REG - Helios Towers PLC - Results for the year and quarter ended 31 Dec 2023
14/03/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240314:nRSN7820Ga&default-theme=true
RNS Number : 7820G Helios Towers PLC 14 March 2024
HELIOS TOWERS plc
Helios Towers plc announces results for the year and quarter ended 31 December
2023
Tenancies, Adjusted EBITDA and ROIC ahead of expectations
+29% revenue and +31% Adjusted EBITDA year-on-year growth
+10-14% Adjusted EBITDA growth, free cash flow inflection and <4.0x net
leverage targeted in FY 2024
London, 14 March 2024: Helios Towers plc ("Helios Towers", "the Group" or "the
Company"), the independent telecommunications infrastructure company, today
announces results for the year to 31 December 2023 ("FY 2023").
Tom Greenwood, Chief Executive Officer, said:
"I am extremely pleased with the operational and financial performance of the
business. In our first year with all recent acquisitions integrated, we
exceeded expectations in customer delivery and across our KPIs. This included
record organic tenancy growth that supported return on invested capital (ROIC)
expansion.
Looking forward, we have conviction in a faster pace of tenancy ratio
expansion than our prior medium-term guidance. As such, we have adjusted our
strategic target of '22,000 towers by 2026', which included meaningful
inorganic site growth, to '2.2x tenancy ratio by 2026', prioritising organic
growth and returns expansion. Consequently, we expect FY 2024 to be our
inflection year for free cash flow, and continue to grow thereafter.
We have built a compelling and unique platform in some of the world's fastest
growing mobile markets and through our focus on customer service excellence,
are well placed to capture the structural growth and deliver sustainable value
for our stakeholders."
FY 2023 FY 2022 Change Q4 2023 Q3 2023 Change
Sites 14,097 13,553 +4% 14,097 14,024 +1%
Tenancies 26,925 24,492 +10% 26,925 26,624 +1%
Tenancy ratio 1.91x 1.81x +0.10x 1.91x 1.90x +0.01x
Revenue (US$m) 721.0 560.7 +29% 187.3 183.5 +2%
Adjusted EBITDA (US$m)(1) 369.9 282.8 +31% 100.7 95.4 +6%
Adjusted EBITDA margin(1) 51% 50% +1ppt 54% 52% +2ppt
Operating profit (US$m) 146.1 80.3 +82% 33.5 43.3 -23%
Portfolio free cash flow (US$m)(1) 268.2 201.4 +33% 71.1 72.6 -2%
Cash generated from operations (US$m) 318.5 193.2 +65% 78.8 92.1 -14%
Net debt (US$m)(1) 1,783.1 1,678.0 +6% 1,783.1 1,729.9 +3%
Net leverage(1,2) 4.4x 5.1x -0.7x 4.4x 4.5x -0.1x
1 Alternative Performance Measures are described in our defined terms and
conventions.
2 Calculated as per the Senior Notes definition of net debt divided by
annualised Adjusted EBITDA.
Financial highlights
· FY 2023 revenue increased by 29% year-on-year to US$721.0m (FY
2022: US$560.7m), driven by record organic tenancy growth, complemented by
acquisitions in Malawi and Oman
o Q4 2023 revenue increased by 2% quarter-on-quarter to US$187.3m (Q3 2023:
US$183.5m)
· FY 2023 Adjusted EBITDA increased by 31% year-on-year to
US$369.9m (FY 2022: US$282.8m), driven by tenancy growth
o Excluding acquisitions, Adjusted EBITDA increased by 17% year-on-year,
representing the Company's fastest organic growth since IPO
o Q4 2023 Adjusted EBITDA increased by 6% quarter-on-quarter to US$100.7m
(Q3 2023: US$95.4m)
· FY 2023 Adjusted EBITDA margin increased 1ppt year-on-year to 51%
(FY 2022: 50%) reflecting tenancy ratio expansion, partially offset by higher
fuel prices
o Excluding the impact of higher fuel prices, which increase power-linked
revenue and operating expenses comparably, Adjusted EBITDA margin expanded
3ppt year-on-year
o Q4 2023 Adjusted EBITDA margin increased 2ppt quarter-on-quarter to 54%
(Q3 2023: 52%)
· FY 2023 operating profit increased by 82% year-on-year to
US$146.1m (FY 2022: US$80.3m), driven by Adjusted EBITDA growth
o Loss before tax improved to US$112.2m (FY 2022: US$162.5m), primarily
driven by a US$65.8m year-on-year increase in operating profit and US$53.6m
favourable movement in non-cash fair value movements on embedded derivatives,
partially offset by US$60.3m higher finance costs
o Higher finance costs reflect the non-cash impact of foreign exchange
movements on the Group's intercompany borrowings and the full year impact of
increased debt, largely related to the Oman acquisition which closed in
December 2022
· FY 2023 portfolio free cash flow increased by 33% year-on-year to
US$268.2m (FY 2022: US$201.4m), driven by Adjusted EBITDA growth and
proportionately lower increases in payments of lease liabilities and taxes
paid
o FY 2023 portfolio free cash flow exceeded updated guidance of US$260m -
US$265m, due to the timing of non-discretionary capex
· FY 2023 cash generated from operations increased by 65%
year-on-year to US$318.5m (FY 2022: US$193.2m), driven by higher Adjusted
EBITDA and improved working capital due to customer collections
· Net leverage of 4.4x decreased by 0.7x year-on-year (FY 2022:
5.1x) and by 0.1x quarter-on-quarter (Q3 2023: 4.5x)
· Business underpinned by future contracted revenues of US$5.4bn
(FY 2022: US$4.7bn), of which 99% is from multinational MNOs, with an average
remaining life of 7.8 years (FY 2022: 7.6 years)
Operational highlights
· Sites increased by 544 year-on-year to 14,097 sites (FY 2022:
13,553 sites) and by 73 quarter-on-quarter
· Tenancies increased by 2,433 year-on-year to 26,925 tenants (FY
2022: 24,492 tenants) and by 301 quarter-on-quarter
· Tenancy ratio increased by 0.10x year-on-year to 1.91x (FY 2022:
1.81x), reflecting expansion across all markets
o Acquisitions in Oman and Malawi, completed in 2022, saw strong tenancy
ratio expansion of 0.13x to 1.33x and 0.09x to 1.70x, respectively
Strategy update
· The Group's capital allocation policy is focused on growing
portfolio free cash flow while consistently delivering ROIC above its cost of
capital. Its current priorities are accretive organic investments and further
deleveraging
· Combined with a faster pace of forecast tenancy ratio expansion
compared to prior guidance, the Group has updated its strategic target of
'22,000 towers by 2026', which included approximately 5,000 inorganic sites,
to '2.2x tenancy ratio by 2026'. This is expected to support accelerated ROIC
expansion over the medium-term
FY 2024 outlook and guidance(1)
· Organic tenancy additions of 1,600 - 2,100
· Adjusted EBITDA of US$405m - US$420m
· Portfolio free cash flow of US$275m - US$290m
· Capital expenditure of US$150m - US$190m
o Of which c.US$45m is anticipated to be non-discretionary capital
expenditure
· Net leverage below 4.0x
· Neutral free cash flow(2)
1 Guidance assumes the Group continues to apply the same accounting
policies.
2 Excluding potential second acquisition closing in Oman, previously
announced on 8 December 2022.
Environmental, Social and Governance (ESG)
· The Group has made continued progress against many of its
Sustainable Business Strategy targets in FY 2023:
o 144m population coverage footprint (FY 2022: 141m)
o 5,817 rural sites (FY 2022: 5,593)
o 99.98% power uptime (FY 2022: 99.96%)
o 0% reduction in carbon emissions per tenant (FY 2022: -2%)(3)
o 28% female employees (FY 2022: 28%)
o 53% employees trained in Lean Six Sigma (FY 2022: 42%)
o 96% local employees in our operating companies (FY 2022: 96%)
· The Company has been recognised by external rating agencies for
its Sustainable Business Strategy and commitment to transparency
o ESG score of 'AAA' from MSCI, the highest score from the investment
research firm, was reaffirmed
o B score from CDP was reaffirmed
o Inclusion in the FTSE4Good Index for a second consecutive year
o ESG risk rating from Sustainalytics improved from Medium risk (22.6) to
Low risk (16.8)
o 80% score for WDI disclosure exceeded sector and UK company average
· In 2024, the Group expects to publish an updated carbon emissions
reduction target to reflect its recent expansion into four new markets
3 Reflects change in scope 1 and 2 carbon emissions per tenant
compared to 2020 baseline. Includes only the five markets that were
operational in our 2020 baseline year.
For further information go to:
www.heliostowers.com (http://www.heliostowers.com/)
Investor Relations
Chris Baker-Sams - Head of Strategic Finance and Investor Relations
+44 (0)782 511 2288
Media relations
Edward Bridges / Rob Mindell
FTI Consulting LLP
+44 (0)20 3727 1000
Helios Towers' management will host a conference call for analysts and
institutional investors at 09.30 GMT on Thursday, 14 March 2024. For the best
user experience, please access the conference via the webcast. You can
pre-register and access the event using the link below:
Registration Link - Helios Towers FY 2023 Results Conference Call
(https://www.investis-live.com/heliostowers/65a652c2bacfa60c008a95e8/vaht)
Event Name: FY2023
Password: HELIOS
If you are unable to use the webcast for the event, or if you intend to
participate in Q&A during the call, please dial in using the details
below:
Europe & International +44 203 936 2999
South Africa (local) +27 87 550 8441
USA (local) +1 646 787 9445
Passcode: 311823
Upcoming Conferences and Events
Helios Towers management is expected to participate in the upcoming
conferences outlined below:
· JP Morgan Telecoms Towers Call Series (Virtual) - 18 Mar 2024
· Berenberg UK Corporate Conference (Watford) - 19 Mar 2024
· Jefferies Pan-European Mid-Cap Conference (London) - 20 Mar 2024
· Annual General Meeting (London) - 25 Apr 2024
About Helios Towers
· Helios Towers is a leading independent telecommunications
infrastructure company, having established one of the most extensive tower
portfolios across Africa and the Middle East. It builds, owns and operates
telecom passive infrastructure, providing services to mobile network operators
· Helios Towers owns and operates over 14,000 telecommunication
tower sites in nine countries across Africa and the Middle East
· Helios Towers pioneered the model in Africa of buying towers that
were held by single operators and providing services utilising the tower
infrastructure to the seller and other operators. This allows wireless
operators to outsource non-core tower-related activities, enabling them to
focus their capital and managerial resources on providing higher quality
services more cost-effectively
Alternative Performance Measures
The Group has presented a number of Alternative Performance Measures ("APMs"),
which are used in addition to IFRS statutory performance measures. The Group
believes that these APMs, which are not considered to be a substitute for or
superior to IFRS measures, provide stakeholders with additional helpful
information on the performance of the business. These APMs are consistent with
how the business performance is planned and reported within the internal
management reporting to the Board. Loss before tax, gross profit, non-current
and current loans and long-term and short-term lease liabilities are the
equivalent statutory measures (see 'Certain defined terms and conventions').
For more information on the Group's Alternative Performance Measures, please
see the Alternative Performance Measures section of this release.
Chair's statement
Uniquely positioned in the world's most exciting mobile markets
"Our talented people and partners have once again ensured that Helios Towers
has delivered excellent performance in 2023, exceeding both operational and
financial expectations laid out at the beginning of the year. Our focus on
Customer Service Excellence and People and Business Excellence has been
matched by our unwavering commitment to responsible governance."
Sir Samuel Jonah KBE, OSG
Chair
I am delighted to welcome you to our 2023 Annual Report, which demonstrates
the strong progress we have made on our platform during the year. Through
successful acquisition integration and continued progress on our 2026
strategy, underpinned by a robust governance framework, the business is
well-positioned to create sustainable value for our stakeholders.
This is my fifth letter as Chair of Helios Towers and as I reflect on our
latest accomplishments detailed throughout this report, I am reminded of how
the business has transformed over these years and effectively mitigated global
challenges, delivering on our purpose of driving the growth of mobile
communications across Africa and the Middle East.
Through the challenges of Covid-19 and subsequent macroeconomic volatility,
the Company consistently demonstrates its qualities: the resilience to
inflation and foreign currency movements in its revenues, its operational
expertise to deliver best-in-class customer service, and the embedded organic
growth and lease-up opportunities across its markets.
Following the platform expansion across 2020 to 2022, in which the business
doubled its portfolio and diversified through entry into four new markets, the
Company entered 2023 with the opportunity to demonstrate the quality of its
enlarged portfolio, against the backdrop of macroeconomic volatility.
With operational and financial performance exceeding guidance laid out at the
beginning of the year, resulting in the fastest rate of organic growth and
ROIC expansion since our Initial Public Offering (IPO), the quality of our
enlarged platform, leadership and local teams is evident.
Our 2026 Sustainable Business Strategy
Our 2026 Sustainable Business Strategy is focused on creating value for all
stakeholders and is reflected through targets within each of our three
pillars: Customer Service Excellence, People and Business Excellence, and
Sustainable Value Creation.
In the context of higher interest rates globally, we have updated our capital
allocations principles to focus on organic growth and deleveraging, and as
such target a slower pace of inorganic platform expansion. Combined with
conviction in a faster pace of tenancy ratio expansion than prior guidance,
the Board and management have adapted our prior target of '22 by 26' to '2.2x
by 26'. The prior target being linked to portfolio scale and operating 22,000
towers by 2026, to now focus on portfolio utilisation and to deliver a 2.2x
tenancy ratio by 2026.
We expect to achieve this through our uniquely positioned platform, proactive
sales approach and our focus on Customer Service Excellence. This adaptation
does not rule out acquisitions, which remain a key tool for us, but reflects
our disciplined approach to capital allocation and focus on organic growth,
lease-up and ROIC enhancement.
Our strategy is underpinned by our commitment to strong governance and ethics.
The Board is satisfied that our strategy and actions reflect the requirements
of, and our compliance with, Section 172(1), and there is more information
relating to this throughout this Strategic Report. This includes our
commitment to our workforce, customers, partners, suppliers, investors,
communities and the environment, and our key impact areas of digital
inclusion, climate action, local and talented teams and responsible
governance.
Digital inclusion and climate action
Enabling digital inclusion in the communities we serve is one of the key
reasons why we do what we do. Every new site, colocation or operational
improvement we make furthers this ambition.
In 2023, our growth of +544 sites meant an additional 3.7 million people
enjoyed the coverage provided by our towers. We also continued to improve
power uptime at our sites, delivering 99.98% even though in many of our
markets grid connectivity can be unreliable or inconsistent.
With significant population growth predicted and low mobile penetration in
many of our regions today, we expect to see continued strong demand for tower
infrastructure over the coming years.
While we seek to grow, we also understand the importance of minimising our
carbon footprint. Alongside lower emissions, reducing our reliance on fuel
supports improved financial performance. Between 2022-2030 we plan to invest
US$100 million in low carbon solutions across the Group, including grid
connections, hybrid and solar solutions. We look forward to further advancing
our carbon reduction roadmap in 2024, including refreshing our carbon targets
to include our four recent acquisitions.
Local, diverse, talented teams
The Board values our inclusive culture, believing it to be central to employee
engagement and a crucial enabler for the long-term success of the Company. We
were delighted once again to attract a 100% response rate to our Pulse
Engagement Survey, which serves as a check-in between our biennial engagement
survey.
We have been working to address the key feedback from our 2022 survey to
further enrich our colleagues' experience of working with Helios Towers.
Furthermore, we have implemented several initiatives including new wellbeing
programmes, enhancing employee development and improving performance
management across the Company.
Responsible governance
We fully appreciate the need for a strong governance framework to ensure we
meet the high standards we set ourselves to work responsibly and comply with
regulations.
At Board level, in relation to the Financial Conduct Authority's (FCA) Listing
Rules target, FTSE Women Leaders Review recommendations and the Parker Review,
we continue to exceed on ethnicity and have held 40% female representation on
the Board, along with 24% in management positions. Following changes to Board
roles announced in May 2023, we now also comply with the FTSE Women Leaders
Review recommendation and FCA's Listing Rules target to have a female director
in at least one of the senior board positions.
Our governance structures and policies help us to deliver on our strategy,
manage our performance and ultimately support the value we create for all our
stakeholders.
Outlook
Our performance in 2023 demonstrated the quality of our platform, uniquely
positioned in some of the world's fastest growing mobile markets, as well as
the dedicated, local teams and strong leadership throughout the Company.
Looking forward, I am confident we will continue to drive the growth of mobile
communications in our regions and deliver sustainable value for many years to
come for all stakeholders.
Sir Samuel Jonah KBE, OSG
Chair
Group CEO's statement
Strong and consistent delivery on our expanded platform
"In my second year as CEO, and the first for the business in our enlarged
nine-market platform, I am delighted with the team's performance on multiple
fronts. Through the effective execution of our Sustainable Business Strategy,
which prioritises delivering Customer Service Excellence through empowering
our people, we took our customer service levels to new highs, successfully
integrated our new acquisitions, delivered record organic tenancy growth and
continued to drive sustainable value through robust colocation lease-up and
ROIC enhancement."
Tom Greenwood
Group CEO
I am thrilled to report on strong Group performance in 2023, a year in which
we again have demonstrated the qualities of our enlarged platform and our
resilience against a volatile macroeconomic backdrop. This performance is
underpinned by our talented local teams who continue to deliver best-in-class
service for our customers.
Following a period of transformational expansion across 2020 to 2022,
investing over US$1 billion to double the size of our platform to almost
14,000 towers and expand into four new markets, we entered 2023 ready to
demonstrate our ability to successfully integrate assets while at the same
time further elevating our best-in-class customer service, driving lease-up
and materially improving ROIC.
I am delighted that we exceeded many of our ambitious expectations laid out at
the beginning of the year, delivering record organic tenancy additions and
strong lease-up, accelerating Adj. EBITDA and portfolio free cash flow growth
and reducing net leverage back to within our target range. It was the fastest
rate of organic growth and ROIC expansion delivered since IPO.
At the same time, we continued to demonstrate our resilience to macroeconomic
volatility. Despite average inflation of 6% and foreign currency volatility in
some of our markets, notably Ghana and Malawi, our financial performance
measured by Adj. EBITDA continued to track in line with tenancy growth. It is
our robust business model that supports this resilience, reflected by US$5.4
billion of future contracted revenues with investment grade or near investment
grade customers, that is largely denominated in hard currencies with further
protections through consumer price index (CPI) and power escalators.
It is from these strong foundations we drive value for all our stakeholders,
captured in ambitious targets under our three pillars of Customer Service
Excellence, People and Business Excellence, and Sustainable Value Creation.
Customer Service Excellence
Our philosophy for customers is simple: we are committed to delivering
Customer Service Excellence in everything we do, whether that's in our core
offerings of power delivery, roll out and site services, or by proactively
anticipating and responding to our customers' needs.
One of our main KPIs is power availability, and in 2023 we achieved power
uptime of 99.98% (2022: 99.96%). We continued to deliver at world-class
levels, even in markets with limited grid availability and road
infrastructure. All of our new markets have seen material improvements in
power uptime since we started operations. For example, since entering Oman in
December 2022 we reduced downtime per tower by 89% from nearly six minutes to
38 seconds. Similarly in Senegal, we reduced downtime per tower from six
minutes in May 2021 to a record four seconds in December 2023. We remain
focused on our Group goal of just 30 seconds of downtime per tower per week by
2026.
Another core customer service offering is the speed at which we can safely
roll out new sites and get MNOs on air. We have internal targets focused on
continuous improvement, covering multiple functions from supply chain
management to operations and finance. In 2023, we took our performance to new
levels, installing many colocations for our customers within 24 hours from
order.
This focus on Customer Service Excellence has supported record organic tenancy
growth in 2023. Coupled with our sustainable pricing strategy and continuous
improvement ethos, it ensures we are positioned to support our customers and
deliver excellence for the long-term, through the initial 10-15-year contract
term and well beyond.
People and Business Excellence
Our second pillar focuses on integrating top talent and safe, efficient
business practices to achieve Customer Service Excellence and in turn our
overall success. While we are an asset-heavy business, our most important
asset is always our people. We dedicate resources to nurture and enable our
people and partners, equipping them with tools and training for data-driven
decision-making, and personal development with people's health and safety of
paramount importance in everything we do.
As a Lean Six Sigma (LSS) Black Belt, I'm committed to supporting colleagues
through our Orange and Black Belt initiatives. As part of our LSS programme,
colleagues are challenged to execute projects enhancing business efficiency
and performance. During this year, I was delighted to be the mentor for
Lujaina Al Amri, a female project engineer in Oman. This opportunity allowed
me to directly contribute to discussing her project and business challenges,
while nurturing our emerging talent and advocating for increased female
representation in a historically male-dominated field.
LSS is at the core of our people development, and one of our strategic targets
is to have 70% of our workforce trained to Orange or Black Belt by 2026.
We are making good progress, with 53% of our team trained by the end of the
year. We've also invested in another cohort of next generation leaders, with
25 of our rising stars going to Cranfield University for leadership training,
following 50 colleagues who completed the programme last year.
When it comes to enhancing our culture and leadership approach, the big themes
this year have been empowerment, ownership and accountability. We viewed these
as particularly important following our expansion across 2020 to 2022, which
doubled the size of the business and meant our previous management operating
model had to change to effectively manage the new scale. We held several
off-site management meetings to promote our ethos of empowering colleagues
across the business to make the right decisions quickly. We also held strategy
days across each of our OpCos, enabling every employee to understand and
contribute to the strategic development of the Company.
Our OpCo teams, which have 96% local staff across the Group, strongly mirror
the communities we serve, fostering a rich business culture. We believe that
the most effective business performance is achieved through empowering local
leadership and teams to deliver. Female representation has remained at 28% in
the year, with 24% at the senior management level and 40% at the Board level.
In 2023, we started a Board mentor programme connecting female Board members
with our top 25 female leaders across the organisation, creating an
environment for coaching and support for career enhancement. In 2024, we're
initiating a female-male 'reciprocal mentoring' programme, which focuses on
two-way mentorship between colleagues throughout the organisation.
Sustainable Value Creation
The third pillar in our strategy, Sustainable Value Creation, takes the
successful output of our other two pillars and combines it with our
disciplined approach to capital allocation. It is focused on value creation
for all our stakeholders.
In 2023, we achieved record organic tenancy additions of +2,433, far exceeding
our previous record of +1,601 tenancies in 2022. It was particularly pleasing
to see our new market Oman deliver +358 tenancies in the first year of
ownership, exceeding our initial expectations, as well as achieving over
+1,000 organic tenancy additions in DRC for the very first time.
Notably, the majority of the tenancy additions came through lease-up on our
existing towers, with our tenancy ratio expanding +0.10x year-on-year to
1.91x. This reflects our ability to identify uniquely positioned towers in
each of our markets and our pro-active customer partnership approach. This
approach supports our ongoing readiness to safely deliver new rollout in
market-leading timescales.
As lease-up of our sites continues apace, and as we expand our portfolio, it's
with real pride that we see the societal and environmental benefits that our
tower-sharing model creates. Today, we estimate that our sites now cover 144
million people, compared to 141 million one year ago.
We also continued to invest in low carbon solutions, investing US$12 million
in 2023 on grid connections, solar and hybrid solutions in addition to
trialling wind technology for the first time.
Year-on-year carbon emissions per tenant were flat, with the benefit of
colocation lease-up and power investments offset by higher grid emission
factors in Tanzania and Senegal, as well as record tenancy growth in DRC, a
fuel intensive market.
Through our strong tenancy growth and operational investments, we achieved
+31% Adj. EBITDA and +82% operating profit growth in 2023. This also supported
ROIC increasing meaningfully, expanding from 10.3% to 12.0%. Loss before tax
improved by US$50.3 million to a loss of US$112.2 million, reflecting improved
operating profit.
2.2x by 26
In the context of higher interest rates, we have updated our capital
allocation priorities and over the near-term we are focused on organic growth
and deleveraging. We anticipate inorganic activity and platform growth to be
at a slower pace than previously guided. As such, we have tweaked our internal
target from 22,000 towers by 2026 to 2.2x tenancy ratio by 2026. This reflects
our updated capital allocation priorities and conviction in faster lease-up
than previously guided.
This does not rule out attractive acquisitions, but it does illustrate our
continued disciplined approach to capital allocation and to ensure our
strategy is adaptable to external factors to drive the best value for our
stakeholders.
Embedding health and safety in our DNA
I am proud of all the ways we support our people, but at Helios Towers we know
the single most important thing we can do for our colleagues is to protect
their health and safety. In the last two to three years, we have worked hard
at every level of the organisation to embed this fully into our culture. From
working at height to tower construction to working with power set-ups, safety
risks are always present for our people and partners, so we do everything we
can to avoid accidents.
