Helios Towers posts 4% revenue growth as CEO steps down

19 August 2021 | Melanie Mingas

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Helios Towers saw revenue growth of 4% over the first half of the year, as the number of sites owned increased by 21%.

Over the second quarter revenue growth stood at 5%, with a 17% increase in sites and 9% increase in tenancies.

However, cash generated from operations declined 48% over both periods, a drop of US$42.6 million – from $88.3 million in H1 2020 to $45.7 million in H1 2021 – primarily driven by working "capital movements including escrow deposit payments in relation to acquisitions".

Tenancy guidance for the established five markets remains unchanged, as does capex guidance for the group.

Over the quarter, Helios closed acquisitions with Free Senegal – 1,207 sites and 1,264 tenancies – and Omantel, from which it acquired 2,890 sites for $575 million. Further highlights included the completion of a $160 million capital raise through a combined primary equity placement and convertible bond tap.

Back in March Helios Towers took Airtel Africa's towers across Madagascar, Malawi, Chad and Gabon, making it the largest independent telecommunications infrastructure company in each of Malawi, Chad and Gabon.

Commenting on the results, CEO Kash Pandya (pictured) told Capacity: "Not all sellers are looking for just price. Our mobile operator partners also look for the quality of our service, our responsiveness, our ability to build quickly and take them to market very quickly. So we find sometimes we win a deal not because we are the best on the price, but our service offering was much higher."

He continued to joke: "The Oman contract we signed is a 15-year partnership – longer than a lot of marriages to be honest!"

However, Pandya has also announced that he is to retire in April 2022, the company's next AGM, instead taking on the role of non-executive deputy chairman of the company.

Tom Greenwood, currently COO, has been appointed CEO-designate with immediate effect, ahead of April.

On this, Pandya said: "It has been an honour to lead Helios Towers over the last six years and to help shepherd it through its transformation into a public company and establishing its presence across Africa and the Middle East. We have grown a tremendous amount over my tenure and I want to thank each and every one of my colleagues for helping to make this possible. I know that there is a bright future ahead for Helios Towers, and following my term as CEO I look forward to continuing to work with the Board in my role as non-executive Deputy Chairman and supporting the management team as they pursue this new chapter."

Greenwood joined Helios in 2010 and in 2015 was appointed CFO. In that role he led the group's journey from private to public, first through the issue of debt onto the public markets in 2017, and later, the group's IPO on the London Stock Exchange in 2019. He was appointed COO in 2020.

Commenting on his latest role, Greenwood said: "I look forward to taking over the reins as we complete and integrate the recently announced acquisitions and continue on our growth journey. Both as COO and CFO, I have had the privilege of working with a very talented and resilient team in some of the world's most exciting growth markets. There is much more to go for in the coming years."

Riding the second wave

Helios isn't the only towerco seeing such levels of growth at the moment.

Leveraging the financial cycles of the mobile industry as operators increasingly step away from their passive infrastructure, Greenwood said the current environment is reminiscent of similar trends seen 2010-2015.

"The tower industry at the moment in Africa and the Middle East is at a very exciting time because what we are seeing at the moment is the second big wave of tower sales by mobile operators.

"The first big wave was from 2010-2015 where the industry really kicked off in the region and companies like us were established. Then there was a quiet spell for a few years while mobile operators weren't selling their towers," he added.

Counting "around 300,000" mobile operator-owned towers across the MEA, Greenwood said it represents around 75% of the total market. Incidentally, according to ReportLinker data released Wednesday, globally, operator-led towercos may own 24.6% of the towers globally and independent towercos 22.2%.