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 margin1
|
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
leverage1,2
|
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 guidance1
· 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 flow2
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
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
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
US$m
|
2022
US$m
|
Loss before tax
|
(112.2)
|
(162.5)
|
Adjustments applied to give Adjusted EBITDA
Adjusting items:
Deal costs1
|
3.3
|
19.1
|
Share-based payments and long-term
incentive plan charges2
|
3.7
|
4.5
|
Other/Restructuring
|
0.9
|
-
|
(Loss)/Gain on disposal of
property, plant and equipment
|
(3.1)
|
0.4
|
Other gains and losses
|
6.1
|
51.4
|
Depreciation of property, plant
and equipment
|
160.9
|
144.6
|
Amortisation of intangible
assets
|
26.1
|
12.6
|
Depreciation of right-of-use
assets
|
32.0
|
21.3
|
Interest receivable
|
(1.3)
|
(1.8)
|
Finance costs
|
253.5
|
193.2
|
Adjusted EBITDA
|
369.9
|
282.8
|
Revenue
|
721.0
|
560.7
|
Adjusted EBITDA margin
|
51%
|
50%
|
1 Deal
costs comprise costs related to potential acquisitions and the
exploration of investment opportunities, which cannot be
capitalised. These comprise employee costs, professional fees,
travel costs and set-up costs incurred prior to operating
activities commencing.
2 Includes associated costs.
Adjusted gross profit and Adjusted gross
margin
Definition
Adjusted gross profit means gross profit, adding
back site and warehouse depreciation, divided by revenue.
Adjusted gross margin means Adjusted gross profit
divided by revenue.
Purpose
This measure is used to evaluate the underlying
level of gross profitability of the operations of the business,
excluding depreciation, which is the major non-cash measure
otherwise reflected in cost of sales. The Group believes that
Adjusted gross profit facilitates comparisons of operating
performance from period to period and company to company by
eliminating potential differences caused by the age and booked
depreciation on assets. It is also a proxy for the gross cash
generation of its operations.
Reconciliation between IFRS and APM
|
2023
US$m
|
2022
US$m
|
Gross profit
|
270.6
|
194.8
|
Add back: Site and warehouse
depreciation
|
185.6
|
158.1
|
Adjusted gross profit
|
456.2
|
352.9
|
Revenue
|
721.0
|
560.7
|
Adjusted gross margin
|
63%
|
63%
|
Portfolio free cash flow
Definition
Portfolio free cash flow is defined as Adjusted
EBITDA less maintenance and corporate capital additions, payments
of lease liabilities (including interest and principal repayments
of lease liabilities) and tax paid.
Purpose
Portfolio free cash flow is used to value the cash
flow generated by the business operations after expenditure
incurred on maintaining capital assets, including lease
liabilities, and taxes. It is a measure of the cash generation of
the tower estate.
Reconciliation between IFRS and APM
|
2023
US$m
|
2022
US$m
|
Cash generated from
operations
|
318.5
|
193.2
|
Adjustments applied:
Movement in working
capital
|
48.1
|
70.5
|
Adjusting items: Deal
costs1
|
3.3
|
19.1
|
Adjusted EBITDA
|
369.9
|
282.8
|
Less: Maintenance and corporate
capital additions
|
(35.5)
|
(20.3)
|
Less: Payments of lease
liabilities2
|
(45.3)
|
(40.8)
|
Less: Tax paid
|
(20.9)
|
(20.3)
|
Portfolio free cash
flow
|
268.2
|
201.4
|
1 Deal
costs comprise costs related to potential acquisitions and the
exploration of investment opportunities, which cannot be
capitalised. These comprise employee costs, professional fees,
travel costs and set-up costs incurred prior to operating
activities commencing.
2 Payment of lease liabilities comprises interest and principal
repayments of lease liabilities.
Gross debt, net debt and net leverage
Definition
Gross debt is calculated as non-current loans and
current loans and long-term and short-term lease liabilities.
Net debt is calculated as gross debt less cash and
cash equivalents. Net leverage is calculated as net debt divided by
annualised Adjusted EBITDA1.
Purpose
Gross debt is a prominent metric used by investors
and rating agencies.
Net debt is a measure of the Group's net
indebtedness that provides an indicator of overall balance sheet
strength. It is also a single measure that can be used to assess
the Group's cash position relative to its indebtedness. The use of
the term 'net debt' does not necessarily mean that the cash
included in the net debt calculation is available to settle the
liabilities included in this measure.
Net leverage is used to show how many years it would
take for a company to pay back its debt if net debt and Adjusted
EBITDA are held constant.
Reconciliation between IFRS and APM
|
2023
US$m
|
2022
US$m
|
External debt
|
1,650.3
|
1,571.6
|
Lease liabilities
|
239.4
|
226.0
|
Gross debt
|
1,889.7
|
1,797.6
|
Cash and cash
equivalents
|
106.6
|
119.6
|
Net debt
|
1,783.1
|
1,678.0
|
Annualised Adjusted
EBITDA1
|
403.0
|
328.8
|
Net leverage
|
4.4x
|
5.1x
|
1 Annualised Adjusted EBITDA calculated as per the Senior Notes
definition as the most recent fiscal quarter multiplied by four,
adjusted to reflect the annualised contribution from
acquisitions that have closed in the most recent fiscal
quarter. This is not a forecast of future results.
