term incentive plans2 (4.6) (1.0)
Other restructuring (0.3) (0.8)
Gain on disposals of assets 0.1 0.5
Other gains and (losses) (13.9) 0.9
Depreciation of property, plant and equipment (42.0) (76.1)
Depreciation of right-of-use assets (12.9) (12.7)
Amortisation of intangibles (13.0) (12.2)
Interest receivable 0.9 0.7
Finance costs (119.7) (110.3)
Loss before tax (0.4) (39.4)
(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.
5. Tax expense
Though the entity in Senegal continues to be loss-making for tax purposes,
minimum income taxes and asset based taxes were levied, as stipulated by law
in these jurisdictions. Malawi, Oman and South Africa are loss making for tax
purposes and no minimum income tax applies. DRC, Ghana, Madagascar, Tanzania,
Congo Brazzaville and two entities in South Africa are profitable for tax
purposes and subject to income tax on taxable profits thereon.
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 condensed 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.
6 months ended 30 June
Tax expense 2024 2023
US$m US$m
Total current tax 21.1 8.5
Deferred tax 3.0 (3.5)
24.1 5.0
6 months ended 30 June
Tax paid 2024 2023
US$m US$m
Income tax 15.4 6.2
15.4 6.2
6. Derivative financial instruments
The amounts recognised in the statement of financial position are as follows:
30 June 31 December 2023
2024 US$m
US$m
Balance brought forward 6.3 2.8
Derivative financial instrument - US$975m 7.000% Senior Notes 2025 (6.3) 3.5
Derivative financial instrument - US$850m 7.500% Senior Notes 2029 13.5 -
Currency forward contracts - -
Balance carried forward 13.5 6.3
In May 2024 the Group repurchased US$975m 7.000% Senior Notes 2025, of which
US$650m was outstanding at time of repurchase, using proceeds from its US$850m
7.500% Senior Notes 2029. Both bonds had put and call options embedded within
the terms of the Senior Notes. The asset associated with the 2025 Notes was
written off when the bonds were repurchased and the fair value of the new
derivative, associated with the 2029 Notes, was recognised as outlined below.
The derivatives at the balance sheet date represent the fair value of the put
and call options embedded within the terms of the 7.500% Senior Notes.
The call options give the Group the right to redeem the Senior Notes
instruments at a date prior to the maturity date (4 June 2029), in certain
circumstances and at a premium over the initial notional amount.
The put option provides the holders with the right (and the Group with an
obligation) to settle the Senior Notes before their redemption date in the
event of a change in control resulting in a rating downgrade (as defined in
the terms of the Senior Notes, which also includes a major asset sale), and at
a premium over the initial notional amount.
The options are fair valued using an option pricing model that is commonly
used by market participants to value such options and makes the maximum use of
market inputs, relying as little as possible on the entity's specific inputs
and making reference to the fair value of similar instruments in the market.
The options are considered a Level 3 financial instrument in the fair value
hierarchy of IFRS 13, owing to the presence of unobservable inputs.
Where Level 1 (market observable) inputs are not available, the Helios Group
engages a third party qualified valuer to perform the valuation. Management
works closely with the qualified external valuer to establish the appropriate
valuation techniques and inputs to the model. The fair value of the embedded
derivative is the difference between the quoted price of the Senior Notes and
the fair value of the host contract (the Senior Notes excluding the embedded
derivative). The fair value of the Senior Notes as at the Valuation Date has
been sourced from an independent third-party data vendor. The fair value of
the host contract is calculated by discounting the Senior Notes' future cash
flows (coupons and principal payment) at USD 3-month LIBOR plus Helios Towers'
credit spread.
As at the reporting date, the call option had a fair value of US$13.5m (31
December 2023: US$6.3m on the US$975m 7.000% Senior Notes 2025), while the put
option had a fair value of US$nil million (31 December 2023: US$nil million).
As at 30 June 2024, the group had derivative financial instruments of US$5.8m
(Dec 2023: US$14.6m) of interest rate swaps which are designated as cash flow
hedges under IFRS 9.
