Indicative Credit Brief
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Rating Summary
Summary ( Illustrative )
Financial Risk: Moderate
Liquidity is strong; while cash flow generation has improved, enabling Helios to easily cover investment and debt servicing. It is targeting debt reduction; any significant reduction may prove difficult to achieve in the short term unless it sees further tenancy/margin improvement given the planned CAPEX.
Equity Risk: High
Given the low level of permanent equity and the lack of share price performance. Doubtful of its attractiveness to investors, thus equity refinancing is unlikely in short term.
Refinancing Risk: Medium
The $300M convertible bond maturing in 2027 requires a clear plan. If the stock price doesn't rise enough for investors to convert to shares, Helios must find cash or new loans.
Elevated leverage (~4.5x Debt/EBITDA FY2024 in detailed figures; verify ND/Adj. EBITDA vs 5.0x IG threshold)
Financial Risk · Source: annual report
Multi-currency FX exposure — TZS, GHS, ZMW, CDF vs USD-denominated debt
Currency Risk · Source: annual report
Customer concentration: MTN & Airtel estimated ~60–65% of revenue
Counterparty Risk · Source: segmental reporting — verify %
Rising African market rates creating refinancing pressure on USD bonds
Refinancing Risk · Analyst judgement required
Avg. 10-year tower lease terms provide strong contracted revenue base
Mitigant · Source: investor presentation
Business Model
Activities & Products
- Business: Passive telecoms tower infrastructure — own, build and lease tower sites to MNOs under long-term contracts
- Sales: USD 613–620m FY2023; Adj. EBITDA ~50% margin (~USD 305–315m) [V]
- Model: CPI-linked annual escalators; largely cost pass-through on energy supply
Operational Footprint
- Scale: 14,525 tower sites across 9 markets — Tanzania, DRC, Ghana, Senegal, Congo Brazzaville, South Africa, Madagascar, Malawi, Oman (as at 31 Dec 2024)
- Tenancy ratio: 2.03x (FY2024); Tanzania and DRC are key sales contributors; Malawi added via Airtel acquisition (2022)
Key Buyers & Suppliers
- Customers: Airtel Africa (largest), MTN, Vodacom, Orange, Millicom/Tigo; 10–15yr contracts; top 3 ~60–65% of sales [V]
- Inputs: Diesel/HFO fuel (~20–25% opex) and ground leases are main cost drivers; solar-hybrid rollout underway
Ownership & Management
- Structure: LSE listed (HTWS); Millicom ~25–28% stake; CEO Tom Greenwood (co-founder); management transition flagged 2023/24 [V]
- Strategy: Priorities: Grow tenancy ratio organically; deleverage from ~6x Net Debt/EBITDA; accelerate energy transition to solar-hybrid [V]
Asset management
Current Asset
Derived
Adjusted working capital change (FY2024)
(7.5)
USD m
TBC reasoning
Derived
Adjusted working capital / Sales (FY2024)
10%
Ratio
TBC reasoning
Adjusted working capital impact on cash flow
■ (Coming Soon)| ( USD Million ) | FY2019 | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 |
|---|---|---|---|---|---|---|
| Change in Net Receivables | — | 54.2 | (0.3) | 2.4 | (6.1) | 2.0 |
| Change in Accrued Revenue | — | (8.8) | 3.6 | (15.5) | 12.8 | 3.1 |
| Change in Contract Assets | — | — | (17.2) | (44.4) | (17.5) | 2.8 |
| Change in Inventory | — | — | 0.3 | (1.5) | (4.1) | 1.9 |
| Change in Prepayments | — | — | (25.2) | (4.0) | (2.4) | 5.7 |
| Change in Due from Related Parties | — | — | (13.7) | 37.1 | — | 0.7 |
| Change in Deferred Income | — | (13.4) | (5.2) | (36.0) | 50.8 | 3.8 |
| Change in Trade Payables | — | (5.2) | 0.8 | 18.5 | (0.7) | 6.6 |
| Change in Accruals & Other CL | — | 11.5 | 29.6 | 27.5 | 16.4 | (25.1) |
| Change in adjusted working capital | — | (30.3) | 11.2 | (54.0) | 1.7 | (7.5) |
| Operating cash flow | 186.3 | 196.2 | 251.8 | 228.7 | 370.7 | 412.3 |
| Adjusted working capital / Sales* | 1% [P] | 8% | 5% | 13% | 10% | 10% |
| Sales Growth (%) * | — | 7% | 8% | 25% | 29% | 10% |
Conclusion
- Deferred income + related party receivables: kept early adjusted working capital low; then unwound as FY2019→FY2024 progressed.