Return on invested capital
Definition
Return on invested capital (ROIC) is defined as
annualised portfolio free cash flow divided by invested
capital.
Invested capital is defined as gross property, plant
and equipment and gross intangible assets, less accumulated
maintenance and corporate capital expenditure, adjusted for IFRS 3
and IAS 29 accounting adjustments and deferred consideration for
future sites.
Purpose
This measure is used to evaluate asset efficiency
and the effectiveness of the Group's capital allocation.
Reconciliation between IFRS and APM
|
2023
US$m
|
2022
US$m
(Restated)²
|
Property, plant and
equipment
|
918.3
|
907.9
|
Accumulated
depreciation
|
1,127.5
|
934.0
|
Accumulated maintenance and
corporate capital expenditure
|
(260.3)
|
(224.8)
|
Intangible assets
|
546.4
|
575.2
|
Accumulated
amortisation
|
75.6
|
50.4
|
Accounting adjustments and
deferred consideration for future sites
|
(180.1)
|
(70.7)
|
Total invested capital
|
2,227.4
|
2,172.0
|
Annualised portfolio free cash
flow1
|
268.2
|
223.8
|
Return on invested
capital
|
12.0%
|
10.3%
|
1 Annualised portfolio free cash flow is calculated as
portfolio free cash flow for the respective period, adjusted to
annualise the impact of acquisitions closed during the respective
period.
2 Restatement on finalisation of acquisition accounting; see
Note 31.
Detailed financial review
Consolidated Income Statement
For the year ended 31
December
|
Year ended 31
December
|
(US$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:
Owners of the Company
|
(100.1)
|
(171.5)
|
Non-controlling
interests
|
(11.7)
|
0.1
|
Loss for the year
|
(111.8)
|
(171.4)
|
Loss per share:
Basic loss per share
(cents)
|
(10)
|
(16)
|
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$m
|
|
|
|
Central
& Southern Africa4
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
Sites at year end
|
14,097
|
13,553
|
2,535
|
2,519
|
6,396
|
6,300
|
5,166
|
4,734
|
Tenancies at year end
|
26,925
|
24,492
|
3,375
|
3,017
|
12,608
|
12,093
|
10,942
|
9,382
|
Tenancy ratio at year end
|
1.91x
|
1.81x
|
1.33x
|
1.20x
|
1.97x
|
1.92x
|
2.12x
|
1.98x
|
Revenue for the year ($)
|
721.0
|
560.7
|
57.5
|
3.6
|
312.6
|
261.8
|
350.9
|
295.3
|
Adjusted gross marginΔ
|
63%
|
63%
|
77%
|
73%
|
69%
|
67%
|
56%
|
59%
|
Adjusted EBITDAΔ for the year1
($)
|
369.9
|
282.8
|
38.5
|
2.3
|
199.8
|
162.9
|
167.6
|
149.1
|
Adjusted EBITDA marginΔ 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
|
|
|
|
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:
Maintenance and corporate capital
additions
|
(35.5)
|
(20.3)
|
Payments of lease
liabilities1
|
(45.3)
|
(40.8)
|
Corporate taxes paid
|
(20.9)
|
(20.3)
|
Portfolio free cash
flow2
Cash conversion
%3
Net payment of
interest4
|
268.2
|
201.4
|
73%
|
71%
|
(127.9)
|
(97.7)
|
Net change in working
capital5
|
(47.1)
|
(86.5)
|
Levered portfolio free cash
flow6
|
93.2
|
17.2
|
Discretionary capital
additions7
|
(167.5)
|
(745.0)
|
Cash paid for exceptional and
one-off items, and proceeds on disposal
assets8
|
(6.8)
|
7.2
|
Free cash flow
|
(81.1)
|
(720.6)
|
Transactions with non-controlling
interests
|
-
|
(11.8)
|
Net cash flow from financing
activities9
|
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
- Financial
|
The Group's reputation and
profitability could be damaged if the Group fails to meet its
customers' operational specifications, quality standards or
delivery schedules.
A substantial portion of Group
revenues is generated from a limited number of large customers. The
loss of any of these customers would materially affect the Group's
finances and growth prospects.
Many of the Group's customer tower
contracts contain liquidated damage provisions, which may require
the Group to make unanticipated and potentially significant
payments to its customers.
|
- Continued skills development and training programmes for the
project and operational delivery team;
- Detailed and defined project scoping and lifecycle management
through project delivery and transfer to ongoing
operations;
- Contract and dispute management processes in
place;
- Continuous monitoring and management of customer
relationships; and
- Use of
long-term contracting with minimal termination rights.
|
~
|
2
|
Non-compliance with
laws and regulations, such as:
- Safety,
health and environmental laws
- Anti-bribery and corruption provisions
|
- Compliance
- Financial
- Reputational
|
Non-compliance with applicable
laws and regulations may lead to substantial fines and penalties,
reputational damage and adverse effects on future growth
prospects.