The hedge ratio for each designation will be established by comparing the
quantity of the hedging instrument and the quantity of the hedged item to
determine their relative weighting; for all of the Group's existing hedge
relationships the hedge ratio has been determined as 1:1. The fair values of
the derivative financial instruments are calculated by discounting the future
cash flows to net present values using appropriate market rates and foreign
currency rates prevailing at 31 December. The valuation basis is level 2 of
the fair value hierarchy. This classification comprises items where fair value
is determined from inputs other than quoted prices that are observable for the
asset and liability, either directly or indirectly.
7. Trade and other receivables
30 June 31 December 2023
2024 US$m
US$m
Trade receivables 186.2 145.2
Loss allowance (5.5) (5.4)
180.7 139.8
Contract Assets 124.4 109.1
Sundry receivables 29.6 33.1
VAT & Withholding tax receivable 12.6 15.2
347.3 297.2
The Group measures the loss allowance for trade receivables and trade
receivables from related parties at an amount equal to lifetime expected
credit losses ('ECL'). The expected credit losses on trade receivables are
estimated using a provision matrix by reference to past default experience of
the debtor and an analysis of the debtor's current financial position,
adjusted for factors that are specific to the debtors, general economic
conditions of the industry in which the debtors operate and an assessment of
both the current as well as the forecast direction of conditions at the
reporting date. Loss allowance expense is included within cost of sales in the
condensed consolidated statement of profit or loss.
There has been no change in the estimation techniques or significant
assumptions made during the current reporting period. Interest can be charged
on past due debtors. The normal credit period of services between 30 and 90
days.
The increase in trade receivables during the period of $40.9m is primarily due
to invoicing customers in advance, which is also reflected in the higher
deferred income balance at 30 June 2024 (see note 9).
Debtor days
The Group calculates debtor days as set out in the table below. It considers
its most relevant customer receivables exposure on a given reporting date to
be the amount of receivables due in relation to the revenue that has been
reported up to that date. It therefore defines its net receivables as the
total trade receivables and accrued revenue, less loss allowance and deferred
income that has not yet been settled.
30 June 31 December 2023
2024 US$m
US$m
Trade receivables1 186.2 145.2
Accrued Revenue2 14.4 10.1
Less: Loss allowance (5.5) (5.4)
Less: Deferred income3 (98.3) (56.5)
Net Receivables 96.8 93.4
Revenue 389.9 721.0
Debtor days 45 47
(1 ) Trade receivables, including related parties.
(2) Reported within contract assets.
(3 )Deferred income has been adjusted for nil (2023: nil) in respect
of amounts settled by customers at the balance sheet date.
The decrease in debtor days at 30 June 2024 is primarily due to collections
during the period.
In determining the recoverability of a trade receivable, the Group considers
any change in the credit quality of the trade receivable from the date credit
was initially granted up to the reporting date. The Directors consider that
the carrying amount of trade and other receivables is approximately equal to
their fair value.
At 30 June 2024, US$31.7m (2023: US$21.3m) of services had been provided to
customers which had yet to meet the Group's probability criterion for revenue
recognition under the Group's accounting policies. Revenue for these services
will be recognised in the future as and when all recognition criteria are met.
8. Loans
30 June 31 December 2023
2024 US$m
US$m
Loans & bonds 1,714.1 1,632.3
Bank overdraft 13.6 18.0
Total borrowings 1,727.7 1,650.3
Current 58.7 37.7
Non-current 1,669.0 1,612.6
1,727.7 1,650.3
Loans are classified as financial liabilities and measured at amortised cost.
During the period, the Group raised $850m 7.50% notes due 2029. The proceeds
were used to wholly repay its existing 2025 notes and Senegal Opco facilities,
in addition to partially repaying amounts drawn under its Group term
facilities. The Group recognised US$13.5m in relation to the embedded
derivative within the bond (see note 6).
9. Trade and other payables
30 June 31 December 2023
2024 US$m
US$m
Trade payables 40.7 31.3
Deferred income 98.3 60.6
Deferred consideration 29.0 33.5
Accruals 141.5 148.6
VAT, Withholding and other tax payable 43.1 27.7
352.6 301.7
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The average credit period taken for trade
purchases is 32 days (2023: 23 days). Payable days are calculated as trade
payables and payables to related parties, divided by cost of sales plus
administration expenses less staff costs and depreciation and amortisation. No
interest is charged on trade payables. The Group has financial risk management
policies in place to ensure that all payables are paid within the pre-agreed
credit terms.