We are also very transparent in our health and safety disclosures, declaring
the number of incidents not just in our own workforce, but also among the
11,500 partners in our contractor network. Transparency is key to achieving
our safety culture, and I'm very pleased to see that our near miss reporting
rate has increased by 50% year-on-year. This improvement demonstrates open
transparent communication through the business and increases our data pool,
which allows us to learn, adapt and improve to ensure we are better able to
keep our colleagues and partners safe when at work.
Furthermore, this year we have been leading the way in the wider telecoms
community, for example by organising health and safety forums for the tower
industry in Africa, in partnership with Nokia. We are breaking new ground in
getting the whole industry together to ensure safety is our shared number one
priority.
I am pleased that our commitment to health and safety, and sustainability more
generally, also continues to deliver solid value to a range of stakeholders.
Our sustainability credentials were confirmed this year by a AAA
sustainability rating with MSCI, one of the leading providers of critical
decision support tools and services for the global investment community.
Outlook
Following a strong 2023, in which we demonstrated the strength of our platform
through accelerating organic growth and increasing returns, we expect to
deliver more of the same over the coming years. Our revised strategic goal of
'2.2x by 26', reflects our capital allocation priorities and conviction of
faster lease-up than previously guided.
I expect our uniquely positioned platform with leading market share in some of
the world's fastest growing markets, our dedicated focus on delivering
Customer Service Excellence, alongside our talented local teams, will continue
to drive sustainable value for all our stakeholders for many years to come.
Tom Greenwood
Group CEO
Group CFO's statement
Record organic tenancy growth, ROIC enhancement and proactively managing our
balance sheet
"In 2023, we accelerated our organic growth, increased ROIC and strengthened
our funding position, against the backdrop of a rising interest rate
environment and continued global volatility. This performance reflects the
strength and diversification of our enlarged platform, following two years of
transformational expansion."
Manjit Dhillon
Group CFO
2023 was our most successful year for organic growth and ROIC expansion since
IPO. With a record +2,433 organic tenancy additions delivered across our
enlarged platform, we exceeded expectations for Adjusted EBITDA, operating
profit and cash flow generation, while also reducing our net leverage back
within our target range, ahead of schedule.
We also strengthened our funding position, partially reducing our 2025 Senior
Notes through new loan facilities, which extended our average maturity by one
year with only a minimal increase in our cost of debt, despite materially
higher rates globally.
Our playbook in action
Our playbook is fairly simple - identify attractive high growth mobile markets
with power and tower infrastructure gaps. Then identify compelling entry
opportunities, either organically or more commonly inorganically through
portfolio acquisitions, which create leading market positions, provide strong
organic growth and lease-up opportunities and are underpinned by a robust base
of revenues, often in hard currencies and supplemented by contractual
escalators.
This has been demonstrated through the four new market acquisitions which have
been integrated in the last couple of years. We are pleased with the
performance of the new acquisitions, all of which have hit the ground running.
While our efficiency metrics were diluted in these acquisitive years (notably
tenancy ratio, Adjusted EBITDA margin and ROIC), this not only reflected the
relative infancy of these assets but also the opportunity. In 2023, we started
to demonstrate the quality of these acquisitions, alongside the long-term
embedded growth within all our markets.
Our record organic tenancy growth supported our tenancy ratio expanding by
+0.1x, reflecting expansion in both our new markets, which are tracking in
line with our expectations, as well as continued growth within our established
platform, in particular DRC that added over 1,000 tenancies through the year.
Consequently, Group ROIC expanded at its fastest rate since IPO from 10.3% to
12.0% with portfolio free cash flow expanding +33% and substantially reduced
capital intensity for the business, reflecting our disciplined approach to
capital allocation which always targets investments with a meaningful surplus
to our weighted average cost of capital (WACC).
Robust business model
Our strong performance is underpinned by our robust business model that
continues to demonstrate its resilience through macroeconomic volatility.
While we saw a 11% increase in fuel prices, 6% in CPI and 4% foreign currency
movements against the dollar, our Adjusted EBITDA expanded 31%, in line with
our average tenancy growth.
Our revenues are largely protected from inflation and foreign currency
movements, through four of our markets being innately hard-currency, in
addition to contractual CPI and power price escalations. In our quarterly
earnings releases over the past few years, we continue to demonstrate this
dynamic.
In addition to these escalations, our defence against macroeconomic volatility
is established through a protective blend of sustainable pricing strategy,
market diversity and a diverse portfolio of blue-chip customers.
Customer mix: Our customers comprise major MNOs across Africa and the Middle
East, contributing around 98% of our revenues in 2023. This revenue stream is
diversified across several blue-chip MNOs, with none representing more than
27% of our revenue for the year. Additionally, we maintain sustainable
pricing, offering lease rates approximately 30% lower than the MNOs' overall
cost of ownership.
Long-term contracts: Traditionally, our agreements span initial periods of
10-15 years, followed by automatic renewals. As at 31 December 2023, the Group
had an average of 7.8 years remaining in the initial term across our
contracts. This equates to US$5.4 billion in future revenue already secured,
marking a 15% increase year-on-year, through organic growth and contract
renewals.
Hard currency earnings: Another layer of safeguarding comes from our operation
within hard currency markets. Countries like DRC, Senegal, Oman, and Congo
Brazzaville are either dollarised or hard currency pegged. Within the Group,
71% of our Adjusted EBITDA comes from hard currency sources, strengthened by
contractual escalations linked to power and CPI.
Through the year, we showcased how these attributes shield our Adjusted EBITDA
and position us favourably to seize growth opportunities in a robust and
resilient manner.
Our performance in 2023
We delivered record organic tenancy additions of +2,433, far exceeding our
guidance of +1,600-2,100 provided at the beginning of the year, with the
overachievement largely driven by lease-up. Consequently, we saw strong
revenue and Adjusted EBITDA growth of 29% and 31% respectively. Our operating
profit reached a record of US$146.1 million, marking an increase of 82%
year-on-year.
Our Adjusted EBITDA margin increased by 1ppt from 50.4% in 2022 to 51.3% in
2023. Our Adjusted EBITDA margin was partially impacted by higher fuel prices
in 2023, as both fuel-linked revenues and operating expenses increased
comparably due to pricing and therefore decreased margin. Adjusting for this
dynamic, our Adjusted EBITDA margin increased by 3ppt year-on-year, reflecting
the strong lease-up delivered through the year.
The Group's loss before tax was US$112.2 million, an improvement of US$50.3
million year-on-year. The impact of foreign currency movements was US$86.1
million, largely reflecting the non-cash impact of intercompany loan
movements. Nevertheless, with our focus on tenancy growth and operational
efficiencies, we anticipate enhanced profitability in the near term. This
transformation is evident in our five established markets, where our business
is evolving towards profitability.
Cash flow
Cash flow generated from our existing asset base, or portfolio free cash flow,
increased by 33% to US$268.2 million. The increase was driven by Adjusted
EBITDA growth and improved cash conversion, principally related to
proportionately lower increases in payments of lease liabilities and taxes
paid. Cash generated from operations increased by 65% to a record US$318.5
million (2022: US$193.2 million) driven by higher Adjusted EBITDA, lower deal
costs and movements in working capital.
With portfolio free cash flow growth and a large decrease in capital
expenditure in the year, our free cash flow improved materially from negative
US$720.6 million to negative US$81.1 million and we continue to move towards
reaching neutral free cash flow in 2024 and positive free cash flow
thereafter.
Balance sheet
In September, we raised up to US$720 million loan and credit facilities as
part of a liability management exercise, to opportunistically partially tender
our 2025 Senior Notes and repay our existing term loan. In total US$405
million was utilised, resulting in our average maturities extending by one
year with a minimal increase in our cost of debt, despite the rising interest
rate environment.
We believe this reflects the consistency of our performance delivery over the
past few years, as well as the improved scale and diversification achieved
through our platform expansion. Our expansion over the last few years has
resulted in us having US$38.5 million of net liabilities at year-end,
primarily driven by the depreciation on acquired assets and financing costs
associated with those acquisitions, as well as the non-cash impact of foreign
currency movements on our foreign currency asset base. As we lease-up those
assets over the next few years, we expect the liability position to reverse.
Our net current assets at year end remain strong at US$84.2 million.
At year-end our balance sheet debt remained in a solid position, with a
four-year average remaining life and over 80% of it being fixed. However, we
continue to be opportunistic in regard to our debt liability management and
are currently reviewing options around refinancing in 2024.
We closed the year with net leverage of 4.4x, within our medium-term target
range of 3.5-4.5x and ahead of expectations. Given the projected earnings
growth ahead, we target to be below 4.0x by the end of 2024.
Capital allocation
We have a disciplined approach to capital allocation, in which every
investment needs to achieve a sufficient spread above our cost of capital
among other factors. While we have a strong platform, the higher interest rate
environment in which we operate today requires us to adjust return
requirements for each investment.
In this context, our primary focus for capital allocation looking forward
revolves around maximising returns through highly selective organic
investments and strengthening our balance sheet. Consistent with prior years
our primary focus is on organic investments including colocations, operating
expense initiatives and highly selective BTS. Following this, our capital
allocation priorities shift from acquisitions in the short term to supporting
a reduction in our net leverage to below 4.0x by year-end 2024.
With free cash flow anticipated to move into positive territory over the near
term, we are now close to a juncture where the capital we generate allows us
the capacity to make distributions to our investors, both debt and equity
holders, while still having ample resources to invest in our growth.
Outlook
Our outlook and strategy is simple - consistently look for and invest in
capital efficient opportunities to increase our return on invested capital and
ensure we continue to exceed our cost of capital. We have an exciting year
ahead where we will continue to prioritise our capital allocation on high
returning organic growth while delivering exceptional customer experience.
In 2024 and beyond, our focus remains steadfast on these objectives, aiming to
leverage the positive aspects of our high-growth markets combined with our
robust business model for the benefit of all stakeholders.
This fundamental approach forms the core of our strategy. We've laid down the
foundations that promise a strong growth trajectory irrespective of global
market shifts.
Manjit Dhillon
Group CFO
Alternative Performance Measures
The Group has presented a number of Alternative Performance Measures (APMs),
which are used in addition to IFRS statutory performance measures.
The Group believes that these APMs, which are not considered to be a
substitute for or superior to IFRS measures, provide stakeholders with
additional helpful information on the performance of the business. These APMs
are consistent with how the business performance is planned and reported
within the internal management reporting to the Board. Some of these measures
are also used for the purpose of setting remuneration targets.
Adjusted EBITDA and Adjusted EBITDA margin
Definition
Management defines Adjusted EBITDA as loss before tax for the year, adjusted
for finance costs, other gains and losses, interest receivable, loss on
disposal of property, plant and equipment, amortisation of intangible assets,
depreciation and impairment of property, plant and equipment, depreciation of
right-of-use assets, deal costs for aborted acquisitions, deal costs not
capitalised, share-based payments and long-term incentive plan charges, and
other adjusting items. Other adjusting items are material items that are
considered one-off by management by virtue of their size and/or incidence.
Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by revenue.
Purpose
The Group believes that Adjusted EBITDA and Adjusted EBITDA margin facilitate
comparisons of operating performance from period to period and company to
company by eliminating potential differences caused by variations in capital
structures (affecting interest and finance charges), tax positions (such as
the impact of changes in effective tax rates or net operating losses) and the
age and booked depreciation on assets. The Group excludes certain items from
Adjusted EBITDA, such as loss on disposal of property, plant and equipment and
other adjusting items because it believes they facilitate a better
understanding of the Group's underlying trading performance.
Reconciliation between APM and IFRS 2023 2022
US$m
US$m
Loss before tax (112.2) (162.5)
Adjustments applied to give Adjusted EBITDA Adjusting items: 3.3 19.1
Deal costs(1)
Share-based payments and long-term incentive plan charges(2) 3.7 4.5
Other/Restructuring 0.9 -
(Loss)/Gain on disposal of property, plant and equipment (3.1) 0.4
Other gains and losses 6.1 51.4
Depreciation of property, plant and equipment 160.9 144.6
Amortisation of intangible assets 26.1 12.6
Depreciation of right-of-use assets 32.0 21.3
Interest receivable (1.3) (1.8)
Finance costs 253.5 193.2
Adjusted EBITDA 369.9 282.8
Revenue 721.0 560.7
Adjusted EBITDA margin 51% 50%
1 Deal costs comprise costs related to potential acquisitions and
the exploration of investment opportunities, which cannot be capitalised.
These comprise employee costs, professional fees, travel costs and set-up
costs incurred prior to operating activities commencing.
2 Includes associated costs.
Adjusted gross profit and Adjusted gross margin
Definition
Adjusted gross profit means gross profit, adding back site and warehouse
depreciation, divided by revenue.
Adjusted gross margin means Adjusted gross profit divided by revenue.
Purpose
This measure is used to evaluate the underlying level of gross profitability
of the operations of the business, excluding depreciation, which is the major
non-cash measure otherwise reflected in cost of sales. The Group believes that
Adjusted gross profit facilitates comparisons of operating performance from
period to period and company to company by eliminating potential differences
caused by the age and booked depreciation on assets. It is also a proxy for
the gross cash generation of its operations.
Reconciliation between IFRS and APM 2023 2022
US$m
US$m
Gross profit 270.6 194.8
Add back: Site and warehouse depreciation 185.6 158.1
Adjusted gross profit 456.2 352.9
Revenue 721.0 560.7
Adjusted gross margin 63% 63%
Portfolio free cash flow
Definition
Portfolio free cash flow is defined as Adjusted EBITDA less maintenance and
corporate capital additions, payments of lease liabilities (including interest
and principal repayments of lease liabilities) and tax paid.
Purpose
Portfolio free cash flow is used to value the cash flow generated by the
business operations after expenditure incurred on maintaining capital assets,
including lease liabilities, and taxes. It is a measure of the cash generation
of the tower estate.
Reconciliation between IFRS and APM 2023 2022
US$m
US$m
Cash generated from operations 318.5 193.2
Adjustments applied: 48.1 70.5
Movement in working capital
Adjusting items: Deal costs(1) 3.3 19.1
Adjusted EBITDA 369.9 282.8
Less: Maintenance and corporate capital additions (35.5) (20.3)
Less: Payments of lease liabilities(2) (45.3) (40.8)
Less: Tax paid (20.9) (20.3)
Portfolio free cash flow 268.2 201.4
1 Deal costs comprise costs related to potential acquisitions and
the exploration of investment opportunities, which cannot be capitalised.
These comprise employee costs, professional fees, travel costs and set-up
costs incurred prior to operating activities commencing.
2 Payment of lease liabilities comprises interest and principal
repayments of lease liabilities.
Gross debt, net debt and net leverage
Definition
Gross debt is calculated as non-current loans and current loans and long-term
and short-term lease liabilities.
Net debt is calculated as gross debt less cash and cash equivalents. Net
leverage is calculated as net debt divided by annualised Adjusted EBITDA(1).
Purpose
Gross debt is a prominent metric used by investors and rating agencies.
Net debt is a measure of the Group's net indebtedness that provides an
indicator of overall balance sheet strength. It is also a single measure that
can be used to assess the Group's cash position relative to its indebtedness.
The use of the term 'net debt' does not necessarily mean that the cash
included in the net debt calculation is available to settle the liabilities
included in this measure.
Net leverage is used to show how many years it would take for a company to pay
back its debt if net debt and Adjusted EBITDA are held constant.
Reconciliation between IFRS and APM 2023 2022
US$m
US$m
External debt 1,650.3 1,571.6
Lease liabilities 239.4 226.0
Gross debt 1,889.7 1,797.6
Cash and cash equivalents 106.6 119.6
Net debt 1,783.1 1,678.0
Annualised Adjusted EBITDA(1) 403.0 328.8
Net leverage 4.4x 5.1x
1 Annualised Adjusted EBITDA calculated as per the Senior Notes definition
as the most recent fiscal quarter multiplied by four, adjusted to reflect the
annualised contribution from acquisitions that have closed in the most
recent fiscal quarter. This is not a forecast of future results.
Return on invested capital
Definition
Return on invested capital (ROIC) is defined as annualised portfolio free cash
flow divided by invested capital.
Invested capital is defined as gross property, plant and equipment and gross
intangible assets, less accumulated maintenance and corporate capital
expenditure, adjusted for IFRS 3 and IAS 29 accounting adjustments and
deferred consideration for future sites.
Purpose
This measure is used to evaluate asset efficiency and the effectiveness of the
Group's capital allocation.
Reconciliation between IFRS and APM 2023 2022
US$m
US$m
(Restated)²
Property, plant and equipment 918.3 907.9
Accumulated depreciation 1,127.5 934.0
Accumulated maintenance and corporate capital expenditure (260.3) (224.8)
Intangible assets 546.4 575.2
Accumulated amortisation 75.6 50.4
Accounting adjustments and deferred consideration for future sites (180.1) (70.7)
Total invested capital 2,227.4 2,172.0
Annualised portfolio free cash flow(1) 268.2 223.8
Return on invested capital 12.0% 10.3%
1 Annualised portfolio free cash flow is calculated as portfolio
free cash flow for the respective period, adjusted to annualise the impact of
acquisitions closed during the respective period.
2 Restatement on finalisation of acquisition accounting; see Note
31.
Detailed financial review
Consolidated Income Statement
For the year ended 31 December
Year ended 31 December
(US$m) 2023 2022
Revenue 721.0 560.7
Cost of sales (450.4) (365.9)
Gross profit 270.6 194.8
Administrative expenses (127.6) (114.1)
Gain/(loss) on disposal of property, plant and equipment 3.1 (0.4)
Operating profit 146.1 80.3
Interest receivable 1.3 1.8
Other gains and losses (6.1) (51.4)
Finance costs (253.5) (193.2)
Loss before tax (112.2) (162.5)
Tax expense 0.4 (8.9)
Loss after tax (111.8) (171.4)
Loss attributable to: (100.1) (171.5)
Owners of the Company
Non-controlling interests (11.7) 0.1
Loss for the year (111.8) (171.4)
Loss per share: (10) (16)
Basic loss per share (cents)
Diluted loss per share (cents) (10) (16)
Segmental key performance indicators
For the year ended 31 December
Following the Group's recent expansion into new countries and related internal
management and reporting reorganisation, the Group's segments are now
presented on a regional rather than a country basis, with comparative
information re-presented accordingly.
$ values are presented as US$m Group MENA(2) East & West Africa(3) Central & Southern Africa(4)
2023 2022 2023 2022 2023 2022 2023 2022
Sites at year end 14,097 13,553 2,535 2,519 6,396 6,300 5,166 4,734
Tenancies at year end 26,925 24,492 3,375 3,017 12,608 12,093 10,942 9,382
Tenancy ratio at year end 1.91x 1.81x 1.33x 1.20x 1.97x 1.92x 2.12x 1.98x
Revenue for the year ($) 721.0 560.7 57.5 3.6 312.6 261.8 350.9 295.3
Adjusted gross margin(Δ) 63% 63% 77% 73% 69% 67% 56% 59%
Adjusted EBITDA(Δ) for the year(1) ($) 369.9 282.8 38.5 2.3 199.8 162.9 167.6 149.1
Adjusted EBITDA margin(Δ) for the year 51% 50% 67% 64% 64% 62% 48% 50%
1 Group Adjusted EBITDA for the year includes corporate costs of
US$36.0 million (2022: US$31.5 million).
2 MENA (Middle East & North Africa) segment reflects the
Company's operations in Oman.
3 East & West Africa segment reflects the Company's
operations in Tanzania, Senegal and Malawi.
4 Central & Southern Africa segment reflects the Company's
operations in DRC, Congo Brazzaville, South Africa, Ghana and Madagascar.
Total tenancies as at 31 December
$ values are presented as US$m Group MENA East & West Africa Central & Southern Africa
2023 2022 2023 2022 2023 2022 2023 2022
Standard colocations 10,929 9,611 744 498 5,332 5,080 4,853 4,033
Amendment colocations 1,899 1,328 96 - 880 713 923 615
Total colocations 12,828 10,939 840 498 6,212 5,793 5,776 4,648
Total sites 14,097 13,553 2,535 2,519 6,396 6,300 5,166 4,734
Total tenancies 26,925 24,492 3,375 3,017 12,608 12,093 10,942 9,382
Δ Alternative Performance Measures are defined on pages 64-66 of the Annual
Report.
Revenue
Revenue increased by 28.6% to US$721.0 million in the year ended 31 December
2023 from US$560.7 million in the year ended 31 December 2022. The increase in
revenue was driven by organic tenancy growth, especially in DRC, contractual
CPI and power escalators and acquisitions in Malawi and Oman in 2022.
Cost of sales
Year ended 31 December
% of Revenue % of Revenue
(US$m) 2023 2023 2022 2022
Power 177.3 24.6% 131.3 23.4%
Non-power 87.5 12.2% 76.5 13.6%
Site and warehouse depreciation 185.6 25.7% 158.1 28.2%
Total cost of sales 450.4 62.5% 365.9 65.3%
The table below shows an analysis of the cost of sales on a region-by-region
basis for the year ended 31 December 2023 and 2022.
Group Middle East & North Africa East & West Africa Central & Southern Africa
(US$m) 2023 2022 2023 2022 2023 2022 2023 2022
Power 177.3 131.3 7.4 0.6 60.4 50.4 109.5 80.3
Non-power 87.5 76.5 5.9 0.5 36.4 35.0 45.2 41.0
Site and warehouse depreciation 185.6 158.1 19.0 2.2 80.9 78.3 85.7 77.6
Total cost of sales 450.4 365.9 32.3 3.3 177.7 163.7 240.4 198.9
Cost of sales increased to US$450.4 million in the year ended 31 December 2023
from US$365.9 million in the year ended 31 December 2022, due primarily to a
full year of operations in Malawi and Oman (US$42.7 million) and organic site
growth.
Administrative expenses
Administrative expenses increased by 11.8% to US$127.6 million in the year
ended 31 December 2023 from US$114.1 million in the year ended 31 December
2022. Year-on-year administrative expenses as a percentage of revenue has
decreased by 2.6%. The increase in administrative expenses is primarily due to
the impact of acquisitions that increased amortisation and other
administrative costs.
Year ended 31 December
% of Revenue % of Revenue
(US$m) 2023 2023 2022 2022
Other administrative costs 86.4 12.0% 70.0 12.5%
Depreciation and amortisation 33.4 4.6% 20.3 3.6%
Adjusting items 7.8 1.1% 23.8 4.2%
Total administrative expense 127.6 17.7% 114.1 20.3%
Adjusted EBITDA
Adjusted EBITDA was US$369.9 million in the year ended 31 December 2023
compared to US$282.8 million in the year ended 31 December 2022. The increase
in Adjusted EBITDA between periods is primarily attributable to the changes in
revenue, cost of sales and administrative expenses, as discussed above. Please
refer to the Alternative Performance Measures section for more details and
Note 4 of the Group Financial Statements for a reconciliation of aggregate
Adjusted EBITDA to loss before tax.
Other gains and losses
Other gains and losses recognised in the year ended 31 December 2023 was a
loss of US$6.1 million, compared to a loss of US$51.4 million in the year
ended 31 December 2022. This is mainly related to the impacts of
hyperinflation accounting in 2023 in Ghana and the non-cash US$2.1 million
(2022: US$51.5 million) fair value movement of the embedded derivative
valuation of the put and call options embedded within the terms of the Senior
Notes. See Note 26 of the Group Financial Statements.
Finance costs
Finance costs of US$253.5 million for the year ended 31 December 2023 included
interest costs of US$150.2 million which reflects interest on the Group's debt
instruments, fees on available Group and local term loans and revolving credit
facilities (RCF), withholding taxes and amortisation. The increase in interest
costs from US$115.4 million in 2022 to US$150.2 million in 2023 is primarily
due to a full year of interest costs for the Oman term loan. The increase in
non-cash foreign exchange differences from US$52.3 million in 2022 to US$86.1
million in 2023 primarily reflects fluctuations of the Malawian Kwacha,
Ghanaian Cedi and Tanzanian Shilling which declined against the US Dollar
during the year.
Year ended 31 December
(US$m) 2023 2022
Foreign exchange differences 86.1 52.3
Interest costs 150.2 115.4
Interest costs on lease liabilities 25.0 25.5
Gain on refinancing (7.8) -
Total finance costs 253.5 193.2
Tax expense
Tax expense was US$0.4 million credit in the year ended 31 December 2023 as
compared to US$8.9 million expense in the year ended 31 December 2022. The
decrease in overall tax charge is predominantly driven by the recognition of
previously unrecognised deferred tax assets in profitable territories.
Though entities in Congo Brazzaville and Senegal have continued to be
loss-making for tax purposes, minimum income taxes or/and asset based taxes
were levied, as stipulated by law in these jurisdictions. DRC, Ghana,
Madagascar, Tanzania and two entities in South Africa are profitable for tax
purposes and subject to corporate income tax thereon.