Sudden and frequent changes in
laws and regulations, their interpretation or application and
enforcement, both locally and internationally, may require the
Group to modify its existing business practices, incur increased
costs and subject it to potential additional
liabilities.
|
- Constant monitoring of potential changes to laws and
regulatory requirements;
- In-person and virtual training on safety, health and
environmental matters provided to employees and relevant
third-party contractors;
- Ongoing
refresh of compliance and related policies including specific
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
- Financial
|
A slowdown in the growth of, or a
reduction in demand for, wireless communication services could
adversely affect the demand for communication sites and tower space
and could have a material adverse effect on the Group's financial
condition and results of operations.
There are significant risks
related to political instability (including elections), security,
ethnic, religious and regional tensions in each market where the
Group has operations.
|
- Ongoing
market analysis and business intelligence gathering
activities;
- Market
share growth strategy in place;
- Close
monitoring of any potential risks that may affect operations;
and
- Business continuity and contingency plans in place and tested
to respond to any emergency situations.
|
~
|
4
|
Significant
exchange rate and interest rate movements
|
- Financial
|
Fluctuations in, or devaluations
of, local market currencies or sudden interest rate movements where
the Group operates could have a significant and negative financial
impact on the Group's business, financial condition and results.
Such impacts may also result from any adverse effects such
movements have on Group third-party customers and strategic
suppliers. If interest rates increase materially, the Group may
struggle to meet its debt repayments.
This may also negatively affect
availability of foreign currency in local markets and the ability
of the Group to upstream cash.
|
- USD -
and EURO-pegged contracts;
- 'Natural' hedge of local currencies (revenue vs
opex);
- Ongoing
review of exchange rate differences and interest rate
movements;
- Fixed
rate debt/swaps in place
- 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 permits for some of its
tower sites, particularly in the case of existing tower portfolios
acquired from a third party. Vagueness, uncertainty and changes in
interpretation of regulatory requirements are frequent and often
without warning. As a result, the Group may be subject to potential
reprimands, warnings, fines and penalties for non-compliance with
the relevant permitting and approval requirements.
|
- Inventory of required licences and permits maintained for
each operating company;
- Compliance registers maintained with any potential
non-conformities identified by the relevant government authority
with a timetable for rectification;
- 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 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 attract, recruit and retain equally high calibre professionals
could adversely affect the Group's operations, financial condition
and strategic growth prospects.
|
- Talent
identification and succession-planning exit for key
roles;
- Competitive benchmarked performance related remuneration
plans; and
- Staff
performance and development/support plans.
|
~
|
7
|
Technology
risk
|
- Strategic
|
Advances in technology that
enhance the efficiency of wireless networks and potential active
sharing of wireless spectrum may significantly reduce or negate the
need for tower-based infrastructure or services. This could reduce
the need for telecommunications operators to add more tower-based
antenna equipment at certain tower sites, leading to a potential
decline in tenants, service needs and decreasing revenue
streams.
Examples of such new technologies
may include spectrally efficient technologies that could
potentially relieve certain network capacity problems or
complementary voice over internet protocol access technologies that
could be used to offload a portion of subscriber traffic away from
the traditional tower-based networks.
|
- Strategic long-term planning;
- Business intelligence;
- Exploring alternatives, e.g. solar power
technologies
- Continuously improving product offering to enable adaptation
to new wireless technologies;
- Applying for new licences to provision active infrastructure
services in certain markets; and
- Technology committee in place with Board
involvement/oversight.
|
~
|
8
|
Failure to remain
competitive
|
- Financial
|
Competition in, or consolidation
of, the telecommunications tower industry may create pricing
pressures that materially and adversely affect the
Group.
|
- KPI
monitoring and benchmarking against competitors;
- 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
- Financial
- Operational
|
Multiple risks exist with entry
into new markets and new lines of business. Failure to successfully
manage and integrate operations, resources and technology could
have material adverse implications for the Group's overall growth
strategy and negatively impact its financial position and
organisation culture.
|
- Pre-acquisition due diligence conducted with the assistance
of external advisors with specific geographic and industry
expertise;
- Ongoing
monitoring activities post acquisition/agreement;
- 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
- Financial
- Operational
- Reputational
|
Our operations are based in
certain countries with complex, frequently changing and
bureaucratic and administratively burdensome tax regimes. This may
lead to significant disputes around interpretation and application
of tax rules and may expose us to significant additional taxation
liabilities.
|
- Frequent interaction and transparent communication with
relevant governmental authorities and representatives;
- Engagement of external legal and tax advisors to advise on
legislative/tax code changes and assessed liabilities or
audits;
- 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
- Reputational
- Operational
|
The ability of the Group to
continue operations is heavily reliant on third parties, the proper
functioning of its technology platforms and the capacity of its
available human resources.