Deferred income has increased due to timing of invoices being issued to
customers and also reflects the higher trade receivables balance at 30 June
2024 (see note 7).
The Directors consider the carrying amount of trade payables approximates to
their fair value due to their short-term nature.
10. Lease liabilities
30 June 31 December 2023
2024 US$m
US$m
Short-term lease liabilities
Land 29.4 30.2
Buildings 2.4 4.7
Motor vehicles - 0.6
31.8 35.5
Long-term lease liabilities
Land 181.9 193.1
Buildings 9.7 10.8
191.6 203.9
The below undiscounted cash flows do not include escalations based on CPI or
other indexes which change over time. Renewal options are considered on a case
by case basis with judgements around the lease term being based on
management's contractual rights and their current intentions.
The profile of the outstanding undiscounted contractual payments fall due as
follows:
Within 2-5 years 6-10 years US$m 10+ years US$m Total
1 year US$m US$m
US$m
30 June 2024 41.4 135.5 136.6 341.3 654.8
31 December 2023 44.4 139.8 138.6 350.6 673.4
11. Other gains and (losses)
6 months ended
30 June 2024 30 June
US$m 2023
US$m
Net monetary loss on hyperinflation (13.8) -
Fair value (loss)/gain on derivative financial instruments (0.1) 0.9
(13.9) 0.9
The loss of US$13.9m in H1 2024 was predominately driven by a net monetary
loss on translation of results in hyperinflationary market, following the
application of hyperinflationary accounting from H2 2023.
12. Uncompleted performance obligations
The table below represents undiscounted uncompleted performance obligations at
the end of the reporting period. This is total revenue which is contractually
due to the Group, subject to the performance of the obligation of the Group
related to these revenues.
30 June 2024 31 December 2023
US$m US$m
Total contracted revenue 5,482.3 5,417.2
Contracted revenue
The following table provides our total undiscounted contracted revenue by
country as of 30 June 2024 for each of the periods from 2024 to 2028, with
local currency amounts converted at the applicable average rate for US Dollars
for the period ended 30 June 2024 held constant.
Our contracted revenue calculation for each year presented assumes: (i) no
escalation in fee rates, (ii) no increases in sites or tenancies other than
our committed tenancies, (iii) our customers do not utilise any cancellation
allowances set forth in their MLAs; (iv) our customers do not terminate MLAs
prior their current term; and (v) no automatic renewal. The average remaining
initial life of customer contracts is 7.4 years (H1 2023: 7.1 years).
Year ended 31 December
6 months to 2025 2026 2027 2028
31 December 2024
US$m US$m US$m US$m US$m
Middle East & North Africa 31.0 53.6 53.5 53.5 53.5
East & West Africa 147.6 301.1 270.7 257.3 250.8
Central & Southern Africa 187.4 354.5 317.6 283.4 268.0
366.0 709.2 641.8 594.2 572.3
13. Related party transactions
During the period and comparative period there were no disclosable related
party transactions.
14. Contingent Liabilities
The Group exercises judgement to determine whether to recognise provisions and
make disclosures for contingent liabilities. The following claims are
currently outstanding from tax authorities in the counties in which the Group
operates:
· An asssment from the Tanzania Revenue Authority for corporate
income tax for the financial years ending 2018-2021 inclusive. The outstanding
amount is approximately US$9.2 million.
· A claim arising for the financial years 2018 and 2019 from DRC
tax authorities for an assessment of a number of taxes amounting to US$43.6
million.
· A claim arising for the financial years 2013 to 2016 from DRC tax
authorities for a payment collection notice for environmental taxes amounting
to US$31.7 million.
· A claim from, the Congo Brazzaville tax authorities for
securities income tax, VAT and withholding tax. The outstanding amount is
US$10.2 million.
The Directors are working with their advisers and are in discussion with the
tax authorities to bring the matters to conclusion based on the facts. At this
time, the Directors have identified no present obligations in relation to
these tax audits that would lead to material probable future cash outflows and
therefore no provision has been made for these amounts. The balances above
represent the Group's assessment of the maximum possible exposure for the
years assessed.
Other individually immaterial tax, and regulatory proceedings, claims and
unresolved disputes are pending against Helios Towers in a number of
jurisdictions. The timing of resolution and potential outcome (including any
future financial obligations) of these are uncertain, but not considered
probable and therefore no provision has been recognised in relation to these
matters.
