Helios Towers reaffirms guidance after first-quarter growth

(Sharecast News) - Helios Towers reported solid growth in key financial and operational metrics for the first quarter on Thursday, underpinned by continued tenancy additions, margin expansion, and a strengthened balance sheet, as it reaffirmed full-year guidance. The FTSE 250 cellular infrastructure investor said revenue rose 5% year-on-year to $203.8m, driven by increased tenancies across its tower portfolio, which helped offset a decline in power-linked revenue due to lower energy prices.

Adjusted EBITDA grew 9% to $111.1m, with the margin improving by two percentage points to 55%, reflecting a higher tenancy ratio and reduced power costs.

Operating profit increased 14% to $76.6m, while free cash flow swung to a positive $1.5m, compared with a $27.7m outflow in the same period last year.

The improvement was attributed to EBITDA growth and lower discretionary capital spending, despite seasonal working capital outflows.

Helios said it added 668 tenancies in the quarter, lifting the total to 30,074 and increasing the tenancy ratio to 2.09x.

Site count rose to 14,417, up 2% year-on-year.

Net debt declined 2% to $1.77bn, bringing net leverage down to 4.0x from 4.4x a year earlier.

Helios Towers highlighted $5.3bn in contracted revenues, 99% of which came from multinational mobile network operators, with an average initial contract life of 6.9 years.

The company's improving credit profile was reflected in multiple rating upgrades this year, including a Fitch upgrade to BB- and a positive outlook from Moody's in April, following earlier upgrades from S&P and other agencies in 2024.

Full-year guidance was reaffirmed, including expectations for 2,000 to 2,500 tenancy additions, adjusted EBITDA of $460m to $470m, capital expenditure between $150m and $180m, and free cash flow of $40m to $60m.

Net leverage was projected to fall to approximately 3.5x by year-end.

"We are pleased to have continued the momentum from 2024, a year of significant progress across multiple value streams, into 2025," said chief executive officer Tom Greenwood.

"In the first three months of the year, we have delivered strong operational and financial performance, with adjusted EBITDA increasing 9% year-on-year, supported by over 600 tenancy additions year-to-date, and are tracking strongly towards our tenancy ratio target of 2.2x by 2026.

"Reflecting the Company's consistently strong performance, we were delighted to see continued improvements recognised in our credit ratings. S&P and Fitch upgraded our rating from B+ to BB- and Moody's improved their outlook to positive on its B1 credit rating."

Greenwood said that, despite the broader macroeconomic uncertainties, the company was confident in its outlook due to the resilience of our performance and predictability of its "robust" business model.

"We reaffirm our full-year guidance as we continue to focus on capital efficient organic growth, deleveraging and free cash flow generation."

At 0931 BST, shares in Helios Towers were down 2.01% at 110.53p.

Reporting by Josh White for Sharecast.com.