Failure in any of these three
areas could severely affect its operational capabilities and
ability to deliver on its strategic objectives.
|
- Ongoing
enhancements to data security and protection measures with
third-party expert support;
- Additional investment in IT resource and infrastructure to
increase automation and workflow of business-as-usual
activities;
- 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
- Financial
|
In addition to the risk to the
health and safety of our employees and contractors, the ongoing
impact of Covid-19 or other such pandemic could materially and
adversely affect the financial and operational performance of 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 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 fulfilment of contractual
obligations.
|
- Health
and safety protocols established and implemented;
- Business continuity plans implemented with ongoing
monitoring;
- Financial modelling, scenario building and stress
testing;
- Continuous scanning of the external environment;
- Increased fuel purchases; and
- Review
of contractual terms and conditions.
|
~
|
13
|
Cyber security
risk
|
- Operational
- Financial
- Reputational
|
We are increasingly dependent on
the performance and effectiveness of our IT systems. Failure of our
key systems, exposure to the increasing threat of cyber attacks and
threats, loss or theft of sensitive information, whether
accidentally or intentionally, expose the Group to operational,
strategic, reputational and financial risks. These risks are
increasing due to greater interconnectivity, reliance on technology
solutions to drive business performance, use of third parties in
operational activities and continued adoption of remote working
practices.
Cyber attacks are becoming more
sophisticated and frequent and may compromise sensitive information
of the Group, its employees, customers or other third parties.
Failure to prevent unauthorised access or to update processes and
IT security measures may expose the Group to potential fraud,
inability to conduct its business, damage to customers as well as
regulatory investigations and associated fines and
penalties.
|
- Ongoing
implementation and enhancement of security and remote access
processes, policies and procedures;
- Regular
security testing regime established, validated by independent third
parties;
- Annual
staff training and awareness programme in place;
- Security controls based on industry best practice frameworks,
such as National Cyber
Security Centre (NCSC) (www.ncsc.gov.uk/),
National Institute of Standards
and Technology (NIST) (www.nist.gov/), and 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
- Financial
- Reputational
|
Climate change is a global
challenge and therefore critical to our business, our investors,
our customers and other stakeholders. Regulatory requirements and
expectations of compliance with best practice are also evolving
rapidly. A failure to anticipate and respond appropriately and
sufficiently to climate risks or opportunities could lead to an
increased footprint, disruption to our operations and reputational
damage.
Business risks we may face as a
result of climate change relate to physical 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
patterns) and transition risks (i.e. economic, technology or
regulatory changes related to the move towards a low-carbon
economy).
Governments in our operating
markets, in addition to increasing qualitative and quantitative
disclosure requirements, may take action to address climate change
such as the introduction of a carbon tax or mandate Net Zero
requirements which could impact our business through higher costs
or reduced flexibility of operations.
|
- Carbon
reduction intensity target to 2030 with an ambition to decarbonise
our emissions to net zero (90% reduction in scope 1, 2, 3
emissions);
- Monitoring changes to carbon legislation and regulations in
all our markets;
- Investing in solutions that reduce carbon footprint and
reliance on diesel such as installing hybrid and solar solutions
and connecting to grid power where possible;
- Additional capital expenditure in carbon reduction
innovation;
- Factoring emissions and climate risk into strategy and growth
plans. All operating companies' budgets and forecasts include
calculated emissions to evaluate trends vs.
our 2030 carbon target;
- 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:
Owners of the Company
|
(100.1)
|
(171.5)
|
Non-controlling
interests
|
(11.7)
|
0.1
|
Loss for the year
|
(111.8)
|
(171.4)
|
Loss per share:
Basic loss per share
(cents)
|
(10)
|
(16)
|
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
US$m
|
2022
US$m
|
Loss after tax for the year
|
|
(111.8)
|
(171.4)
|
Other comprehensive (loss)/gain:
Items that may be reclassified subsequently to profit and
loss:
Exchange differences on
translation of foreign operations
|
|
(1.8)
|
(5.5)
|
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
US$m
|
2022
US$m
(Restated)1
|
Non-current assets
Intangible assets
|
11
|
546.4
|
575.2
|
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
Inventories
|
14
|
12.7
|
14.6
|
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
Equity
Share capital
|
18
|
13.5
|
13.5
|
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
Trade and other
payables
|
19
|
301.7
|
239.4
|
Short-term lease
liabilities
|
21
|
35.5
|
34.1
|
Loans