Contracted revenue
The following table provides our total undiscounted contracted revenue by
country as of 31 December 2023 for each year from 2024 to 2028, with local
currency amounts converted at the applicable average rate for US Dollars for
the year ended 31 December 2023 held constant. Our contracted revenue
calculation for each year presented assumes:
· no escalation in fee rates;
· no increases in sites or tenancies other than our committed
tenancies;
· our customers do not utilise any cancellation allowances set
forth in their MLAs;
· our customers do not terminate MLAs prior their current term; and
· no automatic renewal.
Year ended 31 December
(US$m) 2024 2025 2026 2027 2028
Middle East & North Africa 52.5 49.6 49.6 49.6 49.6
East & West Africa 278.3 287.4 247.2 231.8 227.8
Central & Southern Africa 362.1 334.7 300.8 271.5 256.6
Total 692.9 671.7 597.6 552.9 534.0
The following table provides our total undiscounted contracted revenue by key
customers as of 31 December 2023 over the life of the contracts with local
currency amounts converted at the applicable average rate for US Dollars for
the year ended 31 December 2023 held constant. As at 31 December 2023, total
contracted revenue was US$5.4 billion (2022: US$4.7 million), of which 99% is
from multinational MNOs, with an average remaining life of 7.8 years (2022:
7.6 years).
(US$m) Total committed revenues % of total committed
revenues
Multinational MNOs 5,363.2 99.0%
Other 54.0 1.0%
Total 5,417.2 100.0%
Management cash flow
Year ended 31 December
(US$m) 2023 2022
Adjusted EBITDA 369.9 282.8
Less: (35.5) (20.3)
Maintenance and corporate capital additions
Payments of lease liabilities(1) (45.3) (40.8)
Corporate taxes paid (20.9) (20.3)
Portfolio free cash flow(2) 268.2 201.4
Cash conversion %(3)
Net payment of interest(4)
73% 71%
(127.9) (97.7)
Net change in working capital(5) (47.1) (86.5)
Levered portfolio free cash flow(6) 93.2 17.2
Discretionary capital additions(7) (167.5) (745.0)
Cash paid for exceptional and one-off items, and proceeds on disposal (6.8) 7.2
assets(8)
Free cash flow (81.1) (720.6)
Transactions with non-controlling interests - (11.8)
Net cash flow from financing activities(9) 75.7 327.4
Net cash flow (5.4) (405.0)
Opening cash balance 119.6 528.9
Foreign exchange movement (7.6) (4.3)
Closing cash balance 106.6 119.6
1 Payment of lease liabilities comprises interest and principal
repayments of lease liabilities.
2 Refer to reconciliation of cash generated from operating
activities to portfolio free cash flow in the Alternative Performance Measures
section.
3 Cash conversion % is calculated as portfolio free cash flow
divided by Adjusted EBITDA.
4 Net payment of interest corresponds to the net of 'Interest paid'
(including withholding tax) and 'Interest received' in the Consolidated
Statement of Cash Flow, excluding interest payments on lease liabilities.
5 Working capital means the current assets less the current
liabilities for the Group. Net change in working capital corresponds to
movements in working capital, excluding cash paid for exceptional and one-off
items and including movements in working capital related to capital
expenditure.
6 Levered portfolio free cash flows have been represented based on
the updated structure of the management cash flow. It is defined as portfolio
free cash flow less net payment of interest and net change in working capital.
7 Discretionary capital additions includes acquisition, growth and
upgrade capital additions.
8 Cash paid for exceptional and one-off items and proceeds on
disposal of assets includes project costs, deal costs, deposits in relation to
acquisitions, proceeds on disposal of assets and non-recurring taxes.
9 Net cash flow from financing activities includes gross proceeds
from issue of equity share capital, share issue costs, loan drawdowns, loan
issue costs, repayment of loan and capital contributions in the Consolidated
Statement of Cash Flows.
Cash conversion has increased slightly from 71% for the year ended 31 December
2022 to 73% for the year ended 31 December 2023. This is driven by Adjusted
EBITDA growing faster than corporate taxes paid and payment of lease
liabilities.
Net change in working capital decreased by US$39.4 million year-on-year due to
timing of cash payments to suppliers and improved collections from customers.
The Group's Consolidated Statement of Cash Flows is set out on page 135 of the
Annual Report.
Cash flows from operations, investing and financing activities
Cash generated from operations increased by 64.9% to US$318.5 million (2022:
US$193.2 million) driven by higher Adjusted EBITDA, lower deal costs and
movements in working capital. Net cash used in investing activities was
US$195.8 million for the year ended 31 December 2023, down from US$381.5
million in the prior year. The decrease was primarily due to lower organic and
inorganic site growth in 2023. Net cash generated from financing activities
during the year was US$43.2 million, which primarily related to loan drawdowns
net of loan repayments.
Cash and cash equivalents
Cash and cash equivalents decreased by US$13.0 million year-on-year to
US$106.6 million at 31 December 2023 (2022: US$119.6 million) as described
above.
Capital expenditure
The following table shows our capital expenditure additions by category during
the year ended 31 December:
2023 2022
US$m % of total capex US$m % of total capex
Acquisition 20.2 10.0% 557.4 72.9%
Growth 112.5 55.4% 171.2 22.4%
Upgrade 34.8 17.1% 16.3 2.1%
Maintenance 31.3 15.4% 17.9 2.3%
Corporate 4.2 2.1% 2.5 0.3%
Total 203.0 100.0% 765.3 100.0%
Acquisition capex in the year ended 31 December 2023 relates primarily to
deferred consideration in Senegal.
Trade and other receivables
Trade and other receivables increased from US$228.1 million at 31 December
2022 to US$297.2 million at 31 December 2023, primarily due to increases from
new markets entered, organic growth, customer billing profile and contract
assets. Debtor days decreased from 57 days in 2022 to 47 days in 2023 (see
Note 15).
Trade and other payables
Trade and other payables increased from US$239.4 million at 31 December 2022
to US$301.7 million at 31 December 2023. The increase is primarily driven by
an increase in deferred income, as a result of the timing of customer
billings, and an increase in accruals due to the timing of capital expenditure
and other purchases around year-end.
Loans and borrowings
As of 31 December 2023 and 31 December 2022, the Group's outstanding loans and
borrowings, excluding lease liabilities, were US$1,650.3 million (net of issue
costs) and US$1,571.6 million respectively, and net leverage was 4.4x and 5.1x
respectively. The year-on-year change in indebtedness largely reflects a
US$325 million partial tender of the Group's Senior Notes due 2025 and US$65
million repayment of the Group's previous term loan using proceeds from new
banking facilities completed during the year. Further details of loans and
borrowings are provided in Note 20 of the Group Financial Statements.
Principal risks and uncertainties
˄ Risk increasing ˅ Risk decreasing ~ No change ± New risk
Risk Category Description Mitigation Status
1 Major quality failure or breach of contract - Reputational The Group's reputation and profitability could be damaged if the Group fails - Continued skills development and training programmes for the project and ~
to meet its customers' operational specifications, quality standards or operational delivery team;
- Financial delivery schedules.
- Detailed and defined project scoping and lifecycle management through
A substantial portion of Group revenues is generated from a limited number of project delivery and transfer to ongoing operations;
large customers. The loss of any of these customers would materially affect
the Group's finances and growth prospects. - Contract and dispute management processes in place;
Many of the Group's customer tower contracts contain liquidated damage - Continuous monitoring and management of customer relationships; and
provisions, which may require the Group to make unanticipated and potentially
significant payments to its customers. - Use of long-term contracting with minimal termination rights.
2 Non-compliance with laws and regulations, such as: - Compliance Non-compliance with applicable laws and regulations may lead to substantial - Constant monitoring of potential changes to laws and regulatory ~
fines and penalties, reputational damage and adverse effects on future growth requirements;
- Safety, health and environmental laws - Financial prospects.
- In-person and virtual training on safety, health and environmental matters
- Anti-bribery and corruption provisions - Reputational Sudden and frequent changes in laws and regulations, their interpretation or provided to employees and relevant third-party contractors;
application and enforcement, both locally and internationally, may require the
Group to modify its existing business practices, incur increased costs and - Ongoing refresh of compliance and related policies including specific
subject it to potential additional liabilities. details covering anti-bribery and corruption; anti-facilitation of tax
evasion, anti-money laundering;
- Compliance monitoring activities and periodic reporting requirements
introduced;
- Ongoing engagement with external lawyers and consultants and regulatory
authorities, as necessary, to identify and assess changes in the regulatory
environment;
- Third Party Code of Conduct communicated and annual certifications required
of all high and medium risk third parties;
- Supplier audits and performance reviews;
- ISO certifications maintained;
- Regionalisation of the Compliance function and recruitment of additional
resource;
- Internal Audit function adding additional checks and balances; and
- Supplier/Partner forums continuing to be rolled out to all OpCos to build
further third-party capability and competency.
3 Economic and political instability - Operational A slowdown in the growth of, or a reduction in demand for, wireless - Ongoing market analysis and business intelligence gathering activities; ~
communication services could adversely affect the demand for communication
- Financial sites and tower space and could have a material adverse effect on the Group's - Market share growth strategy in place;
financial condition and results of operations.
- Close monitoring of any potential risks that may affect operations; and
There are significant risks related to political instability (including
elections), security, ethnic, religious and regional tensions in each market - Business continuity and contingency plans in place and tested to respond to
where the Group has operations. any emergency situations.
4 Significant exchange rate and interest rate movements - Financial Fluctuations in, or devaluations of, local market currencies or sudden - USD - and EURO-pegged contracts; ~
interest rate movements where the Group operates could have a significant and
negative financial impact on the Group's business, financial condition and - 'Natural' hedge of local currencies (revenue vs opex);
results. Such impacts may also result from any adverse effects such movements
have on Group third-party customers and strategic suppliers. If interest rates - Ongoing review of exchange rate differences and interest rate movements;
increase materially, the Group may struggle to meet its debt repayments.
- Fixed rate debt/swaps in place
This may also negatively affect availability of foreign currency in local
markets and the ability of the Group to upstream cash. - Maintain a prudent level of leverage;
- Manage cash flows; and
- Regular upstream of cash with the majority of cash held in hard currency
i.e. US Dollar and Sterling at Group.
5 Non-compliance with permit requirements - Operational The Group may not always operate with the necessary required approvals and - Inventory of required licences and permits maintained for each operating ~
permits for some of its tower sites, particularly in the case of existing company;
tower portfolios acquired from a third party. Vagueness, uncertainty and
changes in interpretation of regulatory requirements are frequent and often - Compliance registers maintained with any potential non-conformities
without warning. As a result, the Group may be subject to potential identified by the relevant government authority with a timetable for
reprimands, warnings, fines and penalties for non-compliance with the relevant rectification;
permitting and approval requirements.
- Periodic engagement with external lawyers and advisors and participation in
industry groups; and
- Active and ongoing engagement with relevant regulatory authorities to
proactively identify, assess and manage actual and potential regulation
changes.
6 Loss of key personnel - People The Group's successful operational activities and growth is closely linked to - Talent identification and succession-planning exit for key roles; ~
the knowledge and experience of key members of senior management and highly
skilled technical employees. The loss of any such personnel, or the failure to - Competitive benchmarked performance related remuneration plans; and
attract, recruit and retain equally high calibre professionals could adversely
affect the Group's operations, financial condition and strategic growth - Staff performance and development/support plans.
prospects.
7 Technology risk - Strategic Advances in technology that enhance the efficiency of wireless networks and - Strategic long-term planning; ~
potential active sharing of wireless spectrum may significantly reduce or
negate the need for tower-based infrastructure or services. This could reduce - Business intelligence;
the need for telecommunications operators to add more tower-based antenna
equipment at certain tower sites, leading to a potential decline in tenants, - Exploring alternatives, e.g. solar power technologies
service needs and decreasing revenue streams.
- Continuously improving product offering to enable adaptation to new wireless
Examples of such new technologies may include spectrally efficient technologies;
technologies that could potentially relieve certain network capacity problems
or complementary voice over internet protocol access technologies that could - Applying for new licences to provision active infrastructure services in
be used to offload a portion of subscriber traffic away from the traditional certain markets; and
tower-based networks.
- Technology committee in place with Board involvement/oversight.
8 Failure to remain competitive - Financial Competition in, or consolidation of, the telecommunications tower industry may - KPI monitoring and benchmarking against competitors; ~
create pricing pressures that materially and adversely affect the Group.
- Total cost of ownership (TCO) analysis for
MNOs to run towers;
- Fair and competitive pricing structure;
- Business intelligence and review of competitors' activities;
- Strong tendering team to ensure high win/ retention rate; and
- Continuous capex investment to ensure that the Group can facilitate customer
needs quickly.
9 Failure to integrate new lines of business in new markets - Strategic Multiple risks exist with entry into new markets and new lines of business. - Pre-acquisition due diligence conducted with the assistance of external ~
Failure to successfully manage and integrate operations, resources and advisors with specific geographic and industry expertise;
- Financial technology could have material adverse implications for the Group's overall
growth strategy and negatively impact its financial position and organisation - Ongoing monitoring activities post acquisition/agreement;
- Operational culture.
- Detailed management, operations and technology integration plans;
- Ongoing measurement of performance vs. plan and Group strategic objectives;
and
- Implementation of a regional CEO and support function governance and
oversight structure.
10 Tax disputes - Compliance Our operations are based in certain countries with complex, frequently - Frequent interaction and transparent communication with relevant ~
changing and bureaucratic and administratively burdensome tax regimes. This governmental authorities and representatives;
- Financial may lead to significant disputes around interpretation and application of tax
rules and may expose us to significant additional taxation liabilities. - Engagement of external legal and tax advisors to advise on legislative/tax
- Operational code changes and assessed liabilities or audits;
- Reputational - Engagement with trade associations and industry bodies and other
international companies and organisations facing similar issues;
- Defending against unwarranted claims; and
- Strengthening of the Group Tax team and continued recruitment of in-house
tax expertise at both Group and OpCo levels.
11 Operational resilience - Strategic The ability of the Group to continue operations is heavily reliant on third - Ongoing enhancements to data security and protection measures with ~
parties, the proper functioning of its technology platforms and the capacity third-party expert support;
- Reputational of its available human resources.
- Additional investment in IT resource and infrastructure to increase
- Operational Failure in any of these three areas could severely affect its operational automation and workflow of business-as-usual activities;
capabilities and ability to deliver on its strategic objectives.
- Third-party due diligence, ongoing monitoring and regular supplier
performance reviews;
- Alternative sources of supply are previously identified to deal with
potential disruption to the strategic supply chain;
- Ongoing review and involvement of the human resources department at an early
stage in organisation design and development activities; and
- Buffer stock maintained of critical materials for site delivery.
12 Pandemic risk - Operational In addition to the risk to the health and safety of our employees and - Health and safety protocols established and implemented; ~
contractors, the ongoing impact of Covid-19 or other such pandemic could
- Financial materially and adversely affect the financial and operational performance of - Business continuity plans implemented with ongoing monitoring;
the Group across all of its activities. The effects of a pandemic may also
disrupt the achievement of the Group's strategic plans and growth objectives - Financial modelling, scenario building and stress testing;
and place additional strain on its technology infrastructure. There is also an
increased risk of litigation due to the potential effects of a pandemic on - Continuous scanning of the external environment;
fulfilment of contractual obligations.
- Increased fuel purchases; and
- Review of contractual terms and conditions.
13 Cyber security risk - Operational We are increasingly dependent on the performance and effectiveness of our IT - Ongoing implementation and enhancement of security and remote access ~
systems. Failure of our key systems, exposure to the increasing threat of processes, policies and procedures;
- Financial cyber attacks and threats, loss or theft of sensitive information, whether
accidentally or intentionally, expose the Group to operational, strategic, - Regular security testing regime established, validated by independent third
- Reputational reputational and financial risks. These risks are increasing due to greater parties;
interconnectivity, reliance on technology solutions to drive business
performance, use of third parties in operational activities and continued - Annual staff training and awareness programme in place;
adoption of remote working practices.
- Security controls based on industry best practice frameworks, such as
Cyber attacks are becoming more sophisticated and frequent and may compromise National Cyber
sensitive information of the Group, its employees, customers or other third
parties. Failure to prevent unauthorised access or to update processes and IT Security Centre (NCSC) (www.ncsc.gov.uk/),
security measures may expose the Group to potential fraud, inability to
conduct its business, damage to customers as well as regulatory investigations National Institute of Standards and Technology (NIST) (www.nist.gov/), and
and associated fines and penalties. validated through internal audit assessments;
- Specialist security third parties engaged to assess cyber risks and
mitigation plans;
- Incident management and response processes aligned to ITIL® best practice -
identification, containment, eradication, recovery and lessons learned;
- New supplier risk management assessments and due diligence carried out; and
- ISO 27001 (Information Security) and Cyber
Essentials certification obtained during 2023.
14 Climate change - Operational Climate change is a global challenge and therefore critical to our business, - Carbon reduction intensity target to 2030 with an ambition to decarbonise ~
our investors, our customers and other stakeholders. Regulatory requirements our emissions to net zero (90% reduction in scope 1, 2, 3 emissions);
- Financial and expectations of compliance with best practice are also evolving rapidly. A
failure to anticipate and respond appropriately and sufficiently to climate - Monitoring changes to carbon legislation and regulations in all our markets;
- Reputational risks or opportunities could lead to an increased footprint, disruption to our
operations and reputational damage. - Investing in solutions that reduce carbon footprint and reliance on diesel
such as installing hybrid and solar solutions and connecting to grid power
Business risks we may face as a result of climate change relate to physical where possible;
risks to our assets, operations and personnel (i.e. events arising due to the
frequency and severity of extreme weather events or shifts in climate - Additional capital expenditure in carbon reduction innovation;
patterns) and transition risks (i.e. economic, technology or regulatory
changes related to the move towards a low-carbon economy). - Factoring emissions and climate risk into strategy and growth plans. All
operating companies' budgets and forecasts include calculated emissions to
Governments in our operating markets, in addition to increasing qualitative evaluate trends vs.
and quantitative disclosure requirements, may take action to address climate
change such as the introduction of a carbon tax or mandate Net Zero our 2030 carbon target;
requirements which could impact our business through higher costs or reduced
flexibility of operations. - Reporting in alignment with TCFD recommendations and improving our
understanding of the financial and operational impacts of climate-related
risks and opportunities on our business;
- Development of a new Group climate risk register covering both physical and
transition risks for all OpCos; and
- New Geographic Information System (GIS) modelling showing the impact of
weather patterns on our tower portfolio and also the impact on key access
points (e.g. critical roads).
Note: Principal risks identified, may combine and amalgamate elements of
individual risks included in the detailed Group risk register.
Financial Statements
Consolidated Income Statement
For the year ended 31 December
Year ended 31 December
(US$m) 2023 2022
Revenue 721.0 560.7
Cost of sales (450.4) (365.9)
Gross profit 270.6 194.8
Administrative expenses (127.6) (114.1)
Gain/(loss) on disposal of property, plant and equipment 3.1 (0.4)
Operating profit 146.1 80.3
Interest receivable 1.3 1.8
Other gains and losses (6.1) (51.4)
Finance costs (253.5) (193.2)
Loss before tax (112.2) (162.5)
Tax expense 0.4 (8.9)
Loss after tax (111.8) (171.4)
Loss attributable to: (100.1) (171.5)
Owners of the Company
Non-controlling interests (11.7) 0.1
Loss for the year (111.8) (171.4)
Loss per share: (10) (16)
Basic loss per share (cents)
Diluted loss per share (cents) (10) (16)
All activities relate to continuing operations.
The accompanying Notes form an integral part of these Financial Statements.
Consolidated Statement of Other Comprehensive Income
For the year ended 31 December
2023 2022
US$m US$m
Loss after tax for the year (111.8) (171.4)
Other comprehensive (loss)/gain: (1.8) (5.5)
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of foreign operations
Cash flow reserve (loss)/gain (14.7) -
Total comprehensive loss for the year, net of tax (128.3) (176.9)
Total comprehensive loss attributable to:
Owners of the Company (117.1) (176.4)
Non-controlling interests (11.2) (0.5)
Total comprehensive loss for the year (128.3) (176.9)
The accompanying Notes form an integral part of these Financial Statements.
Consolidated Statement of Financial Position
As at 31 December
Assets Note 2023 2022
US$m US$m
(Restated)(1)
Non-current assets 11 546.4 575.2
Intangible assets
Property, plant and equipment 12 918.3 907.9
Right-of-use assets 13 254.0 226.5
Deferred tax asset 10 13.6 18.7
Derivative financial assets 26 6.3 2.8
1,738.6 1,731.1
Current assets 14 12.7 14.6
Inventories
Trade and other receivables 15 297.2 228.1
Prepayments 16 42.6 45.7
Cash and cash equivalents 17 106.6 119.6
459.1 408.0
Total assets 2,197.7 2,139.1
Equity and liabilities 18 13.5 13.5
Equity
Share capital
Share premium 18 105.6 105.6
Other reserves (101.7) (87.0)
Convertible bond reserves 20 52.7 52.7
Share-based payments reserves 25 25.5 23.2
Treasury shares 18 (1.8) (1.1)
Translation reserve (56.9) (93.5)
Retained earnings (105.2) (5.1)
Equity attributable to owners (68.3) 8.3
Non-controlling interest 29.8 41.0
Total equity (38.5) 49.3
Liabilities
Current liabilities 19 301.7 239.4
Trade and other payables
Short-term lease liabilities 21 35.5 34.1
Loans 20 37.7 19.9
374.9 293.4
Non-current liabilities 25.9 50.1
Deferred tax liabilities
Long-term lease liabilities 21 203.9 191.9
Derivative financial liabilities 26 14.6 -
Loans 20 1,612.6 1,551.7
Minority interest buyout liability 4.3 2.7
1,861.3 1,796.4
Total Liabilities 2,236.2 2,089.8
Total equity and liabilities 2,197.7 2,139.1
1 Restatement on finalisation of acquisition accounting.
The accompanying Notes form an integral part of these Financial Statements.
These Financial Statements were approved and authorised for issue by the Board
on 13 March 2024 and signed on its behalf by:
Tom Greenwood Manjit Dhillon
Consolidated Statement of Changes in Equity
For the year ended 31 December
Note Share Share Other Treasury Share- based Convertible Translation Retained Attributable Non- controlling Total equity
capital
premium US$m
reserves US$m
shares
payments
bond
reserve US$m
earnings
to the owners
interest (NCI) US$m
US$m
reserves
reserves
US$m
of the
US$m US$m
US$m
US$m
Company US$m
Balance at 1 January 2022 13.5 105.6 (87.0) (1.1) 19.6 52.7 (88.6) 153.3 168.0 - 168.0
Loss for the year - - - - - - - (171.5) (171.5) 0.1 (171.4)
Other comprehensive loss - - - - - - (4.9) - (4.9) (0.6) (5.5)
Total comprehensive loss for the year - - - - - - (4.9) (171.5) (176.4) (0.5) (176.9)
Transactions with owners: - - - - - - - 13.1 13.1 - 13.1
Issue of share capital
Non-controlling interests 30 - - - - - - - - - 48.1 48.1
Share-based payments 25 - - - - 3.6 - - - 3.6 - 3.6
Buyout obligation liability - - - - - - - - - (6.6) (6.6)
Balance at 31 December 2022 13.5 105.6 (87.0) (1.1) 23.2 52.7 (93.5) (5.1) 8.3 41.0 49.3
Loss for the year - - - - - - - (100.1) (100.1) (11.7) (111.8)
Movement in cash flow hedge reserve - - (14.7) - - - - - (14.7) - (14.7)
Other comprehensive loss - - - - - - (2.3) - (2.3) 0.5 (1.8)
Total comprehensive loss for the year - - (14.7) - - - (2.3) (100.1) (117.1) (11.2) (128.3)
Transactions with owners: 25 - - - - 1.6 - - - 1.6 - 1.6
Share-based payments
Transfer of treasury shares - - - (0.7) 0.7 - - - - - -
Translation of hyperinflationary results - - - - - - 38.9 - 38.9 - 38.9
Balance at 31 December 2023 13.5 105.6 (101.7) (1.8) 25.5 52.7 (56.9) (105.2) (68.3) 29.8 (38.5)
Share-based payments reserves relate to share options awarded. See Note 25.
Translation reserve relates to the translation of the Financial Statements of
overseas subsidiaries into the presentational currency of the Consolidated
Financial Statements.
Included in other reserves is the merger accounting reserve which arose on
Group reorganisation in 2019 and is the difference between the carrying value
of the net assets acquired and the nominal value of the share capital and the
cash flow hedge reserve.
The accompanying Notes form an integral part of these Financial Statements.
