Helios Towers’ Earnings Call Highlights Robust Growth

Helios Towers Plc ((GB:HTWS)) has held its Q1 earnings call. Read on for the main highlights of the call.

Helios Towers Plc’s recent earnings call showcased a positive sentiment, highlighting significant achievements in EBITDA growth, free cash flow generation, and strategic progress in tenancy growth. Despite facing challenges such as power price impacts on revenue and the need for increased site additions, the company’s performance and future prospects appear robust.

Consistent EBITDA Growth

Helios Towers has demonstrated remarkable resilience with 10 consecutive years of EBITDA growth, achieving a compound annual growth rate (CAGR) of 26% since 2015. This consistent growth has been maintained despite various macroeconomic challenges, underscoring the company’s strong operational execution.

Strong Free Cash Flow Generation

The company reported a free cash flow of $2 million for the quarter, marking a substantial $29 million improvement year-on-year. Over the last 12 months, Helios Towers generated a surplus free cash flow of $48 million, highlighting its efficient cash management and financial health.

Tenancy Growth and Strategic Progress

In Q1 2025, Helios Towers added 668 tenancies, advancing towards its strategic goal of achieving a 2.2 tenancy ratio by 2026. This progress reflects the company’s commitment to expanding its infrastructure and enhancing its market position.

Credit Rating Upgrades

The company’s credit ratings received upgrades from Fitch and S&P to BB minus, with Moody’s providing a positive outlook. These upgrades reflect Helios Towers’ strong operational execution and financial stability, enhancing its credibility in the financial markets.

Revenue and Currency Stability

With 67% of its revenue and 70% of EBITDA in hard currency, Helios Towers maintains stability against currency fluctuations. This financial strategy provides a buffer against market volatility, ensuring steady revenue streams.

Revenue Growth Partially Offset

While the company achieved a 5% year-on-year revenue growth, this was partially offset by power price de-escalations in regions like Tanzania and DRC. These challenges highlight the need for strategic adjustments to maintain revenue momentum.

Increase in Site Additions Needed

Although there was a year-on-year increase of 251 sites, Helios Towers recognizes the need for 450-500 site additions annually to meet its targets. This requirement underscores the company’s growth ambitions and the challenges of scaling operations.

Forward-Looking Guidance

Helios Towers provided optimistic forward-looking guidance, projecting a 10% EBITDA growth and a surplus free cash flow of $40 million to $60 million for the full year. The company aims for 2,000 to 2,500 tenancy additions and a deleveraging target of around 3.5x net leverage. With an expanded ROIC of 13.8%, Helios Towers is on track to achieve its FY25 target of 14%. The company plans to enhance shareholder returns starting in 2026, leveraging its robust business model.

In summary, Helios Towers Plc’s earnings call conveyed a positive outlook, with strong achievements in EBITDA growth, free cash flow, and strategic tenancy expansion. Despite some challenges, the company’s forward guidance and strategic initiatives position it well for future growth, making it an attractive prospect for investors.