|
20
|
37.7
|
19.9
|
|
|
374.9
|
293.4
|
Non-current
liabilities
Deferred tax liabilities
|
|
25.9
|
50.1
|
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
capital
US$m
|
Share
premium US$m
|
Other
reserves US$m
|
Treasury
shares
US$m
|
Share-
based
payments
reserves
US$m
|
Convertible
bond
reserves
US$m
|
Translation
reserve US$m
|
Retained
earnings
US$m
|
Attributable
to the owners
of the
Company US$m
|
Non-
controlling
interest (NCI) US$m
|
Total
equity
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:
Issue of share capital
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
13.1
|
13.1
|
-
|
13.1
|
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:
Share-based payments
|
25
|
-
|
-
|
-
|
-
|
1.6
|
-
|
-
|
-
|
1.6
|
-
|
1.6
|
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
US$m
|
2022
US$m
|
Cash flows from
operating activities
Loss for the year before tax
|
|
(112.2)
|
(162.5)
|
Adjustments
for:
Other gains and (losses)
|
24
|
6.1
|
51.4
|
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
Africa
|
Central
& Southern Africa
|
Corporate
|
Group
|
For the year to 31 December
2023
|
Oman
US$m
|
Tanzania
US$m
|
Other
US$m
|
DRC
US$m
|
Other
US$m
|
US$m
|
US$m
|
Revenue
|
57.5
|
232.5
|
80.1
|
256.9
|
94.0
|
-
|
721.0
|
Adjusted gross margin1
|
77%
|
73%
|
57%
|
54%
|
62%
|
-
|
63%
|
Adjusted EBITDA2
|
38.5
|
162.3
|
37.5
|
123.0
|
44.6
|
(36.0)
|
369.9
|
Adjusted EBITDA margin3
|
67%
|
70%
|
47%
|
48%
|
47%
|
-
|
51%
|
Financing
costs
Interest costs
|
(36.0)
|
(37.8)
|
(28.3)
|
(54.7)
|
(24.1)
|
5.7
|
(175.2)
|
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
Non-current assets
|
509.4
|
281.9
|
300.3
|
383.4
|
251.6
|
12.0
|
1,738.6
|
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
|
|
MENA4
|
East
& West
Africa5
|
Central
& Southern
Africa6
|
Corporate
|
Group
|
For the year to 31 December 2022
(Represented)
|
Oman
US$m
|
Tanzania
US$m
|
Other
US$m
|
DRC
US$m
|
Other
US$m
|
US$m
|
US$m
|
Revenue
|
3.6
|
201.4
|
60.4
|
205.9
|
89.4
|
-
|
560.7
|
Adjusted gross margin1
|
73%
|
70%
|
59%
|
57%
|
64%
|
-
|
63%
|
Adjusted EBITDA2
|
2.3
|
133.7
|
29.2
|
104.4
|
44.7
|
(31.5)
|
282.8
|
Adjusted EBITDA margin3
|
64%
|
66%
|
48%
|
51%
|
50%
|
-
|
50%
|
Financing
costs
Interest costs
|
(5.2)
|
(40.1)
|
(21.2)
|
(52.3)
|
(25.5)
|
3.3
|
(141.0)
|
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
information7
Non-current assets
|
519.3
|
318.0
|
327.8
|
343.6
|
218.2
|
4.2
|
1,731.1
|
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
Revenue
|
|
% of
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
US$m
|
2022
US$m
|
Adjusted EBITDA
|
369.9
|
282.8
|
Adjustments applied to give Adjusted EBITDA
Adjusting items:
Deal costs1
|
(3.3)
|
(19.1)
|
Share-based payments and long-term
incentive plan charges2
|
(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
US$m
|
2022
US$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
US$m
|
2022
US$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
US$m
|
2022
US$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
US$m
|
2022
US$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
US$m
|
2022
US$m
|
Bank interest
receivable
|
1.3
|
1.8
|
9. Finance costs
|
2023
US$m
|
2022
US$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
US$m
|
2022
US$m
|
(a) Tax expense:
Current tax
In respect of current
year
|
24.7
|
19.1
|
Adjustment in respect of prior
years
|
(0.6)
|
(1.2)
|
Total current tax
|
24.1
|
17.9
|
Deferred tax
Originating temporary differences
on acquisition of subsidiary undertakings
|
0.6
|
(1.8)
|
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:
Loss before tax
|
(112.2)
|
(162.5)
|
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
US$m
|
2022
US$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
depreciation
US$
|
Short
term
timing
differences US$m
|
Tax
losses
US$m
|
Intangible assets
US$m
|
Total
US$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
US$m
|
2022
US$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
contracts
US$m
|
Customer
relationships
US$m
|
Colocation
rights
US$m
|
Non-compete
agreement
US$m
|
Computer
software and licence
US$m
|
Total
US$m
|
Cost
At 1 January 2022
|
21.9
|
3.0
|
199.8
|
8.8
|
1.1
|
21.3
|
255.9
|
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
At 1 January 2022
|
-
|
(0.6)
|
(2.5)
|
(1.6)
|
(0.5)
|
(19.3)
|
(24.5)
|
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
At 31 December
2023
|
40.7
|
1.9
|
489.6
|
5.2
|
0.1
|
8.9
|
546.4
|
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
US$m
|
2022
US$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
US$m
|
Fixtures
and fittings
US$m
|
Motor
vehicles
US$m
|
Site
assets
US$m
|
Land
US$m
|
Leasehold
improvements
US$m
|
Total
US$m
|
Cost
At 1 January 2022
|
27.5
|
1.6
|
4.7
|
1,497.6
|
6.6
|
3.5
|
1,541.5
|
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
At 1 January 2022
|
(20.1)
|
(1.4)
|
(3.5)
|
(805.0)
|
(0.1)
|
(3.2)
|
(833.3)
|
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
At 31 December
2023
|
0.1
|
0.1
|
1.2
|
910.6
|
6.0
|
0.3
|
918.3
|
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$129.6 million) of expenditure recognised
in the carrying amount of items of site assets that were in the
course of construction. On completion of the construction, they
will remain within the site assets balance, and depreciation will
commence when the assets are available for use.