15. Loss per share
Basic loss per share has been calculated by dividing the total loss for the
period by the weighted average number of shares in issue during the period
after adjusting for shares held in employee benefit trusts.
To calculate diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all dilutive
potential shares. Share options granted to employees where the exercise price
is less than the average market price of the Company's ordinary shares during
the year are considered to be dilutive potential shares. Where share options
are exercisable based on performance criteria and those performance criteria
have been met during the period, these options are included in the calculation
of dilutive potential shares. The Directors believe that Adjusted EBITDA per
share is representative of the operations of the business, refer to Note 4.
Earnings per share is based on:
2024
US$m 2023
US$m
Loss after tax for the period attributable to owners of the Company (20.8) (41.0)
Adjusted EBITDA (Note 4) 206.2 173.8
6 months ended 30 June
2023
2024 Number
Number
Weighted average number of ordinary shares used to calculate basic earnings 1,049,580,965 1,048,121,517
per share
Weighted average number of dilutive potential shares 125,691,884 116,179,382
Weighted average number of ordinary shares used to calculate diluted earnings 1,175,272,849 1,164,300,899
per share
Loss per share
6 months ended 30 June
2024 2023
cents cents
Basic (2.0) (3.9)
Diluted (2.0) (3.9)
Adjusted EBITDA per share
6 months ended 30 June
2024 2023
Cents cents
Basic 19.6 16.6
Diluted 17.5 14.9
The calculation of basic and diluted earnings per share is based on the net
loss attributable to equity holders of the Company entity for the period
US$20.8m (H1 2023: US$41.0m). Basic and diluted earnings per share amounts are
calculated by dividing the net loss attributable to equity shareholders of the
Company entity by the weighted average number of shares outstanding during the
year. Dilutive potential shares are anti-dilutive due to the loss after tax
attributable to ordinary shareholders reported.
The calculation of Adjusted EBITDA per share and diluted EBITDA per share are
based on the Adjusted EBITDA earnings for the period of US$206.2m (2023:
US$173.8m). Refer to Note 4 for a reconciliation of Adjusted EBITDA to net
loss before tax.
16. Subsequent events
There were no reportable subsequent events after the balance sheet date.
17. Directors' responsibility statement
The Directors confirm that, to the best of their knowledge this condensed set
of consolidated financial statements which has been prepared in accordance
with IAS 34, gives a true and fair view of the assets, liabilities, financial
position and profit or loss of the issuer, or the undertakings included in the
consolidation as a whole as required by DTR 4.2.4R and that this Interim
Report includes a fair review of the information required by content of the
Interim Management section in the Disclosure Guidance and Transparency Rules
4.2.7R and Disclosure Guidance and Transparency Rules 4.2.8R.
The interim financial statements for the period ended 30 June 2024 have been
authorised for issue on 7 August 2024.
Tom Greenwood Manjit Dhillon
Chief Executive Officer Chief Financial Officer
Certain defined terms and conventions
We have prepared the annual report using a number of conventions, which you
should consider when reading information contained herein as follows. All
references to 'we', 'us', 'our', 'HT Group', 'Helios Towers' our 'Group' and
the 'Group' are references to Helios Towers, plc and its subsidiaries, taken
as a whole.
'2G' means the second-generation cellular telecommunications network
commercially launched on the GSM and CDMA standards.
'3G' means the third-generation cellular telecommunications networks that
allow simultaneous use of voice and data services, and provide high-speed data
access using a range of technologies.
'4G' means the fourth-generation cellular telecommunications networks that
allow simultaneous use of voice and data services, and provide high-speed data
access using a range of technologies (these speeds exceed those available for
3G).
'5G' means the fifth generation cellular telecommunications networks. 5G does
not currently have a publicly agreed upon standard; however, it provides
high-speed data access using a range of technologies that exceed those
available for 4G.
'Adjusted EBITDA' is defined by management as profit/loss before tax for the
period, adjusted for finance costs, other gains and losses, interest
receivable, loss on disposal of property, plant and equipment, amortisation of
intangible assets, depreciation and impairments 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. Adjusting items are
material items that are considered one-off by management by virtue of their
size and/or incidence.