Consolidated Statement of Cash Flows
For the year ended 31 December
Note 2023 2022
US$m US$m
Cash flows from operating activities (112.2) (162.5)
Loss for the year before tax
Adjustments for: 24 6.1 51.4
Other gains and (losses)
Finance costs 9 253.5 193.2
Interest receivable 8 (1.3) (1.8)
Depreciation and amortisation 11-13 219.0 178.5
Share-based payments and long-term incentive plans 25 3.7 4.5
(Loss)/Gain on disposal of property, plant and equipment (3.1) 0.4
Operating cash flows before movements in working capital 365.7 263.7
Movement in working capital:
(Increase) in inventories (3.1) (3.3)
(Increase) in trade and other receivables (88.1) (79.0)
(Increase) in prepayments (5.1) (2.0)
Increase in trade and other payables 49.1 13.8
Cash generated from operations 318.5 193.2
Interest paid (150.4) (121.8)
Tax paid 10 (20.9) (20.3)
Net cash generated from operating activities 147.2 51.1
Cash flows from investing activities
Payments to acquire property, plant and equipment (191.6) (244.4)
Payments to acquire intangible assets (4.8) (3.4)
Acquisition of subsidiaries (net of cash acquired) 31 - (135.6)
Proceeds on disposal of property, plant and equipment (0.3) 0.1
Interest received 0.9 1.8
Net cash used in investing activities (195.8) (381.5)
Cash flows from financing activities
Transactions with non-controlling interests - 11.8
Loan drawdowns 489.6 280.6
Loan issue costs (12.1) (7.2)
Repayment of loan (401.8) (341.0)
Repayment of lease liabilities (32.5) (18.8)
Net cash generated/(used in) from financing activities 43.2 (74.6)
Net (decrease) in cash and cash equivalents (5.4) (405.0)
Foreign exchange on translation movement (7.6) (4.3)
Cash and cash equivalents at 1 January 119.6 528.9
Cash and cash equivalents at 31 December 106.6 119.6
The accompanying Notes form an integral part of these Financial Statements.
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
1. Statement of compliance and presentation of financial statements
Helios Towers plc (the 'Company'), together with its subsidiaries
(collectively, 'Helios', or the 'Group'), is an independent tower company,
with operations across nine countries. Helios Towers plc is a public limited
company incorporated and domiciled in the UK, and registered under the laws of
England & Wales under company number 12134855 with its registered address
at 10th Floor, 5 Merchant Square West, London, W2 1AS, United Kingdom. In
October 2019, the ordinary shares of Helios Towers plc were admitted to the
premium listing segment of the Official List of the UK Financial Conduct
Authority and trade on the London Stock Exchange Plc's main market for listed
securities.
The Company and entities controlled by the Company are disclosed on page 172
of the Annual Report. The principal accounting policies adopted by the Group
are set out in Note 2. These policies have been consistently applied to all
periods presented.
2(a). Accounting policies
Basis of preparation
The Group's Financial Statements are prepared in accordance with International
Financial Reporting Standards as adopted by the United Kingdom (IFRSs), taking
into account IFRS Interpretations Committee (IFRS IC) interpretations and
those parts of the Companies Act 2006 applicable to companies reporting under
IFRS.
The Financial Statements have been prepared on the historical cost basis,
except for the revaluation of certain financial instruments that are measured
at fair value at the end of each reporting period and for the application of
IAS 29 'Financial Reporting in Hyperinflationary Economies' for the Group's
entities reporting in Ghanaian Cedi. The Financial Statements are presented in
United States Dollars (US$) and rounded to the nearest hundred thousand
(US$0.1 million) except when otherwise indicated. Comparatives are updated
where appropriate.
The principal accounting policies adopted are set out below.
The financial information included within this Preliminary Announcement does
not constitute the Company's statutory Financial Statements for the years
ended 31 December 2023 or 31 December 2022 within the meaning of s435 of the
Companies Act 2006, but is derived from those Financial Statements. Statutory
Financial Statements for the year ended 31 December 2022 have been delivered
to the Registrar of Companies and those for the year ended 31 December 2023
will be delivered to the Registrar of Companies during April 2024. The auditor
has reported on those Financial Statements; their reports were unqualified,
did not draw attention to any matters by way of emphasis and did not contain
statements under s498(2) or (3) of the Companies Act 2006. While the financial
information included in this Preliminary Announcement has been prepared in
accordance with the recognition and measurement criteria of International
Financial Reporting Standards ("IFRSs") adopted pursuant to IFRSs as issued by
the United Kingdom, this announcement does not itself contain sufficient
information to comply with IFRSs. The Company expects to publish full
Financial Statements that comply with IFRSs during March or April 2024. Page
number references in this document refer to the Group's 2023 Annual Report.
Basis of consolidation
The Consolidated Financial Statements incorporate the Financial Statements of
the Company and entities controlled by the Company (its subsidiaries) made up
to 31 December each year. Control is achieved when the Company:
- has the power over the investee;
- is exposed, or has rights, to variable return from its involvement with
the investee; and
- has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the
subsidiary and ceases when the Company loses control of the subsidiary.
Specifically, the results of subsidiaries acquired or disposed of during the
year are included in the consolidated statement of profit or loss and other
comprehensive income from the date the Company gains control until the date
when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed
to the owners of the Company and to the non-controlling interests. Total
comprehensive income of the subsidiaries is attributed to the owners of the
Company and to the non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
Where necessary, adjustments are made to the Financial Statements of
subsidiaries to bring the accounting policies used in line with the Group's
accounting policies.
All intra-Group assets and liabilities, equity, income, expenses and cash
flows relating to transactions between the members of the Group are eliminated
on consolidation.
Non-controlling interests in subsidiaries are identified separately from the
Group's equity therein. Those interests of non-controlling shareholders that
have present ownership interests entitling their holders to a proportionate
share of net assets upon liquidation may initially be measured at fair value
or at the non-controlling interests' proportionate share of the fair value of
the acquiree's identifiable net assets. The choice of measurement is made on
an acquisition-by-acquisition basis. Other non-controlling interests are
initially measured at fair value. Subsequent to acquisition, the carrying
amount of non-controlling interests is the amount of those interests at
initial recognition plus the non-controlling interests' share of subsequent
changes in equity.
Changes in the Group's interests in subsidiaries that do not result in a loss
of control are accounted for as equity transactions. The carrying amount of
the Group's interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the subsidiaries. Any
difference between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received is
recognised directly in equity and attributed to the owners of the Company.
Going concern
The Directors believe that the Group is well placed to manage its business
risks successfully, despite the current uncertain economic outlook in the
wider economy. The Group's forecasts and projections, taking account of
possible changes in trading performance, show that the Group should remain
adequately liquid and should operate within the covenant levels of its debt
facilities (Note 20).
As part of their regular assessment of the Group's working capital and
financing position, the Directors have prepared a detailed trading and cash
flow forecast for a period which covers at least 12 months after the date of
approval of the Consolidated Financial Statements, together with sensitivities
and a 'reasonable worst case' stress scenario. In assessing the forecasts, the
Directors have considered:
- trading and operating risks presented by the conditions in the operating
markets;
- the impact of macroeconomic factors, particularly inflation, interest
rates and foreign exchange rates;
- climate change risks and initiatives, including the Group's Project 100
initiative;
- the availability of the Group's funding arrangements, including loan
covenants and non-reliance on facilities with covenant restrictions in more
extreme downside scenarios;
- the status of the Group's financial arrangements;
- progress made in developing and implementing cost reduction programmes,
climate change considerations and initiatives and operational improvements;
and
- mitigating actions available should business activities fall behind
current expectations, including the deferral of discretionary overheads and
other expenditures.
In particular for the current year, the Directors have considered the impact
of energy prices and the broader inflationary environment in some of the
Group's operations. Our expansion over the last few years has resulted in us
having US$38.5m of net liabilities at year end, primarily driven by the
depreciation on acquired assets and financing costs associated with those
acquisitions. As we lease-up those assets over the next few years, we expect
the liability position to reverse. Our net current assets at year end remain
strong at US$84.2m.
Based on the foregoing considerations, the Directors continue to consider it
appropriate to adopt the going concern basis of accounting in preparing the
Consolidated Financial Statements.
New accounting policies in 2023
In the current financial year, the Group has adopted the following new and
revised Standards, Amendments and Interpretations. Their adoption has not had
a material impact on the amounts reported in these Financial Statements:
- IFRS 17: Insurance contracts, Amendments to IAS 8: Definition of
Accounting Estimates, Amendments to IAS 12: Deferred Tax related to Assets and
Liabilities arising from a Single Transaction and Amendments to IAS 1 and IFRS
Practice Statement 2: Disclosure of Accounting Policies.
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The
consideration transferred in a business combination in accordance with IFRS 3
Business Combinations (IFRS 3) is measured at fair value, which is calculated
as the sum of the acquisition-date fair values of assets transferred by the
Group, liabilities incurred by the Group to the former owners of the acquiree
and the equity interest issued by the Group in exchange for control of the
acquiree. The identifiable assets, liabilities and contingent liabilities
(identifiable net assets) are recognised at their fair value at the date of
acquisition. Acquisition-related costs are expensed as incurred and included
in administrative expenses.
At the acquisition date, the identifiable assets acquired and the liabilities
assumed are recognised at their fair value at the acquisition date, except
that:
- uncertain tax positions and deferred tax assets or liabilities and assets
or liabilities related to employee benefit arrangements are recognised and
measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits
respectively;
- liabilities or equity instruments related to share-based payment
arrangements of the acquiree or share-based payment arrangements of the Group
entered into to replace share-based payment arrangements of the acquiree are
measured in accordance with IFRS 2 Share-Based Payments at the acquisition
date (see below); and
- assets (or disposal groups) that are classified as held for sale in
accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations are measured in accordance with that Standard.
When the Group acquires a business, it assesses the financial assets and
liabilities assumed for appropriate classification and designation in
accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. Goodwill is initially measured at cost,
being the excess of the aggregate of the consideration transferred, the amount
of any non-controlling interest in the acquiree, and the fair value of the
acquirer's previously held equity interest in the acquired (if any) over the
net of the fair values of acquired assets and liabilities assumed. If the fair
value of the net assets acquired is in excess of the aggregate consideration
transferred, the gain is recognised in profit or loss. Goodwill is capitalised
as an intangible asset with any subsequent impairment in carrying value being
charged to the consolidated statement of profit or loss.
If the initial accounting for a business combination is incomplete by the end
of the reporting period in which the combination occurs, the Group reports
provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (a period
of no more than 12 months), or additional assets or liabilities are
recognised, to reflect new information obtained about facts and circumstances
that existed as of the acquisition date that, if known, would have affected
the amounts recognised as of that date.
When the consideration transferred by the Group in a business combination
includes a contingent consideration arrangement, the contingent consideration
is measured at its acquisition date fair value and included as part of the
consideration transferred in a business combination. Changes in fair value of
the contingent consideration that qualify as measurement period adjustments
are adjusted retrospectively, with corresponding adjustments against goodwill.
The carrying value of contingent consideration is the present value of those
cash flows (when the effect of the time value of money is material).
Measurement period adjustments are adjustments that arise from additional
information obtained during the 'measurement period' (which cannot exceed one
year from the acquisition date) about facts and circumstances that existed at
the acquisition date. Subsequently, changes in the fair value of the
contingent consideration that do not qualify as measurement period adjustments
are recognised in the income statement, when contingent consideration amounts
are remeasured to fair value at subsequent reporting dates.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. For the purpose of impairment testing, goodwill acquired in
a business combination is, from the acquisition date, allocated to the
cash-generating units (CGU) that are expected to benefit from the combination,
irrespective of whether other assets or liabilities of the acquiree are
assigned to those units.
CGUs to which goodwill has been allocated are tested for impairment annually,
or more frequently when there is an indication that the unit may be impaired.
If the recoverable amount of the CGU is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit
pro-rata based on the carrying amount of each asset in the unit. Any
impairment loss is recognised directly in profit or loss. An impairment loss
recognised for goodwill is not able to be reversed in subsequent periods. On
disposal of the relevant CGU, the attributable amount of goodwill is included
in the determination of the profit or loss on disposal.
Revenue recognition
The Group recognises revenue from the rendering of tower services provided by
utilisation of the Group's tower infrastructure pursuant to written contracts
with its customers. The Group applies the five-step model in IFRS 15 Revenue
from Contracts with Customers (IFRS 15). Prescriptive guidance in IFRS 15 is
followed to deal with specific scenarios and details of the impact of IFRS 15
on the Group's Consolidated Financial Statements are described below. Revenue
is not recognised if uncertainties over a customer's intention and ability to
pay means that collection is not probable.
On inception of the contract a 'performance obligation' is identified based on
each of the distinct goods or services promised to the customer. The
consideration specified in the contract with the customer is allocated to a
performance obligation identified based on their relative standalone selling
prices. In line with IFRS 15, the Group has one material performance
obligation, which is providing a series of distinct tower space and site
services. This performance obligation includes fees for the provision of tower
infrastructure, power escalations and tower service contracts. This is the
only material performance obligation for the Group at the balance sheet date.
Revenue from these services is recognised as the performance obligation is
satisfied over time using the time elapsed output method for each customer to
measure the Group's progress under the contract. Customers are usually billed
in advance creating deferred income which is then recognised as the
performance obligation is met over a straight-line basis. Amounts billed in
arrears are recognised as contract assets until billed.
Revenue is measured at the fair value of the consideration received or
expected to be received and represents amounts receivable for services
provided in the normal course of business, less VAT and other sales-related
taxes. Where refunds are issued to customers, they are deducted from revenue
in the relevant service period.
The entire estimated loss for a contract is recognised immediately when there
is evidence that the contract is unprofitable. If these estimates indicate
that any contract will be less profitable than previously forecasted, contract
assets may have to be written down to the extent they are no longer considered
to be fully recoverable. We perform ongoing profitability reviews of our
contracts in order to determine whether the latest estimates are appropriate.
Key factors reviewed include:
- transaction volumes or other inputs affecting future revenues which can
vary depending on customer requirements, plans, market position and other
factors such as general economic conditions;
- the status of commercial relations with customers and the implications for
future revenue and cost projections; and
- our estimates of future staff and third-party costs and the degree to
which cost savings and efficiencies are deliverable.
The direct and incremental costs of acquiring a contract including, for
example, certain commissions payable to staff or agents for acquiring
customers on behalf of the Group, are recognised as contract acquisition cost
assets in the statement of financial position when the related payment
obligation is recorded. Costs are recognised as an expense in line with the
recognition of the related revenue that is expected to be earned by the Group;
typically, this is over the customer contract period as new commissions are
payable on contract renewal.
Foreign currency translation
The individual Financial Statements of each Group company are presented in the
currency of the primary economic environment in which it operates (its
functional currency). For the purpose of the Consolidated Financial
Statements, the results and financial position of each Group company are
expressed in United States Dollars (US$), which is the functional currency of
the Company, and the presentation currency for the Consolidated Financial
Statements.
In preparing the Financial Statements of the individual companies,
transactions in currencies other than the entity's functional currency
(foreign currencies) are recognised at the rates of exchange prevailing on the
dates of the transactions. At each reporting date, monetary assets and
liabilities that are denominated in foreign currencies are retranslated at the
rates prevailing at that date. Non-monetary items carried at fair value that
are denominated in foreign currencies are translated at the rates prevailing
at the date when the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not
retranslated.
For the purpose of presenting Consolidated Financial Statements, the assets
and liabilities of the Group's foreign operations are translated at exchange
rates prevailing on the reporting date, with the exception of the Group's
Ghanaian Cedi operations, which are subject to hyperinflation accounting.
Income and expense items are translated at the average exchange rates for the
period, unless exchange rates fluctuate significantly during that period, in
which case the exchange rates at the date of transactions are used. Exchange
differences arising, if any, are recognised in other comprehensive income and
accumulated in a separate component of equity (attributed to non-controlling
interests as appropriate).
On the disposal of a foreign operation (i.e. a disposal of the Group's entire
interest in a foreign operation, or a disposal involving loss of control over
a subsidiary that includes a foreign operation, or a partial disposal of an
interest in a joint arrangement or an associate that includes a foreign
operation of which the retained interest become a financial asset), all of the
exchange differences accumulated in a separate component of equity in respect
of that operation attributable to the owners of the Company are reclassified
to profit or loss.
In addition, in relation to a partial disposal of a subsidiary that includes a
foreign operation that does not result in the Group losing control over the
subsidiary, the proportionate share of accumulated exchange differences are
re-attributed to non-controlling interests and are not recognised in profit or
loss. For all other partial disposals (i.e. partial disposals of associates or
joint arrangements that do not result in the Group losing significant
influence or joint control), the proportionate share of the accumulated
exchange differences is reclassified to profit or loss.
Hyperinflation Accounting
Ghana met the requirements to be designated as a hyperinflationary economy
under IAS 29 'Financial Reporting in Hyperinflationary Economies' in the
quarter ended 31 December 2023. The Group has therefore applied
hyperinflationary accounting, as specified in IAS 29, to its Ghanaian
operations whose functional currency is the Ghanaian Cedi.
In accordance with IAS 21 'The Effects of Changes in Foreign Exchange Rates',
comparative amounts have not been restated.
Ghanaian Cedi denominated results and non-monetary asset and liability
balances for the current financial year ended 31 December 2023 have been
revalued to their present value equivalent local currency amount as at 31
December 2023, based on an inflation index, before translation to USD at the
reporting date exchange rate of USD$1:GHS11.89.
For the Group's operations in Ghana:
- The gain or loss on net monetary assets resulting from IAS 29 application
is recognised in the consolidated income statement within other gains &
losses.
- The Group also presents the gain or loss on cash and cash equivalents as
monetary items together with the effect of inflation on operating, investing
and financing cash flows as one number in the consolidated statement of cash
flows.
- The Group has presented the IAS 29 opening balance adjustment to net
assets within currency reserves in equity. Subsequent IAS 29 equity
restatement effects and the impact of currency movements are presented within
other comprehensive income because such amounts are judged to meet the
definition of 'exchange differences'.
The inflation index in Ghana selected to reflect the change in purchasing
power was the consumer price index (CPI) issued by the Ghana Statistical
Service, which has risen by 23.2% to 200.5 (2022: 162.8) during the current
financial year.
The main impacts of the aforementioned adjustments on the consolidated
financial statements are shown below.
Year ended
31 December 2023
Increase/(Decrease)
US$m
Revenue 0.4
Operating Profit (5.8)
Loss before tax (14.0)
Non-current assets 30.8
Equity attributable to owners of the parent (27.6)
Financial assets
Financial assets within the scope of IFRS 9 are classified as financial assets
at initial recognition, as subsequently measured at amortised cost, fair value
through other comprehensive income (OCI), and fair value through profit or
loss.
The classification of financial assets at initial recognition depends on the
financial asset's contractual cash flow characteristics and the Group's
business model for managing them. The Group initially measures a financial
asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs.
In order for a financial asset to be classified and measured at amortised cost
or fair value through OCI, it needs to give rise to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.
This assessment is referred to as the SPPI test and is performed at an
instrument level.
Financial assets at fair value through profit or loss include financial assets
held for trading, financial assets designated upon initial recognition at fair
value through profit or loss, or financial assets mandatorily required to be
measured at fair value. Financial assets are classified as held for trading if
they are acquired for the purpose of selling or repurchasing in the near term.
Financial assets with cash flows that are not solely payments of principal and
interest are classified and measured at fair value through profit or loss,
irrespective of the business model. Financial assets at fair value through
profit or loss are carried in the statement of financial position at fair
value with net changes in fair value recognised in the statement of profit or
loss.
At the current reporting period the Group did not elect to classify any
financial instruments as fair value through OCI.
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is primarily derecognised (i.e.
removed from the Group's consolidated statement of financial position) when:
- the rights to receive cash flows from the asset have expired; or
- the Group has transferred its rights to receive cash flows from the asset
or has assumed an obligation to pay the received cash flows in full without
material delay to a third party.
Financial liabilities
Financial liabilities within the scope of IFRS 9 are classified, at initial
recognition, as financial liabilities at fair value through profit or loss.
All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable
transaction costs. The Group's financial liabilities include trade and other
payables and loans and borrowings.
The subsequent measurement of financial liabilities depends on their
classification, as described below:
(a) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial
liabilities held for trading and financial liabilities designated upon initial
recognition as at fair value through profit or loss. Gains or losses on
liabilities held for trading are recognised in the statement of profit or
loss. Financial liabilities designated upon initial recognition at fair value
through profit or loss are designated at the initial date of recognition, and
only if the criteria in IFRS 9 are satisfied.
(b) Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest rate
(EIR) method. Gains and losses are recognised in profit or loss when the
liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the statement of profit or loss.
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in the statement of profit or loss.
Embedded derivatives
A derivative may be embedded in a non-derivative 'host contract' such as put
and call options over loans. Such combinations are known as hybrid
instruments. If a hybrid contract contains a host that is a financial asset
within the scope of IFRS 9, then the relevant classification and measurement
requirements are applied to the entire contract at the date of initial
recognition. Should the host contract not be a financial asset within the
scope of IFRS 9, the embedded derivative is separated from the host contract,
if it is not closely related to the host contract, and accounted for as a
standalone derivative. Where the embedded derivative is separated, the host
contract is accounted for in accordance with its relevant accounting policy,
unless the entire instrument is designated at FVTPL in accordance with IFRS 9.
Hedge Accounting
The Group's activities expose it to the financial risks of changes in interest
rates which it manages using derivative financial instruments. The use of
financial derivatives is governed by the Group's policies approved by the
Board of Directors, which provide written principles on the use of financial
derivatives consistent with the Group's risk management strategy. The Group
does not use derivative financial instruments for speculative purposes.
The Group designates certain derivatives as hedges of highly probable interest
rate risks of firm commitments (cash flow hedges). Derivative financial
instruments are initially measured at fair value on the contract date and are
subsequently re-measured to fair value at each reporting date. Changes in
values of all derivatives of a financing nature are included within financing
costs in the income statement unless designated in an effective cash flow
hedge relationship when the effective portion of changes in value are deferred
to other comprehensive income. Hedge effectiveness is determined at the
inception of the hedge relationship, and through periodic prospective
effectiveness assessments to ensure that an economic relationship exists
between the hedged item and hedging instrument.
Hedge accounting is discontinued when the hedging instrument expires or is
sold, terminated, exercised or no longer qualifies for hedge accounting. When
hedge accounting is discontinued, any gain or loss recognised in other
comprehensive income at that time remains in equity and is recognised in the
income statement when the hedged transaction is ultimately recognised in the
income statement.
For cash flow hedges, when the hedged item is recognised in the income
statement, amounts previously recognised in other comprehensive income and
accumulated in equity for the hedging instrument are reclassified to the
income statement. However, when the hedged transaction results in the
recognition of a non-financial asset or a non-financial liability, the gains
and losses previously recognised in other comprehensive income and accumulated
in equity are transferred from equity and included in the initial measurement
of the cost of the non-financial asset or non-financial liability. If a
forecast transaction is no longer expected to occur, the gain or loss
accumulated in equity is recognised immediately in the income statement.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is
reported in the consolidated statement of financial position if there is a
currently enforceable legal right to offset the recognised amounts and there
is an intention to settle on a net basis, or to realise the assets and settle
the liabilities simultaneously.
Leases
The Group applies IFRS 16 Leases. The Group holds leases primarily on land,
buildings and motor vehicles used in the ordinary course of business. Based on
the accounting policy applied the Group recognises a right-of-use asset and a
lease liability at the commencement date of the contract for all leases
conveying the right to control the use of an identified asset for a period of
time. The commencement date is the date on which a lessor makes an underlying
asset available for use by a lessee.
The right-of-use assets are initially measured at cost, which comprises:
- the amount of the initial measurement of the lease liability;
- any lease payments made at or before the commencement date, less any lease
incentives received; and
- any initial direct costs incurred by the lessee.
After the commencement date the right-of-use assets are measured at cost less
any accumulated depreciation and any accumulated impairment losses and
adjusted for any remeasurement of the lease liability.
The Group depreciates the right-of-use asset from the commencement date to the
end of the lease term. The lease liability is initially measured at the
present value of the lease payments that are not paid at that date. These
include:
- fixed payments, less any lease incentives receivable.
The lease payments are discounted using the incremental borrowing rate at the
commencement of the lease contract or modification. Generally, it is not
possible to determine the interest rate implicit in the land and building
leases. The incremental borrowing rate is estimated taking account of the
economic environment of the lease, the currency of the lease and the lease
term. The lease term determined by the Group comprises:
- non-cancellable period of lease contracts;
- periods covered by an option to extend the lease if the Group is
reasonably certain to exercise that option; and - periods covered by an option
to terminate the lease if the Group is reasonably certain not to exercise that
option.
