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Introduction & Market Context
Helios Towers plc (LSE:HTWS) released its Q1 2025 results on May 8, 2025, showcasing continued growth in its telecommunications infrastructure business across Africa and the Middle East. The company’s shares declined 1.95% to close at 110.6 following the announcement, despite reporting solid operational performance and reaffirming its full-year guidance.
The telecommunications infrastructure provider has maintained its decade-long growth trajectory, building on the momentum from its record performance in 2023 and 2024. The company continues to benefit from structural growth in mobile connectivity demand across its markets, supported by long-term contracts with major mobile network operators.
Quarterly Performance Highlights
Helios Towers reported strong operational and financial metrics for Q1 2025, with notable year-over-year improvements across key performance indicators.
As shown in the following comprehensive summary of operational and financial highlights:
The company added 668 tenancies year-to-date, contributing to a total of 30,074 tenancies across 14,417 sites. This represents a 9% increase in tenancies compared to Q1 2024, while the tenancy ratio expanded by 0.14x to 2.09x, showing progress toward the company’s "2.2x by 26" strategic target.
Revenue grew 5% year-over-year to $204 million, while Adjusted EBITDA increased 9% to $111 million, resulting in an improved EBITDA margin of 55% (up 2 percentage points). The company’s Return on Invested Capital (ROIC) expanded by 1.2 percentage points to 13.8%, reflecting the efficiency of its capital allocation strategy.
CEO Tom Greenwood highlighted the company’s consistent performance during the earnings presentation:
"We’ve delivered strong momentum towards our ’2.2x by 26’ target with significant tenancy additions and continued EBITDA growth, underpinning our confidence in the full-year outlook."
Financial Analysis
Helios Towers’ revenue growth was primarily driven by organic tenancy additions, as illustrated in the following revenue breakdown:
The company’s revenue mix shows resilience against currency fluctuations, with 67% of revenue in hard currency (59% in USD and 16% in CFA Franc/EUR). Additionally, 98% of revenue comes from blue-chip multinational operators, providing stability to the business model.
Adjusted EBITDA growth of 9% outpaced revenue growth, demonstrating operational leverage and efficiency improvements:
The company has maintained its impressive track record of consistent Adjusted EBITDA growth over the past decade, as shown in the following chart:
This consistent growth trajectory has been achieved despite various global volatility events, highlighting the resilience of Helios Towers’ business model.
On the debt front, the company reported positive developments with credit rating upgrades from both Fitch and S&P to BB-, while Moody’s revised its outlook to positive:
Net leverage remained stable quarter-over-quarter at 4.0x, representing a 0.4x reduction year-over-year. The company maintains approximately $420 million in available cash and undrawn debt facilities, with 92% fixed-rate debt providing visibility on interest costs.
Strategic Initiatives
Helios Towers’ business model focuses on maximizing returns through increased tenancy ratios, as illustrated in the following diagram:
The company’s value creation model shows how ROIC increases significantly with additional tenants, from 12% with a single tenant to 34% with three tenants per tower. This underpins the strategic focus on achieving a 2.2x tenancy ratio by 2026.
With $5.3 billion in contracted future revenue and an average remaining contract term of approximately 7 years, Helios Towers has strong visibility into its future cash flows.
The company’s capital allocation priorities remain focused on optimizing returns and strengthening the balance sheet:
CFO Manjit Dhillon emphasized the company’s progress toward its financial targets during the presentation:
"Our solid Q1 performance puts us firmly on track to achieve our full-year guidance, with improving free cash flow generation and continued deleveraging toward our target of approximately 3.5x by the end of 2025."
Forward-Looking Statements
Based on its Q1 performance, Helios Towers has reaffirmed its full-year 2025 guidance across all key metrics:
The company expects to add between 2,000 and 2,500 tenancies in 2025 (representing 8% year-over-year growth), with Adjusted EBITDA projected to reach $460-470 million (10% growth). Capital expenditure is expected to be in the range of $150-180 million, down 2% from 2024.
Free cash flow is forecast to increase significantly to $40-60 million (2-3x year-over-year), while net leverage is expected to decrease to approximately 3.5x by year-end.
The company’s progress toward these targets is well underway, as demonstrated in the following chart:
Looking beyond 2025, Helios Towers anticipates having the financial flexibility to support potential shareholder distributions starting in 2026, while continuing to pursue high-ROIC organic growth opportunities and selective acquisitions that meet strict investment criteria.
In summary, Helios Towers’ Q1 2025 results demonstrate continued execution of its strategic plan, with solid progress toward full-year targets. The company’s focus on tenancy ratio expansion, EBITDA growth, and deleveraging is positioning it for sustainable long-term value creation, with the potential for shareholder distributions on the horizon.
Full presentation:
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