Q3 2024 Helios Towers PLC Earnings Call Transcript
Key Points
- Helios Towers PLC (HTWSF) reported over 2000 tenancy additions year-to-date, showing strong progress towards their 2026 target of a 2.2 tenancy ratio.
- The company achieved a year-to-date EBITDA increase of 16% year-on-year, with expectations to end the year at the top of the range with around $420 million, representing a 14% year-over-year increase.
- Helios Towers PLC (HTWSF) has a strong base of $5.3 billion in future committed revenue, equating to over seven years of remaining leases before renewals.
- The company is on track to become free cash flow generative from next year, marking a significant shift from historically high investment and negative free cash flow.
- The company has successfully reduced leverage by 0.3x year-on-year and expects to continue reducing leverage to around 3x by the end of 2025, opening the door for potential investor distributions.
- The company experienced a free cash flow outflow of about $20 million year-to-date up to Q3, primarily driven by working capital timing issues.
- There are concerns about potential currency risks in markets like the DRC and Tanzania, although the company reports no significant changes in currency availability.
- Despite strong tenancy growth, the company faces challenges in maintaining a balance between site builds and co-locations, which could impact future revenue streams.
- The company remains cautious about M&A activities, indicating that it is not a priority within the current capital allocation framework, potentially limiting growth opportunities.
- Helios Towers PLC (HTWSF) has a high leverage ratio of 4.2x, which, although decreasing, still poses a risk until it reaches the target of 3x.
Hi, everyone and welcome to the Heli to Q3 2024 global investor call. I hope everyone's doing well and thank you very much for your time today.
So look, we're very much looking forward to giving you an update of our strong progress, year-to-date our FY'24 outlook and a look into FY'25 which very much continues within our disciplined growth and capital allocation framework.
So on page 2, we've got the usual lineup of me, Tom Greenwood , Manjit Dhillon and Chris, we'll cover the business strategic and financial highlights and then be open for Q&A at the end.
So moving now to page 5.
So the business continues to strongly move forward with now over 2000 tenancy additions here to date and a tenancy ratio of 2.04 making clear progress towards our 2.2 by 2026 target.
And with the outperformance so far this year being driven from Tanzania and Oman, we continue to see strong demand across all three key drivers being coverage gaps, capacity gaps and four G five G technology upgrades as data
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