'Adjusted EBITDA margin' means Adjusted EBITDA divided by revenue.
'Adjusted gross margin' means Adjusted Gross Profit divided by revenue.
'Adjusted gross profit' means gross profit adding back site and warehouse
depreciation.
'Airtel' means Airtel Africa.
'amendment revenue' means revenue from amendments to existing site contracts
when tenants add or modify equipment, taking up additional vertical space,
wind load capacity and/or power consumption under an existing site contract.
'anchor tenant' means the primary customer occupying each site.
'Analysys Mason' means Analysys Mason Limited.
'annualised Adjusted EBITDA' means Adjusted EBITDA for the last three months
of the respective period, multiplied by four, adjusted to reflect the
annualised contribution from acquisitions that have closed in the last three
months of the respective period.
'Annualised portfolio free cash flow' means portfolio free cash flow in the
trailing twelve months, adjusted to annualise for the impact of acquisitions
closed during the period.
'average remaining initial life' means the average of the periods through the
expiration of the term under certain agreements, excluding future automatic
renewals.
'APMs' Alternative Performance Measures are measures of financial performance,
financial position or cash flows that are not defined or specified under IFRS
but used by the Directors internally to assess the performance of the Group.
'average grid hours' or 'average grid availability' reflects the estimated
site weighted average of grid availability per day across the Group portfolio
in the reporting year.
'Axian' means Axian Group.
'build-to-suit' (BTS) means sites constructed by our Group on order by a MNO.
'carbon emissions per tenant' is the metric used for our intensity target. The
carbon emissions include Scope 1 and 2 emissions for the markets included in
the target and the average number of tenants is calculated using monthly data.
'colocation' means the sharing of site space by multiple customers or
technologies on the same site, equal to the sum of standard colocation tenants
and amendment colocation tenants.
'colocation tenant' means each additional tenant on a site in addition to the
primary anchor tenant and is classified as either a standard or amendment
colocation tenant.
'committed colocation' means contractual commitments relating to prospective
colocation tenancies with customers.
'Company' means Helios Towers plc.
'Congo Brazzaville' otherwise also known as the Republic of Congo.
'contracted revenue' means total undiscounted revenue as at that date with
local currency amounts converted at the applicable average rate for US Dollars
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 (which include committed
colocations and/or committed anchor tenancies), (iii) our customers do not
utilise any cancellation allowances set forth in their MLAs (iv) our customers
do not terminate MLAs early for any reason and (v) no automatic renewal.
'corporate capital expenditure' primarily relates to furniture, fixtures and
equipment.
'downtime per tower per week' refers to the average amount of time our sites
are not powered across each week within our seven markets that Helios Towers
was operating in across 2022 and 2023.
'Deloitte' means Deloitte LLP.
'DRC' means Democratic Republic of Congo.
'FRS 102' means the Financial Reporting Standard Applicable in the UK and
Republic of Ireland.
'free cash flow' means levered portfolio free cash flow less discretionary
capital additions and cash paid for exceptional and one-off items, and
proceeds on disposal assets.
'Ghana' means the Republic of Ghana.
'GHG' means greenhouse gases.
'gross debt' means non-current loans and current loans and long-term and
short-term lease liabilities.
'gross leverage' means gross debt divided by annualised Adjusted EBITDA.
'gross profit' means revenue after deducting cost of sales.
'growth capex' or 'growth capital expenditure' relates to (i) construction of
build-to-suit sites (ii) installation of colocation tenants and (ii) and
investments in power management solutions.
'Group' means Helios Towers plc and its subsidiaries.
'GSMA' is the industry organisation that represents the interests of mobile
network operators worldwide.
'hard currency Adjusted EBITDA' refers to Adjusted EBITDA that is denominated
in US Dollars, US Dollar pegged, US Dollar linked or Euro pegged.
'hard currency Adjusted EBITDA %' refers to Hard currency Adjusted EBITDA as a
% of Adjusted EBITDA
'Helios Towers Congo Brazzaville' or 'HT Congo Brazzaville' means Helios
Towers Congo Brazzaville SASU.
'Helios Towers DRC' or 'HT DRC' means HT DRC Infraco SARL.
'Helios Towers Ghana' or 'HT Ghana' means HTG Managed Services Limited.
'Helios Towers Oman' or 'HT Oman' means Oman Tech Infrastructure SAOC.
