Helios Towers Plc ((GB:HTWS)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Helios Towers Plc was marked by a predominantly positive sentiment, underscoring the company’s robust financial growth and operational achievements. The highlights included record tenancy additions, a significant surplus in free cash flow, and a credit rating upgrade. Despite these successes, the company acknowledged challenges in the Democratic Republic of Congo (DRC) and a slight dip in EBITDA margins in the fourth quarter, along with limited details on future shareholder returns.
Record Tenancy Additions and Strong Financial Growth
Helios Towers reported an impressive record of tenancy additions in 2024, with nearly 2,500 tenants added, resulting in a tenancy ratio of 2.1. This growth contributed to a 10% increase in revenue and a 14% rise in EBITDA. The company also achieved a remarkable $100 million positive swing in free cash flow year-on-year.
Surplus Free Cash Flow Achieved
For the first time, Helios Towers reported a surplus free cash flow of $19 million in 2024, marking a significant milestone in its financial journey. This achievement underscores the company’s ability to generate positive cash flow, enhancing its financial stability.
Credit Rating Upgrade
Helios Towers received a credit rating upgrade from S&P to BB-, marking the second upgrade within 12 months. This improvement reflects the company’s enhanced business performance and stronger credit ratings in its market.
Guidance for Continued Growth in 2025
The company has set optimistic guidance for 2025, expecting to add between 2,000 to 2,500 tenancies and aiming for double-digit EBITDA growth. Helios Towers also projects a significant increase in free cash flow, ranging from $40 million to $60 million.
Operational Excellence and Long-term Growth Potential
Helios Towers has demonstrated operational excellence with 10 years of uninterrupted EBITDA growth at a 26% compound annual growth rate (CAGR) since 2015. This track record highlights its strong market position in Africa and the Middle East.
Challenges in DRC
The company faces operational challenges due to ongoing civil disturbances and strife between Rwanda and the DRC. However, Helios Towers has managed these effectively, ensuring minimal impact on its overall operations.
Lower EBITDA Margin in Q4
While the EBITDA margins in Q4 2024 were slightly lower than expected, this did not significantly impact the company’s overall annual growth and performance.
Limited Guidance on Potential Shareholder Returns
Helios Towers plans to engage with investors regarding potential shareholder distributions from 2026. However, specific plans or commitments have not yet been outlined.
Forward-looking Guidance
Looking ahead, Helios Towers plans to focus on shareholder returns from 2026, with free cash flow projected to increase by 2 to 3 times in 2025. The company also aims for a leverage decrease and further improvements in its credit rating, with expected EBITDA growth to between $460 million and $470 million.
In summary, Helios Towers’ earnings call painted a picture of strong financial health and strategic growth, with positive sentiment prevailing despite some operational challenges. The company’s record tenancy additions, surplus free cash flow, and credit rating upgrade are key highlights, while its forward-looking guidance suggests continued growth and financial stability in the coming years.