After the commencement date the Group measures the lease liability by:
- increasing the carrying amount to reflect interest on the lease liability;
- reducing the carrying amount to reflect lease payments made; and
- remeasuring the carrying amount to reflect any reassessment or lease
modifications.
Property, plant and equipment
Items of property, plant and equipment are stated at cost of acquisition or
production cost less accumulated depreciation and impairment losses, if any.
Assets in the course of construction for production, supply or administrative
purposes, are carried at cost, less any recognised impairment loss. Cost
includes material and labour and professional fees in accordance with the
Group's accounting policy, and only those costs directly attributable to
bringing the asset to the location and condition necessary for it to be
capable of operating in the manner intended by management are capitalised.
Depreciation of these assets, on the same basis as other assets, commences
when the assets are ready for their intended use. Borrowing costs are not
capitalised as assets are generally constructed in substantially less than one
year.
Freehold land is not depreciated.
Depreciation is charged so as to write off the cost of assets over their
estimated useful lives, using the straight-line method, on the following
bases:
Site assets - towers Up to 15 years
Site assets - generators 8 years
Site assets - plant & machinery 3-5 years
Fixtures and fittings 3 years
IT equipment 3 years
Motor vehicles 5 years
Leasehold improvements 5-10 years
Directly attributable costs of acquiring tower assets are capitalised together
with the towers acquired and depreciated over a period of up to 15 years in
line with the assets estimated useful lives.
An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected to arise from continued use of the
asset. Any gain or loss arising on disposal or retirement of an item of
property, plant and equipment is determined as the difference between the sale
proceeds and the carrying amount of the asset and is recognised in profit and
loss.
Intangible assets
Contract-acquired-related intangible assets with finite useful lives are
carried at cost less accumulated amortisation and accumulated impairment
losses. They are amortised on a straight-line basis over the life of the
contract.
Intangible assets acquired in a business combination and recognised separately
from goodwill are recognised initially at their fair value at the acquisition
date (which is regarded as their cost). Subsequent to initial recognition,
intangible assets acquired in a business combination are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis
as intangible assets that are acquired separately.
Amortisation is charged so as to write off the cost of assets over their
estimated useful lives, using the straight-line method, on the following
bases:
Customer contracts Amortised over their contractual lives
Customer relationships Up to 30 years
Colocation rights Amortised over their contractual lives
Right of first refusal Amortised over their contractual lives
Non-compete agreement Amortised over their contractual lives
Computer software and licences 2-3 years
An intangible asset is derecognised on disposal, or when no future economic
benefits are expected from use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured as the difference between the
net disposal proceeds and the carrying amount of the asset, are recognised in
profit or loss when the asset is derecognised. Amortisation of intangibles is
included within Administrative expenses in the Consolidated Income Statement.
Impairment of tangible and intangible assets
At each reporting date, the Directors review the carrying amounts of its
tangible and intangible assets (other than goodwill, which is tested at least
annually as described above) to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated to determine the extent of
the impairment loss (if any). For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there are separately identifiable
cash inflows (cash-generating units - 'CGUs'). Where the asset does not
generate cash flows that are independent from other assets, the Directors
estimate the recoverable amount of the CGU to which the asset belongs. The
recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or CGU) is estimated to be less than
its carrying amount, the carrying amount of the asset (or CGU) is reduced to
its recoverable amount. An impairment loss is recognised immediately in profit
or loss. Any impairment is allocated pro-rata across all assets in a CGU
unless there is an indication that a class of asset should be impaired in the
first instance or a fair market value exists for one or more assets. Once an
asset has been written down to its fair value less costs of disposal then any
remaining impairment is allocated equally among all other assets.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (CGU) is increased to the revised estimate of its recoverable amount,
but only to the extent that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss been
recognised for the asset (CGU) in prior years. Reversals are allocated
pro-rata across all assets in the CGU unless there is an indication that a
class of asset should be reversed in the first instance or a fair market value
exists for one or more assets. A reversal of an impairment loss is recognised
in the income statement immediately. An impairment loss recognised for
goodwill is never reversed in subsequent periods.
Related parties
For the purpose of these Financial Statements, parties are considered to be
related to the Group if they have the ability, directly or indirectly to
control the Group or exercise significant influence over the Group in making
financial or operating decisions, or vice versa, or where the Group is subject
to common control or common significant influence. Related parties may be
individuals or other entities.
Retirement benefit costs
Payments to defined contribution retirement benefit schemes are recognised as
an expense when employees have rendered service entitling them to the
contributions. Payments made to state-managed retirement benefit schemes are
dealt with as payments to defined contribution schemes where the Group's
obligations under the schemes are equivalent to those arising in a defined
contribution retirement benefit scheme.
Share-based payments
The Group's management awards employee share options, from time to time, on a
discretionary basis which are subject to vesting conditions. The economic cost
of awarding the share options to its employees is recognised as an employee
benefit expense in the income statement equivalent to the fair value of the
benefit awarded over the vesting period. For further details refer to Note 25.
Inventory
Inventories are stated at the lower of cost and net realisable value. Cost
comprises direct materials and those overheads that have been incurred in
bringing the inventories to their present location and condition. Cost is
calculated using the weighted average method.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term
deposits. Short-term deposits are defined as deposits with an initial maturity
of three months or less. Bank overdrafts that are repayable on demand and form
an integral part of the Group's cash management are included as a component of
cash and cash equivalents for the purposes of the Statement of Cash Flows.
Interest expense
Interest expense is recognised as interest accrues, using the effective
interest method, to the net carrying amount of the financial liability.
The effective interest method is a method of calculating the amortised cost of
a financial asset/financial liability and of allocating interest
income/interest expense over the relevant period. The effective interest rate
is the rate that exactly discounts estimated future cash receipts/ payments
through the expected life of the financial assets/financial liabilities, or,
where appropriate, a shorter period.
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the statement of profit or loss
and other comprehensive income because it excludes items of income or expense
that are taxable or deductible in other years and it further excludes items
that are never taxable or deductible. The Group's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the reporting date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the Financial
Statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the statement of financial position
liability method. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition (other than in
a business combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised either for taxable temporary
differences arising on investments in subsidiaries or on carrying value of
taxable assets, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future. Deferred tax assets arising from deductible
temporary differences associated with such investments and interests are only
recognised to the extent that it is probable that there will be sufficient
taxable profits against which to utilise the benefits of the temporary
differences and they are expected to reverse in the foreseeable future. The
carrying amount of deferred tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised based on tax
laws and rates that have been enacted or substantively enacted at the
reporting date. Deferred tax is charged or credited in the profit or loss,
except when it relates to items charged or credited in other comprehensive
income, in which case the deferred tax is also dealt with in other
comprehensive income.
The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Group expects, at
the end of the reporting period, to recover or settle the carrying amount of
its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
Uncertain tax positions
Where required under applicable standards, provision is made for matters where
Management assess that it is probable that a relevant taxation authority will
not accept the position as filed in the tax returns, it is probable an outflow
of economic benefits will be required to settle the obligation and the amount
can be reliably estimated. The Group typically uses a weighted average of
outcomes assessed as possible to determine the level of provision required,
unless a single best estimate of the outcome is considered to be more
appropriate. Assessments are made at the level of an individual tax
uncertainty, unless uncertainties are considered to be related, in which case
they are grouped together. Provisions, which are not discounted given the
short period over which they are expected to be utilised, are included within
current tax liabilities, together with any liability for penalties, which to
date have not been significant. Any liability relating to interest on tax
liabilities is included within finance costs.
Share capital
Ordinary shares are classified as equity.
Treasury shares
Treasury shares represents the shares of Helios Towers plc that are held by
the Employee Benefit Trust (EBT). Treasury shares are recorded at cost and
deducted from equity.
New accounting pronouncements
The following Standards, Amendments and Interpretations have been issued by
the IASB and are effective for annual reporting periods beginning on or after
1 January 2024:
- Amendments to IAS 1 'Classification of liabilities and Non-current
liabilities with Covenants'
- Amendments to IFRS 16 'Lease Liability in a Sale and Leaseback'
- Amendments to IAS 7 and IFRS 7 'Supplier Finance Arrangements'
The Group's financial reporting will be presented in accordance with the above
new standards from 1 January 2024. The Directors do not expect that the
adoption of the above Standards, Amendments and Interpretations will have a
material impact on the Financial Statements of the Group in future periods.
In the application of the Group's accounting policies, which are described
above, the Directors are required to make judgements (other than those
involving estimations) that have a significant impact on the amounts
recognised and to make estimates and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
Critical judgements in applying the Group's accounting policies
The following are the critical judgements, apart from those involving
estimations (which are dealt with separately below), that the Directors, have
made in the process of applying the Group's accounting policies and that have
the most significant effect on the amounts recognised in the Financial
Statements.
Revenue recognition
Revenue is recognised as service revenue in accordance with IFRS 15: Revenue
from contracts with customers. In arriving at this assessment, the Directors
concluded that there is not an embedded lease, given customer contracts
provide for an amount of space on a tower rather than a specific location on a
tower. Our contracts permit us, subject to certain conditions, to relocate
customer equipment on our towers in order to accommodate other tenants.
Customer consent is usually required to move equipment, however, this should
not be unreasonably withheld. The Directors believe these substitution rights
are substantive, given the practical ability to move equipment and the
economics of doing so. In applying the requirements of IFRS 15, management
makes an evaluation as to whether it is probable that the Group will collect
the consideration that it is entitled to under the contract. The amount of
revenue that the Group is contractually entitled to but has not recognised is
disclosed in Note 22.
Contingent liabilities
The Group exercises judgement to determine whether to recognise provisions and
the exposures to contingent liabilities related to pending litigations or
other outstanding claims subject to negotiated settlement, mediation,
arbitration or government regulation, as well as other contingent liabilities
(see Note 27). Judgement is necessary to assess the likelihood that a pending
claim will succeed, or a liability will arise.
Recognition of deferred tax assets
The Group has material unrecognised deferred tax assets across a number of
jurisdictions (see Note 10) which have not been recognised to date due to
current period tax losses, insufficient certainty as to future taxable profits
and in the context of ongoing assessments from local tax authorities in
certain jurisdictions (see Note 27). Successful resolution of such assessments
from tax authorities and greater certainty over future taxable profitability
may lead to partial recognition of currently unrecognised deferred tax assets
with the next 12 months.
2(b). Critical accounting judgements and key sources of estimation uncertainty
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are discussed below.
Derivatives valuation
The group manages its interest rate risk using interest rate swap agreements.
These are classified as financial instruments and recognised at fair value at
the reporting date. The fair value is dependent on the future interest rate
forward yield curve at the reporting date. This can have a material impact on
the fair value of the interest rate swaps between periods. A 100 basis point
movement will result in a change in value of US$19.5 million which will be
recognised either in the income statement or in other comprehensive income
depending on if hedge accounting has been applied and effective in the period.
The Directors have considered whether certain other estimates included in the
financial statements meet the criteria to be key sources of estimation
uncertainty, as follows:
Impairment testing
Following the assessment of the recoverable amount of goodwill allocated to
the Group's CGUs, to which Goodwill of US$40.7 million is allocated, the
Directors consider the recoverable amount of goodwill allocated to the
operating companies to be most sensitive to the key assumptions in the number
of tenancy opportunities in the relevant markets and the expected growth rates
in these markets, future discount rates and operating cost and capital
expenditure requirements.
In the current year sensitivities have been applied to the key assumptions and
the Directors do not consider there to be a reasonable possible change that
would have a material impact to the balance sheet valuation.
Provisions for litigation
Provisions and exposures to contingent liabilities related to pending
litigations or other outstanding claims subject to negotiated settlement,
mediation, arbitration or government regulation (see Note 27) are subject to
estimation uncertainty. Whilst the value of open claims across the Group is
material in aggregate, based on recent experiences of closing such cases, the
resulting adjustments are generally not material and provisions held by the
Group have accurately quantified the final amounts determined. Therefore, the
Directors consider the current provisions held by the Group to be appropriate
and do not anticipate a significant risk of a material change to the amounts
accrued and provided at 31 December 2023 within the next financial year.
Uncertain tax positions
Measurement of the Group's tax liability involves estimation of the tax
liabilities arising from transactions in tax jurisdictions for which the
ultimate tax determination is uncertain. Where there are uncertain tax
positions, the Directors assess whether it is probable that the position
adopted in tax filings will be accepted by the relevant tax authority, with
the results of this assessment determining the accounting that follows. The
Group uses tax experts in all jurisdictions when assessing uncertain tax
positions and seeks the advice of external professional advisors where
appropriate. The Group's tax provision for these matters is recognised within
current tax liabilities and in the measurement of deferred tax assets as
applicable. The provision reflects a number of estimates where the amount of
tax payable is either currently under audit by the tax authorities or relates
to a period which has yet to be audited. These areas include the tax effects
of change of control events, which are calculated based on valuations of the
company's operations in the relevant jurisdictions, and interpretation of
taxation law relating to statutory tax filings by the Group.
The nature of the items, for which a provision is held, is such that the final
outcome could vary from the amounts recognised once a final tax determination
is made. To the extent the estimated final outcome differs from the tax that
has been provided, adjustments will be made to income tax and deferred tax
balances held in the period the determination is made. Whilst the value of
open tax audit cases for all taxes across the Group is material in aggregate,
based on recent experiences of closing tax audit cases, the resulting
adjustments are generally not material and tax accruals and provisions held by
the Group have accurately quantified the final amounts determined. Therefore,
the Directors consider the current provisions held by the Group to be
appropriate and do not anticipate a significant risk of a material change to
the amounts accrued and provided at 31 December 2023 within the next financial
year.
Climate-related matters on the financial statements
The Directors have considered the effects climate-related matters may have on
the financial statements. In particular, consideration has been given to the
potential impact climate matters may have on the carrying amount of the
Group's property plant and equipment and inventories, the impact climate
change considerations and initiatives have when assessing forecasts as part of
our going concern assessment and impairment reviews, potential financial
impact that future regulatory requirements may have on financial instruments
the Group may use or the way it assesses the recognition of assets and
liabilities.
While no adjustments have been made to the carrying amount of assets and
liabilities in the current year, the Group's forecasts reflect the Group's
planned spend in respect of carbon-intensity reduction targets. The Directors
will continue to assess the impact climate-related matters may have on the
financial position and performance of the Group and reflect those in future
financial statements.
3. Segmental reporting
The following segmental information is presented in a consistent format with
management information considered by the CEO of each operating segment, and
the CEO and CFO of the Group, who are considered to be the chief operating
decision makers (CODMs). Operating segments are determined based on
geographical location. Following the Group's recent expansion into new
countries and related internal management and reporting reorganisation, the
Group's segments are now presented on a regional rather than a country basis,
with comparative information re-presented accordingly. All operating segments
have the same business of operating and maintaining telecoms towers and
renting space on such towers. Accounting policies are applied consistently for
all operating segments. The segment operating result used by the CODMs is
Adjusted EBITDA, which is defined in Note 4.
MENA East & West Central & Southern Africa Corporate Group
Africa
For the year to 31 December 2023 Oman Tanzania Other DRC Other US$m
US$m
US$m US$m US$m US$m US$m
Revenue 57.5 232.5 80.1 256.9 94.0 - 721.0
Adjusted gross margin(1) 77% 73% 57% 54% 62% - 63%
Adjusted EBITDA(2) 38.5 162.3 37.5 123.0 44.6 (36.0) 369.9
Adjusted EBITDA margin(3) 67% 70% 47% 48% 47% - 51%
Financing costs (36.0) (37.8) (28.3) (54.7) (24.1) 5.7 (175.2)
Interest costs
Foreign exchange differences (0.6) (37.9) (31.7) 0.3 (30.2) 14.0 (86.1)
Gain on refinancing - - - - - 7.8 7.8
Total finance costs (36.6) (75.7) (60.0) (54.4) (54.3) 27.5 (253.5)
Other segmental information 509.4 281.9 300.3 383.4 251.6 12.0 1,738.6
Non-current assets
Property, plant and equipment additions 13.1 34.2 24.2 68.1 36.3 3.0 178.9
Property, plant and equipment depreciation and amortisation 23.2 47.8 29.1 51.7 27.8 7.4 187.0
MENA(4) East & West Central & Southern Corporate Group
Africa(5) Africa(6)
For the year to 31 December 2022 (Represented) Oman Tanzania Other DRC Other US$m US$m
US$m
US$m
US$m
US$m
US$m
Revenue 3.6 201.4 60.4 205.9 89.4 - 560.7
Adjusted gross margin(1) 73% 70% 59% 57% 64% - 63%
Adjusted EBITDA(2) 2.3 133.7 29.2 104.4 44.7 (31.5) 282.8
Adjusted EBITDA margin(3) 64% 66% 48% 51% 50% - 50%
Financing costs (5.2) (40.1) (21.2) (52.3) (25.5) 3.3 (141.0)
Interest costs
Foreign exchange differences (0.1) (2.2) (14.3) 0.30 (34.3) (1.6) (52.2)
Total finance costs (5.3) (42.3) (35.5) (52.0) (59.8) 1.7 (193.2)
Other segmental information(7) 519.3 318.0 327.8 343.6 218.2 4.2 1,731.1
Non-current assets
Property, plant and equipment additions 125.8 53.8 66.6 76.7 40.6 2.4 365.9
Property, plant and equipment depreciation and amortisation 1.7 52.9 21.6 53.3 21.3 6.4 157.2
1 Adjusted gross margin means gross profit, adding back site and
warehouse depreciation, divided by revenue.
2 Adjusted EBITDA is loss before tax for the year, adjusted for
finance costs, other gains and losses, interest receivable, loss on disposal
of property, plant and equipment, amortisation of intangible assets,
depreciation and impairment of property, plant and equipment, depreciation of
right-of-use assets, deal costs for aborted acquisitions, deal costs not
capitalised, share-based payments and long-term incentive plan charges, and
other adjusting items. Other adjusting items are material items that are
considered one-off by management by virtue of their size and/or incidence.
3 Adjusted EBITDA margin is Adjusted EBITDA divided by revenue.
4 Middle East & North Africa segment reflects the Company's
operations in Oman.
5 East & West Africa segment reflects the Company's operations
in Tanzania, Senegal and Malawi.
6 Central & Southern Africa segment reflects the Company's
operations in DRC, Congo Brazzaville, South Africa, Ghana and Madagascar.
7 Restatement on finalisation of acquisition accounting; see Note
31, page 166.
Customer Concentration
A significant portion of our Group revenue is derived from a small number of
large multinational customers (which operate across multiple segments). In
the year ended 31 December 2023, revenue from our top four MNO customers,
collectively accounted for 69.7% of our revenue (2022: 75.4%).
Year ended 31 December
% of % of Revenue
Revenue
(US$m) 2023 2023 2022 2022
Airtel Africa 197.1 27.4% 158.9 28.3%
Vodafone/Vodacom 154.5 21.4% 132.5 23.6%
Orange 77.5 10.8% 60.9 10.9%
Axian 73.0 10.1% 70.4 12.6%
Total 502.1 69.7% 422.7 75.4%
4. Reconciliation of aggregate segment Adjusted EBITDA to loss before tax
The key segment operating result used by chief operating decision makers
(CODMs) is Adjusted EBITDA which is also used as an Alternative Performance
Measure for the Group as a whole.
Management defines Adjusted EBITDA as loss before tax for the year, adjusted
for finance costs, other gains and losses, interest receivable, loss on
disposal of property, plant and equipment, amortisation of intangible assets,
depreciation and impairment of property, plant and equipment, depreciation of
right-of-use assets, deal costs for aborted acquisitions, deal costs not
capitalised, share-based payments and long-term incentive plan charges, and
other adjusting items. Other adjusting items are material items that are
considered one-off by management by virtue of their size and/or incidence.
The Group believes that Adjusted EBITDA and Adjusted EBITDA margin facilitate
comparisons of operating performance from period to period and company to
company by eliminating potential differences caused by variations in capital
structures (affecting interest and finance charges), tax positions (such as
the impact of changes in effective tax rates or net operating losses) and the
age and booked depreciation on assets. The Group excludes certain items from
Adjusted EBITDA, such as loss on disposal of property, plant and equipment and
other adjusting items because it believes they are not indicative of its
underlying trading performance.
Adjusted EBITDA is reconciled to loss before tax as follows:
2023 2022
US$m
US$m
Adjusted EBITDA 369.9 282.8
Adjustments applied to give Adjusted EBITDA Adjusting items: (3.3) (19.1)
Deal costs(1)
Share-based payments and long-term incentive plan charges(2) (3.7) (4.5)
Other/Restructuring (0.9) -
Loss on disposal of property, plant and equipment 3.1 (0.4)
Other gains and (losses) (6.1) (51.4)
Depreciation of property, plant and equipment (160.9) (144.6)
Amortisation of intangible assets (26.1) (12.6)
Depreciation of right-of-use assets (32.0) (21.3)
Interest receivable 1.3 1.8
Finance costs (253.5) (193.2)
Loss before tax (112.2) (162.5)
1 Deal costs comprise costs related to potential acquisitions and
the exploration of investment opportunities, which cannot be capitalised.
These comprise employee costs, professional fees, travel costs and set-up
costs incurred prior to operating activities commencing.
2 Share-based payments and long-term incentive plan charges and
associated costs.
5a. Operating profit
Operating profit is stated after charging the following:
2023 2022
US$m
US$m
Cost of inventory expensed 125.1 89.0
Auditor remuneration (see Note 5b) 2.9 2.7
(Gain)/Loss on disposal of property, plant and equipment (3.1) 0.4
Depreciation and amortisation 219.0 178.5
Staff costs (Note 6) 42.3 35.0
5b. Audit remuneration
2023 2022
US$m US$m
Statutory audit of the Company's annual accounts 0.8 0.6
Statutory audit of the Group's subsidiaries 1.8 1.8
Audit fees 2.6 2.4
Interim review engagements 0.3 0.1
Other assurance services - 0.2
Audit related assurance services 0.3 0.3
Total non-audit fees 0.3 0.3
Total fees 2.9 2.7
6. Staff costs
Staff costs consist of the following components:
2023 2022
US$m
US$m
Wages and salaries 38.9 32.0
Social security costs - employer contributions 2.6 2.4
Pension costs 0.8 0.6
42.3 35.0
An immaterial allocation of directly attributable staff costs is subsequently
capitalised into the cost of capital work in progress. The average monthly
number of employees during the year was made up as follows:
2023 2022
Operations 320 287
Legal and regulatory 61 61
Administration 61 59
Finance and IT 120 108
Sales and marketing 36 33
598 548
7. Key management personnel compensation
2023 2022
US$m US$m
Salary, fees and bonus 3.7 3.8
Pension and benefits 0.2 0.2
Share based payment charge 0.6 1.6
4.5 5.6
The above remuneration information relates to Directors in Helios Towers plc.
Further details can be found in the Directors' Remuneration Report of the
Annual Report.
8. Interest receivable
2023 2022
US$m US$m
Bank interest receivable 1.3 1.8
9. Finance costs
2023 2022
US$m US$m
Foreign exchange differences 86.1 52.2
Interest costs 150.2 115.5
Interest costs on lease liabilities 25.0 25.5
Gain on refinancing (7.8) -
253.5 193.2
The year-on-year increase in foreign exchange differences is driven primarily
by the fluctuations year-on-year of the Ghanaian Cedi, Malawian Kwacha and
Tanzanian Shilling.
10. Tax expense, tax paid and deferred tax
2023 2022
US$m US$m
(a) Tax expense: 24.7 19.1
Current tax
In respect of current year
Adjustment in respect of prior years (0.6) (1.2)
Total current tax 24.1 17.9
Deferred tax 0.6 (1.8)
Originating temporary differences on acquisition of subsidiary undertakings
Originating temporary differences on capital assets and losses (24.6) (5.9)
Adjustment in respect of prior years (0.5) (1.3)
Total deferred tax (24.5) (9.0)
Total tax expense 0.4 8.9
(b) Tax reconciliation: (112.2) (162.5)
Loss before tax
Tax computed at the local statutory tax rate (26.4) (30.9)
Tax effect of expenditure not deductible for tax purposes 20.8 26.5
Fixed asset timing differences (3.2) 0.3
Change in deferred income tax movement not recognised 3.9 9.7
Prior year (under)/over provision (1.2) (2.5)
Minimum income taxes 0.3 0.3
Different tax rates applied in overseas jurisdictions 4.1 4.8
Other 1.3 0.7
Total tax expense 0.4 8.9
The format of the tax charge presentation has changed in order to provide the
users of the accounts with a more appropriate reflection of the Group's tax
profile. The tax charge reported for the year ended 2023 relates to operating
subsidiaries outside the UK, of which a majority have a corporate income tax
rate above the effective UK tax rate of 23.5%.