13. Right-of-use assets
|
Land
US$m
|
Buildings
US$m
|
Motor
vehicles
US$m
|
Total
US$m
|
Cost
At 1 January 2023
(Restated)1
|
288.9
|
14.0
|
0.4
|
303.3
|
Additions
|
44.3
|
13.3
|
1.1
|
58.7
|
Disposals
|
(19.6)
|
(2.2)
|
(0.2)
|
(22.0)
|
Hyperinflation impacts
|
25.6
|
2.4
|
-
|
28.0
|
Effects of foreign exchange
differences
|
(12.2)
|
(0.6)
|
-
|
(12.8)
|
At 31 December 2023
|
327.0
|
26.9
|
1.3
|
355.2
|
Depreciation
At 1 January 2023
|
(68.8)
|
(7.8)
|
(0.2)
|
(76.8)
|
Charge for the year
|
(27.2)
|
(4.1)
|
(0.7)
|
(32.0)
|
Disposals
|
14.1
|
2.1
|
0.3
|
16.5
|
Hyperinflation impacts
|
(11.4)
|
(1.4)
|
-
|
(12.8)
|
Effects of foreign exchange
differences
|
3.7
|
0.2
|
-
|
3.9
|
At 31 December 2023
|
(89.6)
|
(11.0)
|
(0.6)
|
(101.2)
|
Net book value
At 31 December 2023
|
237.4
|
15.9
|
0.7
|
254.0
|
At 31 December 2022
(Restated)1
|
220.1
|
6.2
|
0.2
|
226.5
|
1
Restatement on finalisation of acquisition accounting; see Note
31.
14. Inventories
|
|
|
2023
US$m
|
2022
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$89.0
million).
15. Trade and other receivables
|
2023
US$m
|
2022
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$36.3 million of contract
assets at 31 December 2022 were recovered from
customers.
Of the trade receivables balance
at 31 December 2023, 90% is due from large multinational MNOs. The
Group does not hold any collateral or other credit enhancements
over these balances nor does it have a legal right of offset
against any amounts owed by the Group to the
counterparty.
Debtor days
The Group calculates debtor days
as set out in the table below. It considers its most relevant
customer receivables exposure on a given reporting date to be the
amount of receivables due in relation to the revenue that has been
reported up to that date. It therefore defines its net receivables
as the total trade receivables and accrued revenue, less loss
allowance and deferred income that has not yet been
settled.
|
2023
US$m
|
2022
US$m
|
Trade receivables
|
145.2
|
80.5
|
Accrued
revenue1
|
10.1
|
22.9
|
Less: Loss allowance
|
(5.4)
|
(5.8)
|
Less: Deferred
income2
|
(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$16.6 million) of services had been provided to
customers which had yet to meet the Group's probability criterion
for revenue recognition under the Group's accounting policies.
Revenue for these services will be recognised in the future as and
when all recognition criteria are met.
16. Prepayments
|
2023
US$m
|
2022
US$m
|
Prepayments
|
42.6
|
45.7
|
Prepayments primarily comprise
advance payments to suppliers.
17. Cash and cash equivalents
|
2023
US$m
|
2022
US$m
|
Bank balances
|
106.6
|
119.6
|
Cash and cash equivalents comprise
cash at bank and in hand. Short-term deposits are defined as
deposits with an initial maturity of three months or
less.
18. Share capital and share premium
|
2023
|
2022
|
|
Number of
shares
(million)
|
US$m
|
Number
of
shares
(million)
|
US$m
|
Authorised, issued and fully paid
ordinary shares of £0.01 each
|
1,051
|
13.5
|
1,051
|
13.5
|
|
1,051
|
13.5
|
1,051
|
13.5
|
The share capital of the Group is
represented by the share capital of the Company, Helios Towers
plc.
The treasury shares represent the
cost of shares in Helios Towers plc purchased in the market and
held by the Helios Towers plc EBT to satisfy options under the
Group Share options plan. Treasury shares held by the Group as at
31 December 2023 are 1,560,641 (31 December 2022:
2,827,852).
19. Trade and other payables
|
2023
US$m
|
2022
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$45.8 million) from contract liabilities
held on the balance sheet at the start of the financial year.
Contract liabilities are presented as deferred income in the table
above.
Deferred consideration relates to
consideration that is payable in the future for the purchase of
certain tower assets which the Group is committed to when certain
conditions are met, to enable the transfer of ownership to Helios
Towers.
Accruals consist of general
operational accruals, accrued capital items, and goods received but
not yet invoiced.
Trade and other payables are
classified as financial liabilities and measured at amortised cost.
These are initially recognised at fair value and subsequently at
amortised cost. These are expected to be settled within a
year.
The Directors consider the
carrying amount of trade payables approximates to their fair value
due to their short-term nature.
20. Loans
|
2023
US$m
|
2022
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$225 million aggregate principal amount of its
7.000% Senior Notes due 2025.
The current portion of borrowings
relates to accrued interest on the bonds, term loan interest and
principal payable within one year of the balance sheet
date.
Loans are classified as financial
liabilities and measured at amortised cost. Refer to Note 26 for
further information on the Group's financial
instruments.
21. Lease liabilities
|
2023
US$m
|
2022
US$m
|
Short-term lease liabilities
Land
|
30.2
|
31.8
|
Buildings
|
4.7
|
2.2
|
Motor vehicles
|
0.6
|
0.1
|
|
35.5
|
34.1
|
|
2023
US$m
|
2022
US$m
|
Long-term lease liabilities
Land
|
193.1
|
188.4
|
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$40.8 million).