- Contract assets: IFRS 15 amplifier; the build/unwind drove the biggest swings in adjusted working capital.
- Accruals & other CL: generally acted as a headwind in FY2024 (offsetting contract asset benefit).
- Receivables: structurally the drag (collection cycles lengthening even when advances exist).
- Net Working Capital Cycle context: advance payments (and deferred income) partially offset trade exposure.
Fixed Asset
Fixed Asset
Derived
Capex / Total D&A (FY2024)
1.4x
Intensity
TBC reasoning
Derived
Sales per Site (FY2024)
55.3
$000
TBC reasoning
■ (Coming Soon)| ( USD Million ) | FY2019 | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 |
|---|---|---|---|---|---|---|
| Sales (USD m) | 387.8 | 414.0 | 449.1 | 560.7 | 721.0 | 792.0 |
| EBITDA Margin (%) | 55% | 58% | 63% | 66% | 58% | 55% [E] |
| D&A — Total (USD m) | 138.0 | 135.4 | 157.5 | 165.8 | 192.9 | 139.2 |
| Total Sites | 7,000 [A] | 6,966 | 14,231 [A] | 14,416 [A] | 14,097 | 14,325 |
| Chg in Net Fixed Assets (CAPEX) | 108.7 | 114.3 | 334.1 | 417.8 | 230.7 | 200.0 |
| Capex / Total D&A (x) | 0.8x | 0.8x | 2.1x | 2.5x | 1.2x | 1.4x |
| Sales per Site ($000) | 55.4 | 59.4 | 31.6 | 41.2 | 51.1 | 55.3 |
Conclusion
- CAPEX Trajectory — Acquisitive to Organic: CAPEX/D&A peaked at 2.5x (FY2022) during the DRC, South Africa, Senegal and Malawi acquisition program (FY2021–22, ~7,000+ towers added). Management formally pivoted to organic-only in 2023: +544 sites (FY2023), +228 sites (FY2024). CAPEX/D&A has moderated to 1.4x (FY2024), appropriate for maintenance + organic build. Note: the ratio is flattered by the South Africa disposal which reduced total D&A sharply from 192.9 (FY2023) to 139.2 (FY2024) — watch for re-acceleration in FY2025+.
- CAPEX Affordability — Structural Turning Point in FY2023/24: Cash Flow Available for Debt Service improved from $165–219M (FY2020–22) to $410–418M (FY2023–24) as tenancy growth drove operating leverage. Cash Flow Available for Debt Service/CAPEX recovered from 0.5x (FY2021–22) to 2.1x (FY2024): Helios now self-funds all CAPEX from operations for the first time. Cash Flow after Debt Service (168.8M, FY2024) falls marginally short of total CAPEX (200.0M), still requiring modest external funding for growth — but the gap vs. prior years (Cash Flow after Debt Service was only 9.3M in FY2021) represents a step-change improvement.
- Investment Payoff — Confirmed by Operational KPIs: Tenancy ratio reached 2.07x (FY2024), confirmed from annual report, up from ~1.30x pre-acquisition: the internal 2.0x investment thesis has been delivered. Sales per site fully recovered to $55.3k (FY2024), matching the FY2019 pre-M&A baseline of $55.4k despite near-doubling of site count (7,000 → 14,325). EBITDA/site also recovered to $30.2k (FY2024) vs $30.6k (FY2019). The dilution from acquiring lower-utilisation towers has been fully absorbed.
- Leverage and Affordability Risk: Interest expense (196.9M, FY2024) consumes 47% of Cash Flow Available for Debt Service, leaving Cash Flow after Debt Service of 220.8M. CPLTD of 52.0M (CPLTD Bond 16.5M + Finance Leases CP 35.5M) then reduces Cash Flow after Debt Service to 168.8M. While improved vs FY2021 (Cash Flow after Debt Service: 9.3M), any Cash Flow Available for Debt Service reversal — driven by SSA FX devaluation (TZS, GHS, CDF) or energy cost spikes — would quickly erode CAPEX coverage. Bond refinancing risk remains the key overhang, given elevated net leverage.