'Helios Towers plc' means the ultimate Company of the Group.
'Helios Towers South Africa' or 'HTSA' means Helios Towers South Africa
Holdings (Pty) Ltd and its subsidiaries.
'Helios Towers Tanzania' or 'HT Tanzania' means HTT Infraco Limited.
'IFRS' means International Financial Reporting Standards as adopted by the
European Union.
'independent tower company' means a tower company that is not affiliated with
or majority owned by a telecommunications operator.
'ISO accreditations' refers to the International Organisation for
Standardisation and its published standards: ISO 9001 (Quality Management),
ISO 14001 (Environmental Management), ISO 45001 (Occupational Health and
Safety), ISO 37001 (Anti-Bribery Management) and ISO 27001 (Information
Security Management).
'IVMS' means in-vehicle monitoring system.
'Lean Six Sigma' is a renowned approach that helps businesses increase
productivity, reduce inefficiencies and improve the quality of output.
'lease-up' means the addition of colocation tenancies to our sites.
'Levered portfolio free cash flow' means portfolio free cash flow less net
payment of interest and net change in working capital.
'Lost Time Injury Frequency Rate' means the number of lost time injuries per
one million person-hours worked (12-month roll)
'LTIP' means Long-Term Incentive Plan.
'Madagascar' means Republic of Madagascar.
'Malawi' means Republic of Malawi.
'maintenance capital expenditure' means capital expenditures for periodic
refurbishments and replacement of parts and equipment to keep existing sites
in service.
'Mauritius' means the Republic of Mauritius.
'MENA' means Middle East and North Africa.
'Middle East' region includes thirteen countries namely Hashemite Kingdom of
Jordan, Kingdom of Bahrain, Kingdom of Saudi Arabia, Republic of Iraq,
Republic of Lebanon, State of Kuwait, Sultanate of Oman, State of Palestine,
State of Qatar, Syrian Arab Republic, The Republic of Yemen, The Islamic
Republic of Iran and The United Arab Emirates.
'MLA' means master lease agreement.
'MNO' means mobile network operator.
'mobile penetration' means the amount of unique mobile phone subscriptions as
a percentage of the total market for active mobile phones.
'MTN' means MTN Group Ltd.
'MTSA' means master tower services agreement.
'near miss' is an event not causing harm but with the potential to cause
injury or ill health.
'NED' means Non-Executive Director.
'net debt' means gross debt less cash and cash equivalents.
'net leverage' means net debt divided by annualised Adjusted EBITDA.
'net receivables' means total trade receivables (including related parties)
and accrued revenue, less deferred income.
'Oman' means Sultanate of Oman.
'Omantel' means Oman Telecommunications Company SAOG.
'Orange' means Orange S.A.
'organic tenancy growth' means the addition of BTS or colocations not as a
result of M&A activities.
'our established markets' refers to Tanzania, DRC, Congo Brazzaville, Ghana
and South Africa.
'our markets' or 'markets in which we operate' refers to Tanzania, DRC, Congo
Brazzaville, Ghana, South Africa, Senegal, Madagascar, Malawi and Oman.
'population coverage' refers to the Company estimated potential population
that falls within the network coverage footprint of our towers, calculated
using WorldPop source data.
'portfolio free cash flow' defined as Adjusted EBITDA less maintenance and
corporate capital additions, payments of lease liabilities (including interest
and principal repayments of lease liabilities) and tax paid.
'PoS' means points of service, which is an MNO's antennae equipment
configuration located on a site to provide signal coverage to subscribers. At
Helios Towers, a standard PoS is equivalent to one tenant on a tower.
'power uptime' reflects the average percentage our sites are powered across
each month, and is a key component of our service offering to customers. For
comparability, figures presented only reflect portfolios that are subject to
power SLAs for both the current and prior reporting period. This includes
Tanzania, DRC, Senegal, Congo Brazzaville, South Africa, Ghana and Madagascar.
'Project 100' refers to our commitment to invest US$100 million between 2022
and 2030 on carbon reduction and carbon innovation.
'road traffic accident frequency rate' means the number of work-related road
traffic accidents per 1 million kilometres driven (12-month roll).
'ROIC' means return on invested capital and is defined as annualised portfolio
free cash flow divided by invested capital.
