What Helios Towers (HTWS) Said on Its Q3 Earnings Call

Key Points

• Helios Towers raised its 2026 outlook, targeting about 4,000 tenancy additions, $535 million in EBITDA and more than $235 million in recurring free cash flow. For 2027, it expects over 3,000 additional tenancies and double-digit EBITDA growth.
• Third-quarter revenue increased 17% year over year to $252 million, while tenancies grew 12% to 35,379. The company cited organic tenancy growth as the main revenue driver and reported $6.2 billion in contracted future revenue.
• Shareholder returns and balance-sheet metrics improved: buybacks totaled $72 million since the program began, net leverage fell to 3.4 times EBITDA, and management expects further deleveraging. The company targets more than $80 million in 2026 shareholder distributions.

Helios Towers LON: HTWS raised its 2026 outlook after reporting record tenancy additions and higher third-quarter revenue, and said it expects customer demand to support double-digit earnings growth again in 2027.

The telecommunications infrastructure company expects approximately 4,000 tenancy additions and $535 million in EBITDA for 2026, along with more than $235 million in recurring free cash flow. It also expects shareholder distributions attributable to the year to exceed $80 million through dividends and share buybacks.

For 2027, Helios Towers anticipates more than 3,000 additional tenancies, double-digit EBITDA growth and lower net leverage. It also targets completing its $175 million cumulative buyback program by the end of that year and increasing its dividend by 10%.

Tenancy growth drives revenue

Group CFO Manjit Dhillon said total tenancies rose 12% year over year to 35,379 at the end of the third quarter. The company added 3,435 tenancies in the first nine months, including 942 new sites. Its total site count rose 7% from a year earlier to 15,688.

The tenancy ratio, a measure of infrastructure utilization, increased to 2.3 tenants per site from 2.2 a year earlier. Dhillon cited growth in the Democratic Republic of Congo, Tanzania and Oman, as well as a significant increase in Malawi.

Quarterly revenue rose 17% year over year to $252 million. Organic tenancy growth contributed 11 percentage points of that increase, while inflation and foreign exchange effects offset one another, Dhillon said. Power contributed 5%, principally from price escalations in the Democratic Republic of Congo that compensated for higher power costs.

Helios Towers reported $6.2 billion in contracted future revenue, with an average remaining contract life of 6.4 years. Dhillon said approximately 70% of revenue came from investment-grade customers.

Spending and shareholder returns

The company spent $196 million on capital expenditure in the first nine months, of which $173 million was discretionary. It tightened its full-year discretionary capital expenditure guidance to $230 million to $245 million to support customer demand. Non-discretionary capital expenditure guidance remained at $50 million.

Dhillon said $100 million of incremental growth capital expenditure announced earlier in the year was expected to generate a return on invested capital of more than 25%. Company-wide return on invested capital increased by 40 basis points to 14.2%.

Helios Towers repurchased $48 million of shares in the first nine months, bringing buybacks since the program began in November to $72 million. In September, it increased its buyback authorization by $100 million to $175 million and extended the program through the end of 2027. The company also paid its inaugural interim dividend.

Net leverage declined by 0.2 times year over year to 3.4 times EBITDA, and management expects it to fall further by year-end. Dhillon said the company had more than $500 million in available cash and undrawn debt facilities after raising a $250 million term loan in May.

Longer-term demand and acquisition priorities

Management pointed to rising mobile operator investment, population growth and data consumption as drivers of demand across its markets. Its analysis indicates approximately 72,000 additional addressable tenancies across its nine markets by 2040, roughly twice the size of its current tenancy portfolio.

Under its IMPACT 2030 strategy, Helios Towers targets more than $1.3 billion in cumulative recurring free cash flow from 2026 through 2030 and more than $400 million in cumulative shareholder distributions. It also plans to invest more than $500 million in organic growth opportunities through 2030.

Asked whether stronger demand could lead to changes in the longer-term plan, Dhillon said the company would gain a better sense of demand for the latter part of the five-year strategy as it moves through next year. Management plans to provide an updated view of 2027 and 2030 alongside its full-year results.

Dhillon said acquisitions remain a lower priority than organic investment and shareholder distributions. Building sites in existing markets is more attractive because the company can use its existing capital base, expertise and customer relationships, he said, although it continues to monitor acquisition opportunities.

Working capital outlook

Dhillon told analysts that Helios Towers had entered supplier financing arrangements that defer some capital expenditure payments into late next year. He also said the company expects a partial reversal of working capital movements in the final quarter, reflected in its full-year recurring free cash flow guidance.

About Helios Towers (LON:HTWS)

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 telecommunication tower sites in Tanzania, Democratic Republic of Congo, Congo Brazzaville, Ghana, South Africa, Senegal, Madagascar, Malawi and Oman. 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.

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