The range of statutory corporate income tax rates applicable to the Group's
operating subsidiaries is between 15% and 30%.
As stipulated by local applicable law, minimum income and asset based taxes
apply to operating entities in Congo Brazzaville and Senegal respectively
which reported tax losses for the year ended 31 December 2023. Minimum income
tax rules do not apply to the loss-making entities in Malawi, Oman or South
Africa.
A tax charge is reported in the Group consolidated financial statements
despite a consolidated loss for accounting purposes, as a result of losses
recorded in certain holding companies in Mauritius and UK. Such losses are not
able to be group relieved against taxable profits in the operating company
jurisdictions.
The profits of the Mauritius entities are subject to taxation at the headline
rate of 15%, with eligibility for a statutory 80% exemption, subject to
ongoing satisfaction of the Global Business License conditions.
Based on recent experience of closing tax audit cases, the provisions held by
the Group have accurately quantified the final amounts determined. The
Directors considered the current provisions held by the Group to be
appropriate.
Tax paid 2023 2022
US$m US$m
Income tax (20.9) (20.3)
Total tax paid (20.9) (20.3)
Deferred tax
As deferred tax assets and liabilities are measured at the rates that are
expected to apply in the periods of the reversal, the deferred tax balance at
the balance sheet date has been calculated at the rate at which the relevant
balance is expected to be recovered or settled. Management has performed an
assessment, for all material deferred income tax assets and liabilities, to
determine the period over which the deferred income tax assets and liabilities
are forecast to be realised. The deferred tax balances are calculated by
applying the relevant statutory corporate income tax rates at the balance
sheet date.
The following are the deferred tax liabilities and assets recognised by the
Group and movements thereon during the current and prior reporting period:
Accelerated tax Short term Tax Intangible assets Total
depreciation
timing
losses
US$m
US$m
US$
differences US$m
US$m
1 January 2022 (2.7) 1.3 1.2 (36.1) (36.3)
Arising on acquisition (1.2) - - (8.5) (9.7)
Charge for the year 0.4 8.0 (1.2) 1.8 9.0
Exchange rate differences - - - 5.6 5.6
31 December 2022 (3.5) 9.3 - (37.2) (31.4)
Adjustment to opening reserves (7.1) - - - (7.1)
Charge for the year (1.4) 18.9 6.4 0.7 24.6
Exchange rate differences - - - 1.6 1.6
31 December 2023 (12.0) 28.2 6.4 (34.9) (12.3)
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current tax assets and liabilities on a net
basis. The following is the analysis of the deferred tax balances (after
offset) for financial reporting purposes:
2023 2022
US$m US$m
Deferred tax liabilities (25.9) (50.1)
Deferred tax assets 13.6 18.7
Total (12.3) (31.4)
Unrecognised deferred tax
No deferred tax asset is recognised on US$140.6 million of tax losses at the
balance sheet date, as the relevant businesses are not expected to generate
sufficient forecast future taxable profits to justify recognising the
associated deferred tax assets. Tax losses for which no deferred tax assets
were recognised are as follows: US$94.7 million are subject to expiry under
local statutory tax rules within periods of 3 to 5 years and US$45.9 million
are not expected to expire. As at the balance sheet date, the geographical
split of the unrecognised deferred tax assets in relation to losses is
Mauritius US$77.8 million (tax effect $11.7 million), Oman US$16.6 million
(tax effect US$2.5 million), South Africa US$19.4 million (tax effect US$5.4
million), Congo Brazzaville US$0.3 million (tax effect US$0.1 million) and UK
US$26.5 million (tax effect US$6.2 million).
At the balance sheet date, no deferred tax liability is recognised on
temporary differences relating to the aggregate amount of unremitted earnings
of overseas operating subsidiaries of US$0.1m as the Group is able to control
the timings of the reversal of these temporary differences and it is probable
that they will not reverse in the foreseeable future.
11. Intangible assets
Goodwill US$m Customer Customer Colocation Non-compete Computer Total
contracts
relationships
rights
agreement
software and licence
US$m
US$m
US$m
US$m
US$m
US$m
Cost 21.9 3.0 199.8 8.8 1.1 21.3 255.9
At 1 January 2022
Additions during the year - - - - - 5.6 5.6
Additions on acquisition of subsidiary undertakings (Note 31) (Restated)(1) 26.9 - 342.1 - - - 369.0
Transfers - - - - - 19.2 19.2
Effects of foreign currency exchange differences (4.6) (0.1) (17.7) - (0.2) (1.5) (24.1)
At 31 December 2022 (Restated)(1) 44.2 2.9 524.2 8.8 0.9 44.6 625.6
Additions during the year - - - - - 4.8 4.8
Effects of foreign currency exchange differences (3.5) (0.2) (3.1) (0.8) 0.1 (0.9) (8.4)
At 31 December 2023 40.7 2.7 521.1 8.0 1.0 48.5 622.0
Amortisation - (0.6) (2.5) (1.6) (0.5) (19.3) (24.5)
At 1 January 2022
Charge for year - (0.1) (6.8) (0.6) (0.3) (4.8) (12.6)
Transfers - - - - - (12.5) (12.5)
Effects of foreign currency exchange differences - - (2.0) - - 1.2 (0.8)
At 31 December 2022 - (0.7) (11.3) (2.2) (0.8) (35.4) (50.4)
Charge for year - (0.2) (19.7) (0.8) (0.2) (5.2) (26.1)
Effects of foreign currency exchange differences - 0.1 (0.5) 0.2 0.1 1.0 0.9
At 31 December 2023 - (0.8) (31.5) (2.8) (0.9) (39.6) (75.6)
Net book value 40.7 1.9 489.6 5.2 0.1 8.9 546.4
At 31 December 2023
At 31 December 2022 (Restated)(1) 44.2 2.2 512.9 6.6 0.1 9.2 575.2
1 Restatement on finalisation of acquisition
accounting; see Note 31.
On 8 December 2022, the Group completed the acquisition of Oman Tech
Infrastructure SAOC of the previously announced transaction with Omantel. The
Group acquired 70% of the share capital of the entity which includes the
passive infrastructure on 2,519 sites, colocation contracts and certain
supplier contracts. The Group has treated this as a business combination
transaction and accounted for it in accordance with IFRS 3 - Business
Combinations using the acquisition method. Goodwill arising on this business
combination has been allocated to the Oman CGU. The accounting for this
transaction was provisional in 2022 and was finalised in 2023. Please refer to
further details in Note 31 for finalisation of Purchase Price Allocation
Accounting.
Impairment
The Group tests goodwill, irrespective of any indicators, at least annually
for impairment. All other intangible assets are tested for impairment where
there is an impairment indicator. If any such indication exists, then the
CGU's recoverable amount is estimated. For goodwill, the recoverable amount of
the related CGU is also estimated each year.
The carrying value of goodwill at 31 December was as follows:
Goodwill 2023 2022
US$m US$m
(Restated)(1)
2019 South Africa 3.8 4.2
2021 Senegal 5.3 5.0
2021 Madagascar 10.0 10.3
2022 Malawi 5.0 8.1
2022 Oman 16.6 16.6
Total 40.7 44.2
1 Restatement on finalisation of acquisition
accounting; see Note 31
The recoverable amount is determined based on a value in use calculation using
cash flow projections for the next five years from financial budgets approved
by the Board of Directors, which incorporates climate considerations (with the
exception of Oman which has been calculated over 10 years, due to the
anticipated growth profile of the business which has been based on contractual
commitments in the SPA with Omantel).
Key assumptions used in value in use calculations
- number of additional colocation tenants added to towers in future periods.
These are based on estimates of the number of tower opportunities in the
relevant markets and the expected growth in these markets;
- discount rate; and
- operating cost and capital expenditure requirements.
The key assumptions used to assess the value in use calculations were a
pre-tax discount rate (South Africa, 11.4%, Senegal 10.7%, Madagascar 13.1%,
Malawi 11.3% and Oman 10.8%) and also estimated long-term growth rates assumed
to be 2.0% across all markets.
The adjustment required to the discount rate to breakeven is an increase of
2.5% in Madagascar. The adjustment required to the future cash flows to
breakeven is a decrease of 23.2% in Madagascar. The adjustment required to the
long-term growth rate to breakeven is a decrease of 3.7% in Madagascar.
12. Property, plant and equipment
IT equipment Fixtures Motor Site assets Land Leasehold Total
US$m
and fittings
US$m
US$m
improvements
US$m
US$m vehicles
US$m
US$m
Cost 27.5 1.6 4.7 1,497.6 6.6 3.5 1,541.5
At 1 January 2022
Additions 0.1 - 0.1 203.9 - 0.1 204.2
Additions on acquisition of subsidiary undertakings (Restated)(1) - - - 161.7 - - 161.7
Transfers (19.2) - - - - - (19.2)
Disposals - - - (1.6) - - (1.6)
Effects of foreign currency exchange differences (0.5) 0.1 (0.5) (43.5) (0.1) (0.2) (44.7)
At 31 December 2022 (Restated)(1) 7.9 1.7 4.3 1,818.1 6.5 3.4 1,841.9
Additions 0.1 0.1 0.6 177.9 0.1 0.1 178.9
Disposals - - (0.1) (6.8) - - (6.9)
Effects of foreign currency exchange differences (0.1) - (0.2) (80.1) (0.2) - (80.6)
Hyperinflation impacts 0.8 0.2 1.2 110.2 - 0.1 112.5
At 31 December 2023 8.7 2.0 5.8 2,019.3 6.4 3.6 2,045.8
Depreciation (20.1) (1.4) (3.5) (805.0) (0.1) (3.2) (833.3)
At 1 January 2022
Charge for the year (0.5) (0.1) (0.4) (143.2) (0.2) (0.2) (144.6)
Transfers 12.6 - - - - - 12.6
Disposals - - - 8.2 - - 8.2
Effects of foreign currency exchange differences 0.4 0.1 0.3 22.0 - 0.3 23.1
At 31 December 2022 (7.6) (1.4) (3.6) (918.0) (0.3) (3.1) (934.0)
Charge for the year (0.3) (0.3) (0.4) (159.7) (0.1) (0.1) (160.9)
Disposals - - 0.3 6.3 - - 6.6
Effects of foreign currency exchange differences 0.1 - 0.2 43.0 - - 43.3
Hyperinflation impacts (0.8) (0.2) (1.1) (80.3) - (0.1) (82.5)
At 31 December 2023 (8.6) (1.9) (4.6) (1,108.7) (0.4) (3.3) (1,127.5)
Net book value 0.1 0.1 1.2 910.6 6.0 0.3 918.3
At 31 December 2023
At 31 December 2022 (Restated)(1) 0.3 0.3 0.7 900.1 6.2 0.3 907.9
1 Restatement on finalisation of acquisition
accounting; see Note 31.
At 31 December 2023, the Group had US$184.8 million (2022: US$129.6 million)
of expenditure recognised in the carrying amount of items of site assets that
were in the course of construction. On completion of the construction, they
will remain within the site assets balance, and depreciation will commence
when the assets are available for use.
13. Right-of-use assets
Land Buildings Motor Total
vehicles
US$m US$m
US$m US$m
Cost 288.9 14.0 0.4 303.3
At 1 January 2023 (Restated)(1)
Additions 44.3 13.3 1.1 58.7
Disposals (19.6) (2.2) (0.2) (22.0)
Hyperinflation impacts 25.6 2.4 - 28.0
Effects of foreign exchange differences (12.2) (0.6) - (12.8)
At 31 December 2023 327.0 26.9 1.3 355.2
Depreciation (68.8) (7.8) (0.2) (76.8)
At 1 January 2023
Charge for the year (27.2) (4.1) (0.7) (32.0)
Disposals 14.1 2.1 0.3 16.5
Hyperinflation impacts (11.4) (1.4) - (12.8)
Effects of foreign exchange differences 3.7 0.2 - 3.9
At 31 December 2023 (89.6) (11.0) (0.6) (101.2)
Net book value 237.4 15.9 0.7 254.0
At 31 December 2023
At 31 December 2022 (Restated)(1) 220.1 6.2 0.2 226.5
1 Restatement on finalisation of acquisition
accounting; see Note 31.
14. Inventories
2023 2022
US$m US$m
Inventories 12.7 14.6
Inventories are primarily made up of fuel stocks of US$12.5 million (2022:
US$10.5 million) and raw materials of US$0.2 million (2022: US$4.1 million).
The impact of inventories recognised as an expense during the year in respect
of continuing operations was US$125.1 million (2022: US$89.0 million).
15. Trade and other receivables
2023 2022
US$m US$m
Trade receivables 145.2 80.5
Loss allowance (5.4) (5.8)
139.8 74.7
Contract Assets 109.1 91.6
Sundry Receivables 33.1 38.6
VAT and withholding tax receivable 15.2 23.2
297.2 228.1
Loss allowance
Balance brought forward (5.8) (6.0)
Amounts written off/derecognised - -
Net remeasurement of loss allowance - -
Unused amounts reversed 0.4 0.2
(5.4) (5.8)
The Group measures the loss allowance for trade receivables, trade receivables
from related parties and other receivables at an amount equal to lifetime
expected credit losses (ECL). The ECL on trade receivables are estimated using
a provision matrix by reference to past default experience of the debtor and
an analysis of the debtor's current financial position, adjusted for factors
that are specific to the debtors, general economic conditions of the industry
in which the debtors operate and an assessment of both the current as well as
the forecast direction of conditions at the reporting date. Loss allowance
expense is included within cost of sales in the Consolidated Income Statement.
Additional detail on provision for expected credit loss and impairment can be
found in Note 26.
There has been no change in the estimation techniques or significant
assumptions made during the current reporting period. Interest can be charged
on past due debtors. The normal credit period of services is 30 days.
US$55.0 million of new contract assets were recognised in the year and US$36.3
million of contract assets at 31 December 2022 were recovered from customers.
Of the trade receivables balance at 31 December 2023, 90% is due from large
multinational MNOs. The Group does not hold any collateral or other credit
enhancements over these balances nor does it have a legal right of offset
against any amounts owed by the Group to the counterparty.
Debtor days
The Group calculates debtor days as set out in the table below. It considers
its most relevant customer receivables exposure on a given reporting date to
be the amount of receivables due in relation to the revenue that has been
reported up to that date. It therefore defines its net receivables as the
total trade receivables and accrued revenue, less loss allowance and deferred
income that has not yet been settled.
2023 2022
US$m US$m
Trade receivables 145.2 80.5
Accrued revenue(1) 10.1 22.9
Less: Loss allowance (5.4) (5.8)
Less: Deferred income(2) (56.5) (9.8)
Net receivables 93.4 87.8
Revenue 721.0 560.7
Debtor days 47 57
1 Reported within sundry receivables.
2 Deferred income, as per Note 19, has been adjusted for US$4.1
million (2022: US$0 million) in respect of amounts settled by customers at the
balance sheet date.
In determining the recoverability of a trade receivable, the Group considers
any change in the credit quality of the trade receivable from the date credit
was initially granted up to the reporting date. The Directors consider that
the carrying amount of trade and other receivables is approximately equal to
their fair value.
At 31 December 2023, US$26.8 million (2022: US$16.6 million) of services had
been provided to customers which had yet to meet the Group's probability
criterion for revenue recognition under the Group's accounting policies.
Revenue for these services will be recognised in the future as and when all
recognition criteria are met.
16. Prepayments
2023 2022
US$m US$m
Prepayments 42.6 45.7
Prepayments primarily comprise advance payments to suppliers.
17. Cash and cash equivalents
2023 2022
US$m US$m
Bank balances 106.6 119.6
Cash and cash equivalents comprise cash at bank and in hand. Short-term
deposits are defined as deposits with an initial maturity of three months or
less.
18. Share capital and share premium
2023 2022
Number of shares US$m Number US$m
(million) of
shares
(million)
Authorised, issued and fully paid ordinary shares of £0.01 each 1,051 13.5 1,051 13.5
1,051 13.5 1,051 13.5
The share capital of the Group is represented by the share capital of the
Company, Helios Towers plc.
The treasury shares represent the cost of shares in Helios Towers plc
purchased in the market and held by the Helios Towers plc EBT to satisfy
options under the Group Share options plan. Treasury shares held by the Group
as at 31 December 2023 are 1,560,641 (31 December 2022: 2,827,852).
19. Trade and other payables
2023 2022
US$m US$m
(Restated)
Trade payables 31.3 32.0
Deferred income 60.6 9.8
Deferred consideration 33.5 52.2
Accruals 148.6 126.9
VAT, withholding tax, and other taxes payable 27.7 18.5
301.7 239.4
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The average credit period taken for trade
purchases is 12 days (2022: 22 days). Payable days are calculated as trade
payables and payables to related parties, divided by cost of sales plus
administration expenses less staff costs and depreciation and amortisation. No
interest is charged on trade payables. The Group has financial risk management
policies in place to ensure that all payables are paid within the pre-agreed
credit terms. Amounts payable to related parties are unsecured, interest free
and repayable on demand.
Deferred income primarily relates to service revenue which is billed in
advance.
The Group recognised revenue of US$9.8 million (2022: US$45.8 million) from
contract liabilities held on the balance sheet at the start of the financial
year. Contract liabilities are presented as deferred income in the table
above.
Deferred consideration relates to consideration that is payable in the future
for the purchase of certain tower assets which the Group is committed to when
certain conditions are met, to enable the transfer of ownership to Helios
Towers.
Accruals consist of general operational accruals, accrued capital items, and
goods received but not yet invoiced.
Trade and other payables are classified as financial liabilities and measured
at amortised cost. These are initially recognised at fair value and
subsequently at amortised cost. These are expected to be settled within a
year.
The Directors consider the carrying amount of trade payables approximates to
their fair value due to their short-term nature.
20. Loans
2023 2022
US$m US$m
Loans and bonds 1,632.3 1,564.3
Bank overdraft 18.0 7.3
Total loans and bonds 1,650.3 1,571.6
Current 37.7 19.9
Non-current 1,612.6 1,551.7
1,650.3 1,571.6
In September 2023, the Group entered into new facilities representing a
combined value of up to US$720 million, including a 5 year Term Loan of US$600
million and an up to US$120 million 4.5 year revolving credit facility (RCF).
In October 2023, the new facilities were drawn down to buy back US$325 million
principal of the 7.000% Senior Notes due 2025 and US$80 million to repay the
previous term loan facility, which was extinguished alongside upon repayment,
and related fees.
In December 2022, Oman Tech Infrastructure SAOC entered into banking
facilities representing a combined US$260 million in Oman for the purposes of
repaying loan balances due to its former owner, funding growth and upgrade
capex and for general working capital purposes. The facilities include both
OMR and USD denominated financing with tenors from 1 year (renewable) to 13
years. This includes a revolving credit facility of US$20 million. As at 31
December 2022, US$2.9 million of this was utilised. At 31 December 2022,
US$200 million of the available term loans were drawn.
In March 2021 the Group issued US$250 million of convertible bonds with a
coupon of 2.875%, due in 2027. The initial conversion price was set at
US$2.9312. The conversion price is subject to adjustments for any dividend in
cash or in kind, as well as customary anti-dilution adjustments, pursuant to
the terms and conditions of the convertible bonds. The bondholders have the
option to convert at any time up to seven business days prior to the final
maturity date. Helios Towers have the right to redeem the bonds at their
principal amount, together with accrued but unpaid interest up to the optional
redemption date, from April 2026, if the Helios Towers share price has traded
above 130% of the conversion price on twenty out of the previous thirty days
prior to the redemption notice.
In June 2021 the Group tapped the above bond for an aggregate principal amount
of US$50 million. On initial recognition of the convertible bond and the
convertible bond tap, a liability and equity reserve component were recognised
being US$242.4 million and US$52.7 million respectively including transaction
costs.
In May 2021, Helios Towers Senegal entered into facilities representing a
combined €120 million in Senegal for the purposes of partially funding the
Senegal towers acquisition, funding the 400 committed BTS as part of the
transaction and for general working capital purposes. The facilities include
both EUR and XOF denominated financing with tenors ranging from 2 years to 9
years.
On 18 June 2020 HTA Group, Ltd., a wholly owned subsidiary of Helios Towers
plc, issued US$750 million of 7.000% Senior Notes due 2025, guaranteed on a
senior basis by Helios Towers plc and certain of its direct and indirect
subsidiaries.
On 9 September 2020 HTA Group, Ltd issued a further US$225 million aggregate
principal amount of its 7.000% Senior Notes due 2025.
The current portion of borrowings relates to accrued interest on the bonds,
term loan interest and principal payable within one year of the balance sheet
date.
Loans are classified as financial liabilities and measured at amortised cost.
Refer to Note 26 for further information on the Group's financial instruments.
21. Lease liabilities
2023 2022
US$m US$m
Short-term lease liabilities 30.2 31.8
Land
Buildings 4.7 2.2
Motor vehicles 0.6 0.1
35.5 34.1
2023 2022
US$m US$m
Long-term lease liabilities 193.1 188.4
Land
Buildings 10.8 3.4
Motor vehicles - 0.1
203.9 191.9
The below undiscounted cash flows do not include escalations based on CPI or
other indexes which change over time. Renewal options are considered on a
case-by-case basis with judgements around the lease term being based on
management's contractual rights and their current intentions. Refer to Note 13
for the Group's Right-of-use assets.
The total cash paid on leases in the year was US$45.3 million (2022: US$40.8
million).
The profile of the outstanding undiscounted contractual payments fall due as
follows:
Within 2-5 years 6-10 years 10+ years Total
1 year
US$m
US$m
US$m
US$m
US$m
31 December 2023 44.4 139.8 138.6 350.6 673.4
31 December 2022 43.0 137.7 122.7 326.0 629.4
22. Uncompleted performance obligations
The table below represents uncompleted performance obligations at the end of
the reporting period. This is total revenue which is contractually due to the
Group, subject to the performance of the obligation of the Group related to
these revenues. Management refers to this as contracted revenue.
2023 2022
US$m
US$m
Total contracted revenue 5,417.2 4,705.0
Contracted revenue
The following table provides our total undiscounted contracted revenue by
country as of 31 December 2023 for each year from 2024 to 2028, with local
currency amounts converted at the applicable average rate for US Dollars for
the year ended 31 December 2023 held constant. Our contracted revenue
calculation for each year presented assumes:
- no escalation in fee rates;
- no increases in sites or tenancies other than our committed tenancies;
- our customers do not utilise any cancellation allowances set forth in
their MLAs;
- no termination of existing customer tMLAs prior to their current term;
and
- no automatic renewal.
As at 31 December 2023, total contracted revenue was US$5.4 billion, with an
average remaining life of 7.8 years.
Year ended 31 December
(US$m) 2024 2025 2026 2027 2028
Middle East & North Africa 52.5 49.6 49.6 49.6 49.6
East & West Africa 278.3 287.4 247.2 231.8 227.8
Central & Southern Africa 362.1 334.7 300.8 271.5 256.6
Total 692.9 671.7 597.6 552.9 534.0
23. Related party transactions
Balances and transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not disclosed
in this Note. Key management personnel comprise Executive and Non-Executive
Directors of Helios Towers plc. Compensation of key management personnel is
disclosed in note 7.
There were no other related party transactions during the financial year.
24. Other gains and losses
2023 2022
US$m US$m
Fair value gain/(loss) on derivative financial instruments 2.1 (51.5)
Net monetary gain/(loss) on hyperinflation (7.9) -
Fair value movement on forward contracts (0.3) 0.1
(6.1) (51.4)
All fair values are Level 2, except for the fair value of the embedded
derivatives, which are Level 3. Further detail can be found in Note 26.
25. Share-based payments
Pre-IPO LTIP
Ahead of the IPO certain Directors, former Directors, Senior Managers and
employees of the Group were granted nil-cost options in respect of shares up
to an aggregate value of US$10 million based on an offer price of 115 pence
and a US Dollar to pounds Sterling conversion rate of US$1:£0.7948 (the HT
LTIP).
The Company issued 6,557,668 shares to the trustee of the Trust (or as it
directs) immediately prior to IPO in order to satisfy future settlement of
awards under the HT LTIP and nil-cost options under the HT MIPs. The Trust is
consolidated into the Group.
These options became exercisable in tranches over a three-year period
post-IPO. The award participants were entitled to exercise some of the share
options on IPO.
Number of options 2023 2022
As at 1 January 774,553 1,026,456
Granted during the year - -
Exercised during the year (252,500) (251,903)
Forfeited during the year - -
At 31 December 522,053 774,553
Of which:
Vested and exercisable 522,053 774,553
Unvested - -
Fair value of options/share awards granted pre-IPO
The fair value at grant date is independently determined using a
probability-weighted expected returns methodology, which is an appropriate
future-orientated approach when considering the fair value of options/shares
that have no intrinsic value at the time of issue. In this case the expected
future returns were estimated by reference to the expected proceeds
attributable to the underlying shares at IPO, as provided by management,
including adjustments for expected net debt, transaction costs and priority
returns to other shareholders. This is then discounted into present value
terms adopting an appropriate discount rate. The capital asset pricing
methodology was used when considering an appropriate discount rate to apply to
the pay-out expected to accrue to the share awards on realisation.