The profile of the outstanding
undiscounted contractual payments fall due as follows:
|
Within
1 year
US$m
|
2-5
years
US$m
|
6-10
years
US$m
|
10+
years
US$m
|
Total
US$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
US$m
|
2022
US$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
US$m
|
2022
US$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
Number of
options
|
2022
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
TSR
|
Adjusted EBITDA
|
ROIC
|
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
|
2023 LTIP Award
|
Relative
TSR
|
Adjusted
EBITDA
|
ROIC
|
Impact
Scorecard
|
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
of
RSUs
|
2022
Number of 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
|
26. Financial instruments
Financial instrument assets held
by the Group at fair value had the following effect on profit and
loss:
|
31
December
2023
US$m
|
31
December
2022
US$m
|
Balance brought forward
|
2.8
|
57.7
|
Derivative financial instrument -
7.000% Senior Notes 2025
|
3.5
|
(55.2)
|
Currency forward
contracts
|
-
|
0.3
|
Balance carried forward
|
6.3
|
2.8
|
Fair value measurements
Some of the Group's financial
derivatives are measured at fair value at the end of each reporting
period. The information set out below provides data about how the
fair values of these financial assets and financial liabilities are
determined (in particular, the valuation technique(s) and inputs
used).
For those financial instruments
measured at fair value, the Group has categorised them into a
three-level fair value hierarchy based on the priority of the
inputs to the valuation technique in accordance with IFRS 13. The
hierarchy gives the highest priority to quoted prices in active
markets for identical assets or liabilities (Level 1) and the
lowest priority to unobservable inputs (Level 3). If the inputs
used to measure fair value fall within different levels of the
hierarchy, the category level is based on the lowest priority level
input that is significant to the fair value measurement of the
instrument in its entirety. There are no financial instruments
which have been categorised as Level 1. There were no transfers
between the levels in the year.
Capital risk management
The Group manages its capital to
ensure that entities in the Group will be able to continue as a
going concern while maximising the return to stakeholders through
the optimisation of the debt and equity balance. The capital
structure of the Group consists of debt, which includes borrowings
disclosed in Notes 20 and 21, cash and cash equivalents and equity
attributable to equity holders of the Company, comprising issued
capital, reserves and retained earnings as disclosed in the
Statement of Changes in Equity.
Gearing ratio
The Group keeps its capital
structure under review. The gearing ratio at the year end is as
follows:
|
2023
US$m
|
2022
US$m
|
Debt (net of issue
costs)
|
1,889.7
|
1,797.6
|
Cash and cash
equivalents
|
(106.6)
|
(119.6)
|
Net debt
|
1,783.1
|
1,678.0
|
Equity attributable to the
owners
|
(68.3)
|
8.3
|
Non-controlling
interests
|
29.8
|
41.0
|
|
(46.3x)
|
34.1x
|
Debt is defined as long-term and
short-term loans and lease liabilities, as detailed in Notes 20 and
21 respectively.
Externally imposed capital
requirements
The Group is not subject to
externally imposed capital requirements.
Categories of financial
instruments
|
2023
US$m
|
2022
US$m
|
Financial assets
Financial assets at amortised
cost:
Cash and cash
equivalents
|
106.6
|
119.6
|
Trade and other
receivables
|
321.6
|
204.9
|
|
428.2
|
324.5
|
Fair value through profit or
loss:
Derivative financial
assets
|
6.3
|
2.8
|
|
434.5
|
327.3
|
Financial liabilities Amortised
cost:
Trade and other
payables
|
213.4
|
216.5
|
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$19.5 million.
Foreign currency risk
management
The Group undertakes transactions
denominated in foreign currencies; consequently exposures to
exchange rate fluctuations arise. The Group's main currency
exposures were to the New Ghanaian Cedi (GHS), Malagasy Ariary
(MGA), Tanzanian Shilling (TZS), Central African Franc (XAF), South
African Rand (ZAR) and Malawian Kwacha (MWK) through its main
operating subsidiaries. The Group has exposure to Sterling (GBP)
and Euro (EUR) fluctuations on its financial assets and
liabilities, however, this is not considered material. The Group
manages foreign currency risks utilising forward contracts where
considered appropriate.
The carrying amounts of the
Group's foreign currency denominated monetary assets and monetary
liabilities at the reporting date are as follows:
|
Assets
|
Liabilities
|
|
2023
US$m
|
2022
US$m
|
2023
US$m
|
2022
US$m
|
New Ghanaian Cedi
|
18.0
|
15.7
|
19.1
|
20.8
|
Malagasy Ariary
|
11.7
|
10.9
|
13.5
|
11.8
|
Tanzanian Shilling
|
61.9
|
71.4
|
85.1
|
100.2
|
South African Rand
|
6.1
|
5.6
|
16.0
|
17.5
|
Central African Franc
|
35.7
|
35.7
|
156.1
|
137.0
|
Malawian Kwacha
|
15.2
|
15.4
|
14.8
|
19.8
|
Omani Rial
|
35.5
|
10.1
|
85.7
|
35.2
|
|
184.1
|
164.8
|
390.3
|
342.3
|
Foreign currency sensitivity
analysis
The following table details the
Group's sensitivity to foreign exchange risk. The percentage
movement applied to the currency is based on the average movements
in the previous three annual reporting periods of the US Dollar
against the GHS, XAF, TZS, MGA, ZAR and MWK (2022: sensitivity
based on a 10% movement), The sensitivity analysis includes only
outstanding foreign currency denominated monetary items and adjusts
their translation at the year-end for a change in foreign currency
rates. A positive number below indicates an increase in profit and
other equity where US Dollar weakens against the GHS, XAF, TZS,
ZAR, MWK or OMR. For a strengthening of US Dollar against the GHS,
XAF, TZS, ZAR, MWK or OMR, there would be an equal and opposite
effect on the profit and other equity, on the basis that all other
variables remain constant.