'rural area' while there is no global standardised definition of rural, we
have defined rural as milieu with population density per square kilometre of
up to 1,000 inhabitants. These include greenfield sites, small villages and
towns with a series of small settlement structures.
'rural coverage' is the population living within the footprint of a site
located in a rural area.
'rural sites' means sites which align to the above definition of 'rural area'.
'Senegal' means the Republic of Senegal.
'SHEQ' means safety, health, environment and quality.
'site acquisition' means a combination of MLAs or MTSAs, which provide the
commercial terms governing the provision of site space, and individual ISA,
which act as an appendix to the relevant MLA or MTSA, and include
site-specific terms for each site.
'site agreement' means the MLA and ISA executed by us with our customers,
which act as an appendix to the relevant MLA and includes certain
site-specific information (for example, location and any grandfathered
equipment).
'SLA' means service-level agreement.
'South Africa' means the Republic of South Africa.
'standard colocation' means tower space under a standard tenancy site contract
rate and configuration with defined limits in terms of the vertical space
occupied, the wind load and power consumption.
'Tanzania' means the United Republic of Tanzania.
'TCFD' means Task Force on Climate-Related Financial Disclosures.
'telecommunications operator' means a company licensed by the government to
provide voice and data communications services.
'tenancy' means a space leased for installation of a base transmission site
and associated antennae.
'tenancy ratio' means the total number of tenancies divided by the total
number of our sites as of a given date and represents the average number of
tenants per site within a portfolio.
'tenant' means an MNO that leases vertical space on the tower and portions of
the land underneath on which it installs its equipment.
'the Trustee' means the trustee(s) of the EBT.
'total colocations' means standard colocations plus amendment colocations as
of a given date.
'total recordable case frequency rate' means the total recordable injuries
that occur per one million hours worked (12-month roll).
'total tenancies' means total anchor, standard and amendment colocation
tenants as of a given date.
'tower contract' means the MLA and individual site agreements executed by us
with our customers, which act as a schedule to the relevant MLA and includes
certain site-specific information (for example, location and equipment).
'towerco' means tower company, a corporation involved primarily in the
business of building, acquiring and operating telecommunications towers that
can accommodate and power the needs of multiple tenants.
'tower sites' means ground-based towers and rooftop towers and installations
constructed and owned by us on property (including a rooftop) that is
generally owned or leased by us.
'UK Corporate Governance Code' or 'the Code' means the UK Corporate Governance
Code published by the Financial Reporting Council and dated July 2018, as
amended from time to time.
'UK GAAP' means the United Kingdom Generally Accepted Accounting Practice.
'upgrade capex' or 'upgrade capital expenditure' comprises structural,
refurbishment and consolidation activities carried out on selected acquired
sites.
'Viettel' means Viettel Tanzania Limited.
'Vodacom' means Vodacom Group Limited.
Disclaimer:
This release does not constitute an offering of securities or otherwise an
invitation or inducement to any person to underwrite, subscribe for or
otherwise acquire or dispose of securities in Helios Towers plc (the
'Company') or any other member of the Helios Towers group (the 'Group'), nor
should it be construed as legal, tax, financial, investment or accounting
advice. This release contains forward-looking statements which are subject to
known and unknown risks and uncertainties because they relate to future
events, many of which are beyond the Group's control. These forward-looking
statements include, without limitation, statements in relation to the
Company's financial outlook and future performance. No assurance can be given
that future results will be achieved; actual events or results may differ
materially as a result of risks and uncertainties facing the Group.
You are cautioned not to rely on the forward-looking statements made in this
release, which speak only as of the date of this announcement. The Company
undertakes no obligation to update or revise any forward-looking statement to
reflect any change in its expectations or any change in events, conditions or
circumstances. Nothing in this release is or should be relied upon as a
warranty, promise or representation, express or implied, as to the future
performance of the Company or the Group or their businesses.
This release also contains non-GAAP financial information which the Directors
believe is valuable in understanding the performance of the Group. However,
non-GAAP information is not uniformly defined by all companies and therefore
it may not be comparable with similarly titled measures disclosed by other
companies, including those in the Group's industry. Although these measures
are important in the assessment and management of the Group's business, they
should not be viewed in isolation or as replacements for, but rather as
complementary to, the comparable GAAP measures.
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