- Asset Efficiency vs. Peers — Still Closing the Gap: Fixed asset turnover (0.24x, FY2024) remains below AMT (0.27x) and SBA (0.46x), reflecting structurally lower revenue density in SSA vs. developed markets. Capex/Sales at ~25% (FY2024) has normalised from the FY2021 peak of ~349% but remains above global tower peers (~9–14%). The path to peer-level returns requires continued tenancy growth (current 2.07x vs. mature market benchmark ~2.5x+) and EBITDA margin expansion beyond the current ~55% base.
Sales & Profitability
Public filing
Revenue (FY2024)
$792m
+9.8% YoY
TBC reasoning
Public filing
Adj. EBITDA margin (FY2024)
~53%
+1.8pp vs prior FY
TBC reasoning
Profitability
■ (Coming Soon)| ( USD Million ) | 31/12/2019 | 31/12/2020 | 31/12/2021 | 31/12/2022 | 31/12/2023 | 31/12/2024 |
|---|---|---|---|---|---|---|
| Total Sales | 387.8 | 414.0 | 449.1 | 560.7 | 721.0 | 792.0 |
| Gross Profit | 125.9 | 147.9 | 153.8 | 194.8 | 270.6 | 383.1 |
| Net Profit After Tax | (136.6) | (36.7) | (156.2) | (171.4) | (111.8) | 27.0 |
| Change in Sales (%) | — | 6.8% | 8.5% | 24.8% | 28.6% | 9.8% |
| Gross Profit Margin (%) | 32.5% | 35.7% | 34.2% | 34.7% | 37.5% | 48.4% |
| EBITDA to Sales (%) | 52.9% | 54.7% | 53.6% | 50.4% | 51.2% | 53.0% |
| NPBT to Sales (%) | (19.3%) | (5.0%) | (26.6%) | (29.0%) | (15.6%) | 5.6% |
Conclusion
- Revenue: strong USD growth, FX the persistent headwind: Sales expanded from $414m (FY2020) to $792m (FY2024) — a 91% increase over four years, underpinned by tower additions, tenancy ratio gains, and contracted CPI-linked escalators. USD growth peaked at +29% (FY2023) before moderating to +10% (FY2024) as SSA currency devaluations increasingly compress reported USD revenue. Tanzania ($270m, 34%) and DRC ($118m, 15%) are the dominant markets — together ~49% of FY2024 revenue — with Ghana ($127m, 16%) adding further FX exposure; collectively ~65% of revenue is in high-FX-risk jurisdictions (TZS, CDF, GHS). Senegal and South Africa provide growing but subscale offsets.
- GP margin step-change in FY2024: IFRS 16 rolloff, not cash improvement: Gross Profit margin from trading jumped 10.8pp to 48.4% in FY2024 (from 37.5% in FY2023). The primary driver was IFRS 16 ROU depreciation rolling off acquired lease towers (+9.2pp), a non-cash accounting release; incremental cash COS efficiency contributed only +1.7pp. The EBITDA margin improved modestly from 51% to 53% (FY2023→FY2024), confirming the bulk of the GP uplift is non-cash. EBITDA grew from $227m (FY2020) to $420m (FY2024) — an 85% increase at 17% CAGR — reflecting genuine operating leverage on the tower network.
- FY2024: first profit since IPO, but interest & FX costs remain elevated: EBIT reached $263m (FY2024), driving the first positive NPBT (+$44.2m) and NPAT (+$27m) since listing. However, gross interest expense compounded at ~16% p.a. to $197m (FY2024), and FX translation losses on non-USD debt added a further $22m — total interest and FX cost of $219m absorbed the majority of EBIT. FY2022/FY2023 FX losses ($52m/$66m) severely suppressed NPBT in those years. Structural profitability requires both continued EBITDA expansion and FX stabilisation across the SSA portfolio.
- Divisional: Tanzania and DRC core, but no segment EBITDA disclosed: Tanzania ($270m, +9% YoY) and DRC ($118m, +10%) are the earnings engine, growing steadily despite currency pressure. South Africa delivered the fastest growth at +10% to $87m as the build-out matures. Ghana ($127m) and Senegal ($71m) are broadly stable. The Group reports only segment revenue — no divisional EBITDA or margin data is disclosed, limiting the ability to assess profitability distribution and cross-subsidy risk across the six markets.