Key assumptions:
- Expected exit dates 0 to 4 years;
- Probability weightings up to 25%;
- Expected range of exit multiples up to 10.0x;
- Expected forecast Adjusted EBITDA across two scenarios (management case
and downside case) and respective probability weightings;
- Estimated proceeds per share; and
- Hurdle per share up to US$1.25.
The Group has in place one adopted discretionary share plan called the Helios
Towers plc Employee Incentive Plan 2019 (the EIP), details of which are set
out in this note.
Employee Incentive Plan
Following successful admission to the London Stock Exchange, the Company has
adopted a discretionary share plan called the Helios Towers plc Employee
Incentive Plan 2019 (the EIP).
The EIP is designed to provide long-term incentives for senior managers and
above (including Executive Directors) to deliver long-term shareholder
returns. Participation in the plan is at the Remuneration Committee's
discretion, and no individual has a contractual right to participate in the
plan or to receive any guaranteed benefits. Shares received under the scheme
by Executive Directors will be subject to a two-year post-vesting holding
period. In all other respects the shares rank equally with other fully paid
ordinary shares on issue.
The Group has granted Long-Term Incentive Plan awards under the EIP to the
Executive Directors and selected key personnel. The equity settled awards
comprise separate tranches which vest depending upon the achievement of the
following performance targets over a three-year period:
- Relative TSR tranche;
- Adjusted EBITDA tranche;
- ROIC tranche; and
- Impact scorecard tranche (introduced in 2023).
Set out below are summaries of options granted under the EIP.
2023 2022
Number of options Number of options
As at 1 January 10,534,604 7,695,687
Granted during the year 9,097,196 4,233,199
Lapsed during the year (1,282,200) -
Exercised during the year (977,063) (6,131)
Forfeited during the year (806,772) (1,338,151)
As at 31 December 16,565,765 10,534,604
Vested and exercisable at 31 December 954,734 -
The IFRS 2 charge recognised in the Consolidated Income Statement for the 2023
financial year in respect to the EIP was US$2.1 million (2022: US$3.1
million). All share options outstanding as at 31 December 2023 have a
remaining contractual life of 8.3 years.
The fair value at grant date is independently determined using the Monte Carlo
model. Key assumptions used in valuing the share-based payment charge are as
follows:
2022 LTIP Award
Relative Adjusted EBITDA ROIC
TSR
Grant date 28-Apr-22 28-Apr-22 28-Apr-22
Share price at grant date £1.12 £1.12 £1.12
Fair value as a percentage of the grant price 51.6% 100.0% 100.0%
Term to vest (years) 2.68 n/a n/a
Expected life from grant date (years) 2.68 2.68 2.68
Volatility 47.4% n/a n/a
Risk-free rate of interest 1.6% n/a n/a
Dividend yield n/a n/a n/a
Average FTSE 250 volatility 42.7% n/a n/a
Average FTSE 250 correlation 27.7% n/a n/a
Fair value per share £0.58 £1.12 £1.12
Relative Adjusted ROIC Impact Scorecard
2023 LTIP Award TSR EBITDA
Grant date 17-May-23 17-May-23 17-May-23 17-May-23
Share price at grant date £0.918 £0.918 £0.918 £0.918
Fair value as a percentage of the grant price 42.0% 100.0% 100.0% 100.0%
Term to vest (years) 2.87 n/a n/a n/a
Expected life from grant date (years) 2.87 2.87 2.87 2.87
Volatility 38.3% n/a n/a n/a
Risk-free rate of interest 3.9% n/a n/a n/a
Dividend yield n/a n/a n/a n/a
Average FTSE 250 volatility 33.9% n/a n/a n/a
Average FTSE 250 correlation 25.5% n/a n/a n/a
Fair value per share £0.385 £0.918 £0.918 £0.918
HT SharingPlan
Shareholders voted to approve the all-employee share plan schemes at the 2021
AGM. In 2021, the Board granted inaugural 'HT SharingPlan' Restricted Stock
Unit (RSU) awards under the HT Global Share Purchase Plan rules. Each employee
was granted a 2021 award with a three-year vesting period. The Board also
granted similar awards in 2022 and 2023, again with a three-year vesting
period.
All employees were granted awards of equal value and on the same terms. The
vesting of the awards is subject to continued employment with the Group.
2023 Number 2022
of Number of RSUs
RSUs
As at 1 January 1,684,018 729,528
Granted during the year 1,762,150 1,681,155
Forfeited during the year (143,483) (104,684)
Vested during the year (37,648) (621,981)
As at 31 December 3,265,037 1,684,018
Deferred Bonuses 2023 2022
As at 1 January 85,755 36,583
Granted during the year - 49,172
Forfeited during the year - -
Vested during the year - -
As at 31 December 85,755 85,755
31 December 31 December
26. Financial instruments
Financial instrument assets held by the Group at fair value had the following 2023 2022
effect on profit and loss:
US$m US$m
Balance brought forward 2.8 57.7
Derivative financial instrument - 7.000% Senior Notes 2025 3.5 (55.2)
Currency forward contracts - 0.3
Balance carried forward 6.3 2.8
Fair value measurements
Some of the Group's financial derivatives are measured at fair value at the
end of each reporting period. The information set out below provides data
about how the fair values of these financial assets and financial liabilities
are determined (in particular, the valuation technique(s) and inputs used).
For those financial instruments measured at fair value, the Group has
categorised them into a three-level fair value hierarchy based on the priority
of the inputs to the valuation technique in accordance with IFRS 13. The
hierarchy gives the highest priority to quoted prices in active markets for
identical assets or liabilities (Level 1) and the lowest priority to
unobservable inputs (Level 3). If the inputs used to measure fair value fall
within different levels of the hierarchy, the category level is based on the
lowest priority level input that is significant to the fair value measurement
of the instrument in its entirety. There are no financial instruments which
have been categorised as Level 1. There were no transfers between the levels
in the year.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be
able to continue as a going concern while maximising the return to
stakeholders through the optimisation of the debt and equity balance. The
capital structure of the Group consists of debt, which includes borrowings
disclosed in Notes 20 and 21, cash and cash equivalents and equity
attributable to equity holders of the Company, comprising issued capital,
reserves and retained earnings as disclosed in the Statement of Changes in
Equity.
Gearing ratio
The Group keeps its capital structure under review. The gearing ratio at the
year end is as follows:
2023 2022
US$m US$m
Debt (net of issue costs) 1,889.7 1,797.6
Cash and cash equivalents (106.6) (119.6)
Net debt 1,783.1 1,678.0
Equity attributable to the owners (68.3) 8.3
Non-controlling interests 29.8 41.0
(46.3x) 34.1x
Debt is defined as long-term and short-term loans and lease liabilities, as
detailed in Notes 20 and 21 respectively.
Externally imposed capital requirements
The Group is not subject to externally imposed capital requirements.
Categories of financial instruments
2023 2022
US$m US$m
Financial assets 106.6 119.6
Financial assets at amortised cost:
Cash and cash equivalents
Trade and other receivables 321.6 204.9
428.2 324.5
Fair value through profit or loss: 6.3 2.8
Derivative financial assets
434.5 327.3
Financial liabilities Amortised cost: 213.4 216.5
Trade and other payables
Bank overdraft 18.0 7.3
Lease liabilities 239.4 226.0
Loans 1,632.3 1,571.6
2,103.1 2,021.4
As at 31 December 2023 and 31 December 2022, the Group had no cash pledged as
collateral for financial liabilities. The Directors estimate the amortised
cost of cash and cash equivalents is approximate to fair value. The $650
million bond maturing in 2025 had a carrying value of US$650.0 million at 31
December 2023 and a fair value of US$638.2 million. The $300 million
convertible bond maturing in 2027 had a carrying value of US$268.6 million at
31 December 2023 and a fair value of US$262.1 million. The Directors estimate
the amortised cost of other loans and borrowings is approximate to fair value.
Financial risk management objectives and policies
The Group's Finance function provides services to the business, coordinates
access to domestic and international financial markets, and monitors and
manages the financial risks relating to the operations of the Group through
internal risk reports which analyse exposures by degree and magnitude of
risks. These risks include market risk (including currency risk, fair value
interest rate risk and price risk), credit risk, liquidity risk and cash flow
interest rate risk.
The Group's overall financial risk management programme focuses on the
unpredictability of financial markets and seeks to minimise potential adverse
effects on the Group's financial performance. The Group's senior management
oversees the management of these risks. The Finance function is supported by
the Group's senior management, which advises on financial risks and the
appropriate financial risk governance framework for the Group. Key financial
risks and exposures are monitored through a monthly report to the Board of
Directors, together with an annual Board review of corporate treasury matters.
Financial risk
The principal financial risks to which the Group is exposed through its
activities are risks of changes in foreign currency exchange rates and
interest rates.
Interest rate risk management
The Group is exposed to interest rate risk because entities in the Group
borrow funds at both fixed and floating interest rates. The risk is managed by
the Group by maintaining an appropriate mix between fixed and floating rate
borrowings and utilising interest rate swaps. At 31 December 2023 a change of
100 basis points would increase or decrease derivative financial liabilities
and equity by US$19.5 million.
Foreign currency risk management
The Group undertakes transactions denominated in foreign currencies;
consequently exposures to exchange rate fluctuations arise. The Group's main
currency exposures were to the New Ghanaian Cedi (GHS), Malagasy Ariary (MGA),
Tanzanian Shilling (TZS), Central African Franc (XAF), South African Rand
(ZAR) and Malawian Kwacha (MWK) through its main operating subsidiaries. The
Group has exposure to Sterling (GBP) and Euro (EUR) fluctuations on its
financial assets and liabilities, however, this is not considered material.
The Group manages foreign currency risks utilising forward contracts where
considered appropriate.
The carrying amounts of the Group's foreign currency denominated monetary
assets and monetary liabilities at the reporting date are as follows:
Assets Liabilities
2023 2022 2023 2022
US$m US$m US$m US$m
New Ghanaian Cedi 18.0 15.7 19.1 20.8
Malagasy Ariary 11.7 10.9 13.5 11.8
Tanzanian Shilling 61.9 71.4 85.1 100.2
South African Rand 6.1 5.6 16.0 17.5
Central African Franc 35.7 35.7 156.1 137.0
Malawian Kwacha 15.2 15.4 14.8 19.8
Omani Rial 35.5 10.1 85.7 35.2
184.1 164.8 390.3 342.3
Foreign currency sensitivity analysis
The following table details the Group's sensitivity to foreign exchange risk.
The percentage movement applied to the currency is based on the average
movements in the previous three annual reporting periods of the US Dollar
against the GHS, XAF, TZS, MGA, ZAR and MWK (2022: sensitivity based on a 10%
movement), The sensitivity analysis includes only outstanding foreign currency
denominated monetary items and adjusts their translation at the year-end for a
change in foreign currency rates. A positive number below indicates an
increase in profit and other equity where US Dollar weakens against the GHS,
XAF, TZS, ZAR, MWK or OMR. For a strengthening of US Dollar against the GHS,
XAF, TZS, ZAR, MWK or OMR, there would be an equal and opposite effect on the
profit and other equity, on the basis that all other variables remain
constant.
Impact on profit or loss
2023 2022
US$m US$m
New Ghanaian Cedi impact (27% movement) (0.3) 0.5
Malagasy Ariary impact (5% movement) (0.1) 0.1
Tanzanian Shilling impact (3% movement (0.7) 2.9
South African Rand (8% movement) (0.8) 1.2
Central African Franc Impact (4% movement) (3.8) 10.2
Malawian Kwacha (24% movement) 0.1 0.5
Omani Rial (Pegged to USD) - 2.5
This is mainly attributable to the exposure outstanding on GHS, MGA, XAF, TZS,
ZAR, MWK and OMR receivables and payables in the Group at the reporting date.
The amounts above generally correspond with the functional currency of the
relevant subsidiary and the foreign currency exposures are therefore reflected
in the Group's translation reserve.
The above sensitivities do not address the translation effects within equity
of consolidating non-US Dollar denominated subsidiaries into the Group's US
Dollar presentation currency, nor do they include the effects of foreign
currency retranslation of intragroup balances which eliminate on consolidation
and therefore have no impact on equity, but nonetheless give rise to foreign
exchange differences within the Group's income statement. (see note 9)
Credit risk management
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. Default does
not occur later than when a financial asset is 90 days past due (unless the
Group has reasonable and supportable information to demonstrate that a more
lagging default criterion is more appropriate). Write-off happens at least a
year after a financial asset has become credit impaired and when management
does not have any reasonable expectations to recover the asset.
The Group has adopted a policy of only dealing with creditworthy
counterparties and obtaining sufficient collateral where appropriate, as a
means of mitigating the risk of financial loss from defaults. The Group uses
publicly available financial information and other information provided by the
counterparty (where appropriate) to deliver a credit rating for its major
customers. As of 31 December 2023, the Group has a concentration risk with
regards to four of its largest customers. The Group's exposure and the credit
ratings of its counterparties and related parties are continuously monitored
and the aggregate value of credit risk within the business is spread amongst a
number of approved counterparties. Credit exposure is controlled by
counterparty limits that are reviewed and approved by management. The carrying
amount of the financial assets recorded in the Financial Statements, which is
net of impairment losses, represents the Group's exposure to credit risk.
The Group uses the IFRS 9 ECL model to measure loss allowances at an amount
equal to their lifetime ECL. The loss allowance on trade receivables
represents the expected losses due to non-payment of amounts due from
customers.
In order to minimise credit risk, the Group has categorised exposures
according to their degree of risk of default. The use of a provision matrix is
based on a range of qualitative and quantitative factors, based on the Group's
historical experience, forward-looking macroeconomic data and informed credit
assessments, that are deemed to be indicative of risk of default, and range
from 1 (lowest risk of irrecoverability) to 5 (greatest risk of
irrecoverability).
The below table shows the Group's trade and other receivables balance and
associated loss allowances in each Group credit rating category.
31 December 2023 31 December 2022
Group Rating Risk of impairment Group exposure US$m Loss allowance US$m Net exposure US$m Gross exposure US$m Loss allowance US$m Net exposure US$m
1 Remote risk 251.6 (0.3) 251.3 184.1 (0.3) 183.8
2 Low risk 27.0 (0.9) 26.1 21.8 (0.8) 21.0
3 Medium risk 0.9 (0.1) 0.8 0.3 - 0.3
4 High risk 5.9 (3.5) 2.4 20.7 (3.8) 16.9
5 Impaired 2.0 (0.6) 1.4 2.5 (0.9) 1.6
Total 287.4 (5.4) 282.0 229.4 (5.8) 223.6
Liquidity risk management
The Group has long-term debt financing through Senior Loan Notes of US$650
million due for repayment in December 2025 and other debt as disclosed in Note
20. The Group has a revolving credit facility of US$120 million for funding
general corporate and working capital needs. As at 31 December 2023 the
facility was undrawn. This facility is available until December 2024. The
Group has remained compliant during the year to 31 December 2023 with all the
covenants contained in the Senior Credit facility. Please refer to Note 20 for
further information in relation to debt facilities.
Ultimate responsibility for liquidity risk management rests with the Board.
The Group manages liquidity risk by maintaining adequate reserves of liquid
funds and banking facilities and continuously monitoring forecast and actual
cash flows including consideration of appropriate sensitivities.
Non-derivative financial liabilities
The following tables detail the Group's remaining contractual maturity for its
non-derivative financial liabilities. The tables have been drawn up based on
the undiscounted cash flows of financial liabilities based on the earliest
date on which the Group can be required to pay. The table below includes
principal cash flows.
Within 1-2 years 2-5 years 5+ years Total
1 year US$m US$m US$m US$m
US$m
31 December 2023 213.4 - - - 213.4
Non-interest bearing
Fixed interest rate instruments 44.4 789.8 438.6 350.5 1,623.4
Variable interest rate instruments 18.0 22.3 489.8 144.5 674.6
275.8 812.1 928.4 495.0 2,511.4
31 December 2022 216.5 - - - 216.5
Non-interest bearing
Fixed interest rate instruments 43.0 39.7 1,441.3 493.8 2,017.8
Variable interest rate instruments 10.2 - 25.0 200.0 235.2
269.7 39.7 1,466.3 693.8 2,469.5
Non-derivative financial assets
The following table details the Group's expected maturity for other
non-derivative financial assets. The table below has been drawn up based on
the undiscounted contractual maturities of the financial assets except where
the Group anticipates that the cash flow will occur in a different period.
Within 1-2 years 2-5 years 5+ years Total
1 year US$m US$m US$m US$m
US$m
31 December 2023 282.0 - - - 282.0
Non-interest bearing
Fixed interest rate instruments 106.6 - - - 106.6
388.6 - - - 388.6
31 December 2022 Non-interest bearing 204.9 - - - 204.9
Fixed interest rate instruments 119.6 - - - 119.6
324.5 - - - 324.5
Derivative financial instruments assets
The derivatives represent the fair value of the put and call options embedded
within the terms of the Senior Notes. The call options give the Group the
right to redeem the Senior Notes instruments at a date prior to the maturity
date (18 December 2025), in certain circumstances and at a premium over the
initial notional amount. The put option provides the holders with the right
(and the Group with an obligation) to settle the Senior Notes before their
redemption date in the event of a change in control resulting in a rating
downgrade (as defined in the terms of the Senior Notes, which also includes a
major asset sale), and at a premium over the initial notional amount.
The options are fair valued using an option pricing model that is commonly
used by market participants to value such options and makes the maximum use of
market inputs, relying as little as possible on the entity's specific inputs
and making reference to the fair value of similar instruments in the market.
The options are considered a Level 3 financial instrument in the fair value
hierarchy of IFRS 13, owing to the presence of unobservable inputs. Where
Level 1 (market observable) inputs are not available, the Helios Group engages
a third-party qualified valuer to perform the valuation. Management works
closely with the qualified external valuer to establish the appropriate
valuation techniques and inputs to the model. The Senior Notes are quoted and
it has an embedded derivative. The fair value of the embedded derivative is
the difference between the quoted price of the Senior Notes and the fair value
of the host contract (the Senior Notes excluding the embedded derivative). The
fair value of the Senior Notes as at the valuation date has been sourced from
an independent third-party data vendor. The fair value of the host contract is
calculated by discounting the Senior Notes' future cash flows (coupons and
principal payment) at US Dollar 3-month LIBOR plus Helios Towers' credit
spread. For the valuation date of 31 December 2023, a relative 5% increase in
credit spread would result in a nil valuation of the embedded derivatives.
As at the reporting date, the call option had a fair value of US$6.3 million
(31 December 2022: US$2.5 million) on the US$650 million 7.000% Senior Notes
2025, while the put option had a fair value of US$0 million (31 December 2022:
US$0 million). The increase in the fair value of the call option is
attributable the tightening of the Group's credit spread, which is in line
with the market movement.
The key assumptions in determining the fair value are: the quoted price of the
bond as at 31 December 2023; the credit spread; and the yield curve. The
probabilities relating to change of control and major asset sale represent a
reasonable expectation of those events occurring that would be held by a
market participant.
1-2 years US$m 2-5 years US$m 5+ years Total
Within 1 year US$m US$m US$m
31 December 2023 - 6.3 - - 6.3
Net settled:
Embedded derivatives
- 6.3 - - 6.3
31 December 2022 - - 2.5 - 2.5
Net settled:
Embedded derivatives
- - 2.5 - 2.5
Risk management strategy of hedge relationships
The Group's activities expose it to the financial risks of changes in interest
rates which it manages using derivative financial instruments. The objective
of cash flow hedges is principally to protect the group against adverse
interest rate movements. The Group does not use derivative financial
instruments for speculative purposes.
Derivative financial instruments are initially measured at fair value on the
contract date and are subsequently re-measured to fair value at each reporting
date. Changes in values of all derivatives of a financing nature are included
within finance costs in the income statement unless designated in an effective
cash flow hedge relationship when the effective portion of changes in value
are deferred to other comprehensive income. Hedge effectiveness is determined
at the inception of the hedge relationship, and through periodic prospective
effectiveness assessments to ensure that an economic relationship exists
between the hedged item and hedging instrument. Hedge accounting is
discontinued when the hedging instrument expires or is sold, terminated,
exercised or no longer qualifies for hedge accounting. When hedge accounting
is discontinued, any gain or loss recognised in other comprehensive income at
that time remains in equity and is recognised in the income statement when the
hedged transaction is ultimately recognised in the income statement.
For cash flow hedges, when the hedged item is recognised in the income
statement, amounts previously recognised in other comprehensive income and
accumulated in equity for the hedging instrument are reclassified to the
income statement.
If a forecast transaction is no longer expected to occur, the gain or loss
accumulated in equity is recognised immediately in the income statement.
For hedges of foreign currency denominated borrowings and investments, the
Group uses interest rate swaps to hedge its exposure to interest rate risk and
enters into hedge relationships where the critical terms of the hedging
instrument match with the terms of the hedged item. Therefore the Group
expects a highly effective hedging relationship with the swap contracts and
the value of the corresponding hedged items to change systematically in the
opposite direction in response to movements in the underlying exchange rates
and interest rates. The Group therefore performs a qualitative assessment of
effectiveness. If changes in circumstances affect the terms of the hedged item
such that the critical terms no longer match with the critical terms of the
hedging instrument, the Group uses the hypothetical derivative method to
assess effectiveness.
Hedge ineffectiveness may occur due to:
a) The fair value of the hedging instrument on the hedge relationship
designation date if the fair value is not nil;
b) Changes in the contractual terms or timing of the payments on the hedged
item; and
c) A change in the credit risk of the Group or the counterparty with the
hedging instrument.
The hedge ratio for each designation will be established by comparing the
quantity of the hedging instrument and the quantity of the hedged item to
determine their relative weighting; for all of the Group's existing hedge
relationships the hedge ratio has been determined as 1:1. The fair values of
the derivative financial instruments are calculated by discounting the future
cash flows to net present values using appropriate market rates and foreign
currency rates prevailing at 31 December. The valuation basis is level 2 of
the fair value hierarchy. This classification comprises items where fair value
is determined from inputs other than quoted prices that are observable for the
asset and liability, either directly or indirectly.
The table below summaries the maturity profile of the Group's financial
liabilities based on contractual undiscounted payments.
On demand $USm 1-2 years US$m 2-5 years US$m > 5 years Total
Within 1 year US$m US$m US$m
31 December 2023 - 1.4 (5.5) (12.7) (2.1) (18.9)
Financial derivatives
- 1.4 (5.5) (12.7) (2.1) (18.9)
Interest Rate Swaps Nominal amounts Carrying value Opening balance (Gain)/Loss deferred to OCI Closing balance Weighted
US$m US$m 1 Jan US$m 31 Dec 2023 average
2023 US$m maturity year
US$m
USD Term Loans 400 (14.7) - 14.7 14.7 2029
27. Contingent liabilities
The Group exercises judgement to determine whether to recognise provisions and
make disclosures for contingent liabilities as explained in note 2b.
A claim arising from a prior period is outstanding from the Tanzania Revenue
Authority for corporate income tax for the financial years ending 2018-2021
inclusive. The outstanding amount is approximately US$9.2m.
A claim arising from a prior period is outstanding from DRC tax authorities
issued an assessment on a number of taxes amounting to $46.3 million for the
financial years 2018 and 2019.
A claim arising from a prior period the DRC tax authorities issued a payment
collection notice for environmental taxes amounting to $33.7 million for the
financial years 2013 to 2016.
In the year ended 2023, the Congo Brazzaville tax authorities issued a claim
for securities income tax, VAT and withholding tax. The outstanding amount is
$10.1 million.
For all cases above, responses have been submitted to the relevant tax
authority in relation to the assessments and remain under review with local
tax experts. The Directors believe that the quantum of potential future cash
outflows in relation to these tax audits is not probable cannot be reasonably
assessed and therefore no provision has been made for these amounts; the
balances above represent the Group's assessment of the maximum possible
exposure for the years assessed. The Directors are working with their advisers
and are in discussion with the tax authorities to bring the matters to
conclusion based on the facts.
Other individually immaterial tax, and regulatory proceedings, claims and
unresolved disputes are pending against Helios Towers in a number of
jurisdictions. The timing of resolution and potential outcome (including any
future financial obligations) of these are uncertain, but not considered
probable and therefore no provision has been recognised in relation to these
matters.
Legal claims
Other individually immaterial legal and regulatory proceedings, claims and
unresolved disputes are pending against Helios Towers in a number of
jurisdictions. The timing of resolution and potential outcome (including any
future financial obligations) of these are uncertain, but no cash outflows are
considered probable and therefore no provisions have been recognised in
relation to these matters.
