Helios Towers has made significant strides in its financial performance, reporting its first positive cash flow in 2024 thanks to a renewed colocation strategy. This UK-based company, operating in the Middle East and Africa, credits its success to doubling down on colocation rather than opening new sites, leading to steady revenue growth.
CEO Tom Greenwood expressed optimism, highlighted by a 14% jump in adjusted EBITDA to $421 million last year and a return on invested capital rising to 12.9%. He mentioned, “The output of that progress is a US$100m improvement in free cash flow.” Looking forward, Helios aims to further expand its Return on Invested Capital (ROIC) while reducing debt as part of its “2.2x by 2026 strategy,” which involves increasing tenancy ratios. This strategy is pivotal as the company shifts focus from constructing new towers to optimizing existing assets, enabling higher financial returns and sustainable growth.
Despite the optimistic outlook, challenges remain. Helios Towers aims to raise its tenancy ratio to 2.2x by 2026, currently at 2.05x. Reaching this ambitious target requires the company’s utmost attention. Currently, Helios operates 14,325 sites and 29,406 tenancies. Continued tenancy growth is vital to hitting Helios’ financial benchmarks.
Furthermore, Greenwood also suggested potential investments in growth opportunities, though the specifics remain vague. Unlike some giants like American Tower, Helios is still a comparatively smaller player, prompting speculation about possible mergers or acquisitions as a means to widely expand its footprint.
Financial prudence remains essential. Though the potential road to expansion seems stable, any major financial movement such as mergers seems unlikely in the near future. This is due to the company’s commitments like dividend payments and debt reduction, which saw a 3% improvement last year.