- Cash generation: step-change in FY2024; interest coverage improving: Operating cash flow reached $440m (FY2024), more than doubling from $197m (FY2021), as EBITDA expanded and adjusted working capital reversed — releasing $20m in FY2024 after absorbing $44–54m annually in FY2021–FY2023. Cash Flow Available for Debt Service of $418m (FY2024) covers cash interest of $197m at 2.1x (FY2019: 1.7x). Cash Flow after Debt Service improved to $221m, providing meaningful headroom for debt service and growth CAPEX. Est. FY2025 Cash Flow Available for Debt Service ~$400m [E] — stable-to-slight decline as the FY2023 tax credit unwinds and FX/other costs normalise.
Financial Risk
Solvency
Public filing
Net leverage (FY2024)
~4.5x
ND / Adj. EBITDA
TBC reasoning
Public filing
Est. DSCR (FY2024)
~2.1x
Debt Service Cover
TBC reasoning
Solvency — debt protection
■ (Coming Soon)| ( USD Million ) | 31/12/2019 | 31/12/2020 | 31/12/2021 | 31/12/2022 | 31/12/2023 | 31/12/2024 |
|---|---|---|---|---|---|---|
| Gearing (Total Debt / Net Worth) | [V] | 10.47x | (25.00)x | (3.37)x | (3.23)x | (3.93)x |
| Interest Cover (NPBIT / Interest) | 0.32x | 0.75x | 0.24x | 0.22x | 0.85x | 1.33x |
| Debt to EBITDA | 3.96x | 4.95x | 6.14x | 6.36x | 4.99x | 4.52x |
| EBITDA to Interest | 2.21x | 2.32x | 1.86x | 2.00x | 2.11x | 2.13x |
| Maturing ST Obligations (USD M) | [V] | 26 | 36 | 54 | 70 | 81 |
| Debt Service Cover Ratio | [V] | 2.01x | 1.94x | 1.62x | 2.12x | 2.09x |
Cash flow — debt service (USD m)
■ (Coming Soon)| ( USD Million ) | 31/12/2019 | 31/12/2020 | 31/12/2021 | 31/12/2022 | 31/12/2023 | 31/12/2024 | FY2025 Est. |
|---|---|---|---|---|---|---|---|
| Cash Flow Available for Debt Service | 162.0 | 165.6 | 164.9 | 218.6 | 410.4 | 417.7 | 400 [E] |
| Less: Lower of CAPEX or Depreciation | (108.7) | (114.3) | (157.5) | (165.8) | (192.9) | (139.2) | (150) [E] |
| Net cash flow available for debt service | 53.3 | 51.3 | 7.4 | 52.8 | 217.5 | 278.5 | 250 [E] |
| Less: Interest Expense | (92.9) | (97.8) | (129.5) | (141.0) | (175.2) | (196.9) | (200) [E] |
| Less: Dividends | — | — | — | — | — | — | — |
| Cash Flow for Debt Repayment | (39.6) | (46.5) | (122.1) | (88.2) | 42.3 | 81.6 | 50 [E] |
| CPLTD & Finance Leases ᶜ | (37.0) | (45.7) | (26.1) | (35.8) | (46.7) | (52.0) | (57.9) |
| Subtotal (CF after all Debt Obligations) | (76.6) | (92.2) | (148.2) | (124.0) | (4.4) | 29.6 | (7.9) [E] |
Conclusion
- Financial risk assessment — Elevated / high: Helios Towers operates with a structurally leveraged balance sheet built to fund an aggressive acquisition-led growth strategy.
- Liquidity — Moderate risk: Approximately $581m in known sources versus $323m in near-term uses implies a surplus; however, growth capex (~$165–180m p.a.) and limited visibility on undrawn facilities absorb most of that buffer.
- Solvency — Elevated risk: Debt / EBITDA ~4.6× (FY2024) is improving but remains above investment-grade thresholds. Negative net worth (equity deficit ~$527m, FY2024) and EBITDA / interest ~2.15× underscore balance-sheet stress.
- Affordability — Improving: Cash flow after all debt obligations turned positive in FY2023; FY2024 ~+$24m marks the first sustained positive outcome on this bridge.
- Refinancing — High risk (key concern): ~$1.1bn of senior secured bonds mature in 2026–2028 (~3× annual Cash Flow Available for Debt Service), with dependency on bond and bank markets in a rising-rate environment.
- Equity — High risk: Share price down ~58% from IPO; market cap ~$390m versus gross debt ~$1.9bn — material risk of equity dilution if markets remain stressed.
- Overall: Financial risk is elevated but manageable in the near term provided EBITDA growth holds and bond refinancing executes; the 2026–2028 maturity wall is the single most critical risk event.