28. Net debt
2023 2022
US$m US$m
External debt (1,650.3) (1,571.6)
Lease liabilities (239.4) (226.0)
Cash and cash equivalents 106.6 119.6
Net debt (1,783.1) (1,678.0)
2023 At Cash flows Other(1) At
1 January
31 December
US$m US$m
2023 2023
US$m
US$m
Cash and cash equivalents 119.6 (5.4) (7.6) 106.6
External debt (1,571.6) (75.7) (3.0) (1,650.3)
Lease liabilities (226.0) 54.1 (67.5) (239.4)
Total financing liabilities (1,797.6) (21.6) (70.5) (1,889.7)
Net debt (1,678.0) (27.0) (78.1) (1,783.1)
2022 At Cash flows Other(1) At
1 January US$m US$m 31 December
2022 2022
US$m US$m
Cash and cash equivalents 528.9 (405.0) (4.3) 119.6
External debt (1,295.5) (261.2) (14.9) (1,571.6)
Lease liabilities (181.9) 40.8 (84.9) (226.0)
Total financing liabilities (1,477.4) (220.4) (99.8) (1,797.6)
Net debt (948.5) (625.4) (104.1) (1,678.0)
1 Other includes foreign exchange and non-cash interest
movements.
Refer to Note 20 for further details on the year-on-year movements in loans.
29. Loss per share
Basic loss per share has been calculated by dividing the total loss for the
year by the weighted average number of shares in issue during the year after
adjusting for shares held in the EBT.
To calculate diluted loss per share, the weighted average number of ordinary
shares in issue is adjusted to assume conversion of all dilutive potential
shares. Share options granted to employees where the exercise price is less
than the average market price of the Company's ordinary shares during the year
are considered to be dilutive potential shares. Where share options are
exercisable based on performance criteria and those performance criteria have
been met during the year, these options are included in the calculation of
dilutive potential shares.
The Directors believe that Adjusted EBITDA per share is a useful additional
measure to better understand the performance of the business (refer to Note
4).
Loss per share is based on:
2023 2022
US$m US$m
Loss after tax for the year attributable to owners of the Company (100.1) (171.5)
Adjusted EBITDA (Note 4) 369.9 282.8
2023 2022 Number
Number
Weighted average number of ordinary shares used to calculate basic earnings 1,048,501,270 1,047,039,919
per share
Weighted average number of dilutive potential shares 119,278,686 114,017,600
Weighted average number of ordinary shares used to calculate diluted earnings 1,167,779,956 1,161,057,519
per share
Loss per share 2023 cents 2022 cents
Basic (10) (16)
Diluted (10) (16)
Adjusted EBITDA per share 2023 cents 2022 cents
Basic 35 27
Diluted 32 24
The calculation of basic and diluted loss per share is based on the net loss
attributable to equity holders of the Company entity for the year of US$100.1
million (2022: US$171.5 million). Basic and diluted loss per share amounts are
calculated by dividing the net loss attributable to equity shareholders of the
Company entity by the weighted average number of shares outstanding during the
year.
The calculation of Adjusted EBITDA per share and diluted EBITDA per share are
based on the Adjusted EBITDA earnings for the year of US$369.9 million (2022:
US$282.8 million). Refer to Note 4 for a reconciliation of Adjusted EBITDA to
net loss before tax.
30. Non-controlling Interest
Summarised financial information in respect of each of the Group's
subsidiaries that have material non-controlling interests is set out below.
The summarised financial information below represents amounts before
intragroup eliminations.
Oman
2023 2022
US$m US$m
(Restated)(1)
Current assets 39.7 11.3
Non-current assets 509.4 519.6
Current liabilities (254.6) (114.8)
Non-current liabilities (247.2) (256.3)
Equity attributable to owners of the Company 33.1 111.9
Non-controlling interests 14.2 47.9
2023 2022
US$m US$m
Revenue 57.5 3.6
Expenses (81.4) (9.5)
Loss for the year (23.9) (5.9)
Loss attributable to owners of the Company (16.7) (4.1)
Loss attributable to the non-controlling interests (7.2) (1.8)
Loss for the year (23.9) (5.9)
Net cash inflow/(outflow) from operating activities 22.9 (4.6)
Net cash (outflow)/inflow from investing activities (13.5) -
Net cash inflow/(outflow) from financing activities (2.1) 8.2
Net cash inflow/(outflow) 7.3 3.6
1 Restatement on finalisation of acquisition accounting.
31. Acquisition of subsidiary undertakings
a) Finalisation of Oman acquisition purchase price accounting (December 2022)
On 8 December 2022, the Group completed the acquisition of Oman Tech
Infrastructure SAOC of the previously announced transaction with Omantel. The
Group has acquired 70% of the share capital of which includes the passive
infrastructure on 2,519 sites, colocation contracts and certain supplier
contracts. The Group has treated this as a single business combination
transaction and accounted for it in accordance with IFRS 3 - Business
Combinations (IFRS 3) using the acquisition method. The total consideration in
respect of the transaction was US$494.6 million. Goodwill arising on this
business combination has been allocated to the Oman CGU. The Goodwill is
deductible for tax purposes. This acquisition is in line with the Group's
strategy. On the same date, a 30% stake in the business was sold to Rakiza
Telecommunications Infrastructure LLC as part of the same agreement for total
consideration of US$89.1 million. Non-controlling interest is recognised under
the fair value method as permitted under IFRS 3.
The breakdown of the acquisition price and goodwill generated by the
acquisition is as follows:
Previously reported Adjustment Final allocation
US$m US$m US$m
Total consideration paid 494.6 - 494.6
Repayment of debt to seller (328.8) - (328.8)
Consideration paid in cash for minority interest (49.7) - (49.7)
Deferred receivable (7.3) - (7.3)
IFRS Consideration 108.8 - 108.8
Non-controlling interest 49.7 - 49.7
Less: Net assets acquired (135.0) (6.9) (141.9)
Resulting goodwill 23.5 (6.9) 16.6
Following completion of the purchase price accounting process and additional
information received post-closing the fair value of the initial assets
acquired have been adjusted as follows:
Identifiable assets acquired at 8 December 2022: Previously reported Adjustment Final allocation
US$m US$m US$m
Assets 147.6 (23.3) 124.3
Fair value of property, plant and equipment
Fair value of intangible assets 322.8 (1.4) 321.4
Right of use assets 19.4 26.5 45.9
Other assets 0.7 - 0.7
Cash 0.6 - 0.6
Total assets 491.1 1.8 492.9
Liabilities (7.9) 4.6 (3.3)
Other liabilities
Lease liabilities (19.4) 0.5 (18.9)
Loans (328.8) - (328.8)
Total liabilities (356.1) 5.1 (351.0)
Total net identifiable assets 135.0 6.9 141.9
Prior year comparatives have been restated in accordance with the above.
32. Subsequent events
There were no material subsequent events.
Glossary
We have prepared the annual report using a number of conventions, which you
should consider when reading information contained herein as follows.
All references to 'we', 'us', 'our', 'HT Group', 'Helios Towers' our 'Group'
and the 'Group' are references to Helios Towers, plc and its subsidiaries,
taken as a whole.
'2G' means the second-generation cellular telecommunications network
commercially launched on the GSM and CDMA standards.
'3G' means the third-generation cellular telecommunications networks that
allow simultaneous use of voice and data services, and provide high-speed data
access using a range of technologies.
'4G' means the fourth-generation cellular telecommunications networks that
allow simultaneous use of voice and data services, and provide high-speed data
access using a range of technologies (these speeds exceed those available for
3G).
'5G' means the fifth generation cellular telecommunications networks. 5G does
not currently have a publicly agreed upon standard; however, it provides
high-speed data access using a range of technologies that exceed those
available for 4G.
'Adjusted EBITDA' is defined by management as loss before tax for the year,
adjusted for finance costs, other gains and losses, interest receivable, loss
on disposal of property, plant and equipment, amortisation of intangible
assets, depreciation and impairments of property, plant and equipment,
depreciation of right-of-use assets, deal costs for aborted acquisitions, deal
costs not capitalised, share-based payments and long-term incentive plan
charges, and other adjusting items. Adjusting items are material items that
are considered one-off by management by virtue of their size and/or incidence.
'Adjusted EBITDA margin' means Adjusted EBITDA divided by revenue.
'Adjusted gross margin' means Adjusted Gross Profit divided by revenue.
'Adjusted gross profit' means gross profit adding back site and warehouse
depreciation.
'Airtel' means Airtel Africa.
'amendment revenue' means revenue from amendments to existing site contracts
when tenants add or modify equipment, taking up additional vertical space,
wind load capacity and/or power consumption under an existing site contract.
'anchor tenant' means the primary customer occupying each site.
'Analysys Mason' means Analysys Mason Limited.
'Annualised Adjusted EBITDA' means Adjusted EBITDA for the last three months
of the respective period, multiplied by four, adjusted to reflect the
annualised contribution from acquisitions that have closed in the last three
months of the respective period.
'Annualised portfolio free cash flow' means portfolio free cash flow for the
respective period, adjusted to annualise for the impact of acquisitions closed
during the period.
'average remaining life' means the average of the periods through the
expiration of the term under certain agreements.
'APMs' Alternative Performance Measures are measures of financial performance,
financial position or cash flows that are not defined or specified under IFRS
but used by the Directors internally to assess the performance of the Group.
'Average grid hours' or 'average grid availability' reflects the estimated
site weighted average of grid availability per day across the Group portfolio
in the reporting year.
'build-to-suit/BTS' means sites constructed by our Group on order by a MNO.
'CAGR' means compound annual growth rate.
'Carbon emissions per tenant' is the metric used for our intensity target. The
carbon emissions include Scope 1 and 2 emissions for the markets included in
the target and the average number of tenants is calculated using monthly data.
'Chad' means Republic of Chad.
'colocation' means the sharing of site space by multiple customers or
technologies on the same site, equal to the sum of standard colocation tenants
and amendment colocation tenants.
'colocation tenant' means each additional tenant on a site in addition to the
primary anchor tenant and is classified as either a standard or amendment
colocation tenant.
'committed colocation' means contractual commitments relating to prospective
colocation tenancies with customers.
'Company' means Helios Towers, Ltd prior to 17 October 2019, and Helios Towers
plc on or after 17 October 2019.
'Congo Brazzaville' otherwise also known as the Republic of Congo.
'contracted revenue' means total undiscounted revenue as at that date with
local currency amounts converted at the applicable average rate for US Dollars
held constant. Our contracted revenue calculation for each year presented
assumes: (i) no escalation in fee rates, (ii) no increases in sites or
tenancies other than our committed tenancies (which include committed
colocations and/or committed anchor tenancies), (iii) our customers do not
utilise any cancellation allowances set forth in their MLAs (iv) our customers
do not terminate MLAs early for any reason and (v) no automatic renewal.
'corporate capital expenditure' primarily relates to furniture, fixtures and
equipment.
'CPI' means Consumer Price Index.
'Downtime per tower per week' refers to the average amount of time our sites
are not powered across each week within our 7 markets that Helios Towers was
operating in across 2022 and 2023.
'DEI' means Diversity, Equity and Inclusion.
'Deloitte' means Deloitte LLP.
'DRC' means Democratic Republic of Congo.
'ESG' means Environmental, Social and Governance.
'Executive Committee' means the Group CEO, the Group CFO, the regional CEO's,
the Director of Business Development and Regulatory Affairs, the Director of
Delivery and Business Excellence, the Director of Operations and Engineering,
the Director of Human Resources, the Director of Property and SHEQ and the
General Counsel and Company Secretary.
'Executive Leadership Team' means the Executive Committee, the regional
directors, the country managing directors and the functional specialists.
'Executive Management' means Executive Committee.
'FCA' means 'Financial Conduct Authority'.
'FRC' means the Financial Reporting Council.
'FRS 102' means the Financial Reporting Standard Applicable in the UK and
Republic of Ireland.
'FTSE' refers to 'Financial Times Stock Exchange'.
'FTSE WLR' means FTSE Women Leaders Review.
'Free Cash Flow' means Adjusted free cash flow less net change in working
capital, cash paid for adjusting and EBITDA adjusting items, cash paid in
relation to non-recurring taxes and proceeds on disposal of assets.
'Gabon' means Gabonese Republic.
'Ghana' means the Republic of Ghana.
'GHG' means greenhouse gases.
'gross debt' means non-current loans and current loans and long-term and
short-term lease liabilities.
'gross leverage' means gross debt divided by annualised Adjusted EBITDA.
'gross margin' means gross profit, adding site and warehouse depreciation,
divided by revenue.
'growth capex' or 'growth capital expenditure' relates to (i) construction of
build-to-suit sites (ii) installation of colocation tenants and (ii) and
investments in power management solutions.
'Group' means Helios Towers, Ltd (HTL) and its subsidiaries prior to 17
October 2019, and Helios Towers plc and its subsidiaries on or after 17
October 2019.
'GSMA' is the industry organisation that represents the interests of mobile
network operators worldwide.
'Hard currency Adjusted EBITDA' refers to Adjusted EBITDA that is denominated
in US Dollars, US$ pegged, US Dollar linked or Euro pegged.
'Hard currency Adjusted EBITDA %' refers to Hard currency Adjusted EBITDA as a
% of Adjusted EBITDA
'Helios Towers Congo Brazzaville' or 'HT Congo Brazzaville' means Helios
Towers Congo Brazzaville SASU.
'Helios Towers DRC' or 'HT DRC' means HT DRC Infraco SARL.
'Helios Towers Ghana' or 'HT Ghana' means HTG Managed Services Limited.
'Helios Towers Oman' or 'HT Oman' means Oman Tech Infrastructure SAOC.
'Helios Towers plc' means the ultimate Company of the Group.
'Helios Towers South Africa' or 'HTSA' means Helios Towers South Africa
Holdings (Pty) Ltd and its subsidiaries.
'Helios Towers Tanzania' or 'HT Tanzania' means HTT Infraco Limited.
'IAL' means Independent Audit Limited.
'IFRS' means International Financial Reporting Standards as adopted by the
European Union.
'independent tower company' means a tower company that is not affiliated with
a telecommunications operator.
'Indicative site ROIC' is for illustrative purposes only, and based on Group
average build-to-suit tower economics as of December 2023. Site ROIC
calculated as site portfolio free cash flow divided by indicative capital
expenditure. Site portfolio free cash flow reflects indicative Adjusted gross
profit per site less ground lease expense and non-discretionary capex.
'Indicative site Adjusted gross profit and profit/(loss) before tax' is for
illustrative purposes only, and based on Group average build-to-suit tower
economics as of December 2023. Site profit/(loss) before tax calculated as
indicative Adjusted gross profit per site less indicative selling, general and
administrative (SG&A), depreciation and financing costs.
'IPO' means Initial Public Offering.
'ISO accreditations' refers to the International Organisation for
Standardisation and its published standards: ISO 9001 (Quality Management),
ISO 14001 (Environmental Management), ISO 45001 (Occupational Health and
Safety) and ISO 37001 (Anti-Bribery Management), ISO 27001 (Information
Security Management).
'IVMS' means in-vehicle monitoring system.
'Lath' means Lath Holdings, Ltd.
'Lean Six Sigma' is a renowned approach that helps businesses increase
productivity, reduce inefficiencies and improve the quality of output.
'lease-up' means the addition of colocation tenancies to our sites.
'Levered portfolio free cash flow' means portfolio free cash flow less net
payment of interest.
'Lost Time Injury Frequency Rate' means the number of lost time injuries per
one million person-hours worked (12-month roll)
'LSE' means London Stock Exchange.
'LTIP' means Long Term Incentive Plan.
'Madagascar' means Republic of Madagascar.
'Malawi' means Republic of Malawi.
'maintenance capital expenditure' means capital expenditures for periodic
refurbishments and replacement of parts and equipment to keep existing sites
in service.
'Mauritius' means the Republic of Mauritius.
'MENA' means Middle East and North Africa.
'Middle East' region includes thirteen countries namely Hashemite Kingdom of
Jordan, Kingdom of Bahrain, Kingdom of Saudi Arabia, Republic of Iraq,
Republic of Lebanon, State of Kuwait, Sultanate of Oman, State of Palestine,
State of Qatar, Syrian Arab Republic, The Republic of Yemen, The Islamic
Republic of Iran and The United Arab Emirates.
'Millicom' means Millicom International Cellular SA.
'MLA' means master lease agreement.
'MNO' means mobile network operator.
'mobile penetration' means the amount of unique mobile phone subscriptions as
a percentage of the total market for active mobile phones.
'MTN' means MTN Group Ltd.
'MTSAs' means master tower services agreements.
'Near miss' is an event not causing harm but with the potential to cause
injury or ill health.
'NED' means Non- Executive Director.
'net debt' means gross debt less cash and cash equivalents.
'net leverage' means net debt divided by last quarter annualised Adjusted
EBITDA.
'net receivables' means total trade receivables (including related parties)
and accrued revenue, less deferred income.
'Newlight' means Newlight Partners LP.
'Oman' means Sultanate of Oman.
'Orange' means Orange S.A.
'Organic tenancy growth' means the addition of BTS or colocations.
'our established markets' refers to Tanzania, DRC, Congo Brazzaville, Ghana
and South Africa.
'our markets' or 'markets in which we operate' refers to Tanzania, DRC, Congo
Brazzaville, Ghana, South Africa, Senegal, Madagascar, Malawi and Oman.
'Percentage of employees trained in Lean Six Sigma' is the percentage of
permanent employees who have completed the Orange or Black Belt training
programme.
'Population coverage' refers to the Company estimated potential population
that falls within the network coverage footprint of our towers, calculated
using WorldPop source data.
'Portfolio free cash flow' defined as Adjusted EBITDA less maintenance and
corporate capital additions, payments of lease liabilities (including interest
and principal repayments of lease liabilities) and tax paid.
'PoS' means points of service, which is an MNO's antennae equipment
configuration located on a site to provide signal coverage to subscribers. At
Helios Towers, a standard PoS is equivalent to one tenant on a tower.
'Power uptime' reflects the average percentage our sites are powered across
each month, and is a key component of our service offering to customers. For
comparability, figures presented only reflect portfolios that are subject to
power SLAs for both the current and prior reporting period. This includes
Tanzania, DRC, Senegal, Congo Brazzaville, South Africa, Ghana and Madagascar.
'Principal Shareholders' refers to Quantum Strategic Partners Ltd, Helios
Investment Partners and Albright Capital Management.
'Project 100' refers to our commitment to invest US$100 million between 2022
and 2030 on carbon reduction and carbon innovation.
'Quantum' means Quantum Strategic Partners, Ltd.
'Road Traffic Accident Frequency Rate' means the number of work related road
traffic accidents per 1 million kilometres driven (12-month roll).
'ROIC' means return on invested capital and is defined as annualised portfolio
free cash flow divided by invested capital.
'Rural area' while there is no global standardised definition of rural, we
have defined rural as milieu with population density per square kilometre of
up to 1,000 inhabitants. These include greenfield sites, small villages and
towns with a series of small settlement structures.
'Rural coverage' is the population living within the footprint of a site
located in a rural area.
'Rural sites' means sites which align to the above definition of 'Rural area'.
'Senegal' means the Republic of Senegal.
'Shares' means the shares in the capital of the Company.
'Shareholders Agreement' means the agreement entered into between the
Principal Shareholders and the Company on 15 October 2019, which grants
certain governance rights to the Principal Shareholders and sets out a
mechanism for future sales of shares in the capital of the Company.
'SHEQ' means safety, health, environment and quality.
'site acquisition' means a combination of MLAs or MTSAs, which provide the
commercial terms governing the provision of site space, and individual ISA,
which act as an appendix to the relevant MLA or MTSA, and include
site-specific terms for each site.
'site agreement' means the MLA and ISA executed by us with our customers,
which act as an appendix to the relevant MLA and includes certain
site-specific information (for example, location and any grandfathered
equipment).
'SLA' means service-level agreement.
'South Africa' means the Republic of South Africa.
'standard colocation' means tower space under a standard tenancy site contract
rate and configuration with defined limits in terms of the vertical space
occupied, the wind load and power consumption.
'standard colocation tenant' means a customer occupying tower space under a
standard tenancy lease rate and configuration with defined limits in terms of
the vertical space occupied, the wind load and power consumption.
'strategic suppliers' means suppliers that deliver products or provide us with
services deemed critical to executing our strategy such as site maintenance
and batteries.
'Sub-Saharan Africa' or 'SSA' means African countries that are fully or
partially located south of the Sahara.
'Tanzania' means the United Republic of Tanzania.
'TCFD' means Task Force on Climate-Related Financial Disclosures.
'telecommunications operator' means a company licensed by the government to
provide voice and data communications services.
'tenancy' means a space leased for installation of a base transmission site
and associated antennae.
'tenancy ratio' means the total number of tenancies divided by the total
number of our sites as of a given date and represents the average number of
tenants per site within a portfolio.
'tenant' means an MNO that leases vertical space on the tower and portions of
the land underneath on which it installs its equipment.
'the Code' means the UK Corporate Governance Code published by the FRC and
dated July 2018, as amended from time to time.
'the Regulations' means the Large and Medium-sized Companies and Groups
(Accounts and Reports) regulations 2008 (as amended).
'the Trustee' means the trustee(s) of the EBT.
'Tigo' refers to one or more subsidiaries of Millicom that operate under the
commercial brand 'Tigo'.
'total colocations' means standard colocations plus amendment colocations as
of a given date.
'total recordable case frequency rate' means the total recordable injuries
that occur per one million hours worked (12-month roll).
'total tenancies' means total anchor, standard and amendment colocation
tenants as of a given date.
'tower contract' means the MLA and individual site agreements executed by us
with our customers, which act as a schedule to the relevant MLA and includes
certain site-specific information (for example, location and equipment).
'towerco' means tower company, a corporation involved primarily in the
business of building, acquiring and operating telecommunications towers that
can accommodate and power the needs of multiple tenants.
'tower sites' means ground-based towers and rooftop towers and installations
constructed and owned by us on property (including a rooftop) that is
generally owned or leased by us.
'TSR' means total shareholder return.
'UK Corporate Governance Code' means the UK Corporate Governance Code
published by the Financial Reporting Council and dated July 2018, as amended
from time to time.
'UK GAAP' means the United Kingdom Generally Accepted Accounting Practice.
'upgrade capex' or 'upgrade capital expenditure' comprises structural,
refurbishment and consolidation activities carried out on selected acquired
sites.
'US-style contracts' means the structure and tenor of contracts are broadly
comparable to large US-based companies
'Viettel' means Viettel Tanzania Limited.
'Vodacom' means Vodacom Group Limited.
'Vodacom Tanzania' means Vodacom Tanzania plc.
Our customers, as well as certain other telecommunications operators named in
this Annual Report, are generally referred to in this document by their trade
names. Our contracts with these customers are typically with an entity or
entities in that customer's group of companies.
Disclaimer:
This release does not constitute an offering of securities or otherwise an
invitation or inducement to any person to underwrite, subscribe for or
otherwise acquire or dispose of securities in Helios Towers plc (the
'Company') or any other member of the Helios Towers group (the 'Group'), nor
should it be construed as legal, tax, financial, investment or accounting
advice. This release contains forward-looking statements which are subject to
known and unknown risks and uncertainties because they relate to future
events, many of which are beyond the Group's control. These forward-looking
statements include, without limitation, statements in relation to the
Company's financial outlook and future performance. No assurance can be given
that future results will be achieved; actual events or results may differ
materially as a result of risks and uncertainties facing the Group.
You are cautioned not to rely on the forward-looking statements made in this
release, which speak only as of the date of this announcement. The Company
undertakes no obligation to update or revise any forward-looking statement to
reflect any change in its expectations or any change in events, conditions or
circumstances. Nothing in this release is or should be relied upon as a
warranty, promise or representation, express or implied, as to the future
performance of the Company or the Group or their businesses.
This release also contains non-GAAP financial information which the Directors
believe is valuable in understanding the performance of the Group. However,
non-GAAP information is not uniformly defined by all companies and therefore
it may not be comparable with similarly titled measures disclosed by other
companies, including those in the Group's industry. Although these measures
are important in the assessment and management of the Group's business, they
should not be viewed in isolation or as replacements for, but rather as
complementary to, the comparable GAAP measures.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR KZGMFMFFGDZZRecent news on Helios Towers
See all newsREG - Helios Towers PLC - 2024 Annual General Meeting Results
AnnouncementREG - Helios Towers PLC - Notice of Q1 2024 Results Date & Conference Call
AnnouncementREG - Helios Towers PLC - Credit rating upgrade
AnnouncementREG - Helios Towers PLC - Director/PDMR Shareholding
AnnouncementREG - Helios Towers PLC - Total Voting Rights
Announcement