|
Impact
on profit or loss
|
|
2023
US$m
|
2022
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$120 million for
funding general corporate and working capital needs. As at 31
December 2023 the facility was undrawn. This facility is available
until December 2024. The Group has remained compliant during the
year to 31 December 2023 with all the covenants contained in the
Senior Credit facility. Please refer to Note 20 for further
information in relation to debt facilities.
Ultimate responsibility for
liquidity risk management rests with the Board. The Group manages
liquidity risk by maintaining adequate reserves of liquid funds and
banking facilities and continuously monitoring forecast and actual
cash flows including consideration of appropriate
sensitivities.
Non-derivative financial
liabilities
The following tables detail the
Group's remaining contractual maturity for its non-derivative
financial liabilities. The tables have been drawn up based on the
undiscounted cash flows of financial liabilities based on the
earliest date on which the Group can be required to pay. The table
below includes principal cash flows.
|
Within
1
year
US$m
|
1-2
years
US$m
|
2-5
years
US$m
|
5+
years
US$m
|
Total
US$m
|
31 December 2023
Non-interest bearing
|
213.4
|
-
|
-
|
-
|
213.4
|
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
Non-interest bearing
|
216.5
|
-
|
-
|
-
|
216.5
|
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 year
US$m
|
1-2 years
US$m
|
2-5 years
US$m
|
5+ years
US$m
|
Total
US$m
|
31 December 2023
Non-interest bearing
|
282.0
|
-
|
-
|
-
|
282.0
|
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$0
million). The increase in the fair value of the call option is
attributable the tightening of the Group's credit spread, which is
in line with the market movement.
The key assumptions in determining
the fair value are: the quoted price of the bond as at 31 December
2023; the credit spread; and the yield curve. The probabilities
relating to change of control and major asset sale represent a
reasonable expectation of those events occurring that would be held
by a market participant.
|
|
Within 1
year US$m
|
1-2
years US$m
|
2-5
years US$m
|
5+
years
US$m
|
Total
US$m
|
31 December 2023
Net settled:
Embedded derivatives
|
|
-
|
6.3
|
-
|
-
|
6.3
|
|
|
-
|
6.3
|
-
|
-
|
6.3
|
31 December 2022
Net settled:
Embedded derivatives
|
|
-
|
-
|
2.5
|
-
|
2.5
|
|
|
-
|
-
|
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 $USm
|
Within 1
year US$m
|
1-2
years US$m
|
2-5
years US$m
|
> 5
years
US$m
|
Total
US$m
|
31 December 2023
Financial derivatives
|
-
|
1.4
|
(5.5)
|
(12.7)
|
(2.1)
|
(18.9)
|
|
-
|
1.4
|
(5.5)
|
(12.7)
|
(2.1)
|
(18.9)
|
Interest Rate
Swaps
|
Nominal
amounts
US$m
|
Carrying
value
US$m
|
Opening
balance
1 Jan
2023
US$m
|
(Gain)/Loss deferred to
OCI
US$m
|
Closing
balance
31 Dec
2023
US$m
|
Weighted
average
maturity
year
|
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 $10.1
million.
For all cases above, responses
have been submitted to the relevant tax authority in relation to
the assessments and remain under review with local tax experts. The
Directors believe that the quantum of potential future cash
outflows in relation to these tax audits is not probable cannot be
reasonably assessed and therefore no provision has been made for
these amounts; the balances above represent the Group's assessment
of the maximum possible exposure for the years assessed. The
Directors are working with their advisers and are in discussion
with the tax authorities to bring the matters to conclusion based
on the facts.
Other individually immaterial tax,
and regulatory proceedings, claims and unresolved disputes are
pending against Helios Towers in a number of jurisdictions. The
timing of resolution and potential outcome (including any future
financial obligations) of these are uncertain, but not considered
probable and therefore no provision has been recognised in relation
to these matters.
Legal claims
Other individually immaterial
legal and regulatory proceedings, claims and unresolved disputes
are pending against Helios Towers in a number of jurisdictions. The
timing of resolution and potential outcome (including any future
financial obligations) of these are uncertain, but no cash outflows
are considered probable and therefore no provisions have been
recognised in relation to these matters.
28. Net debt
|
|
|
2023
US$m
|
2022
US$m
|
External debt
|
|
|
(1,650.3)
|
(1,571.6)
|
Lease liabilities
|
|
|
(239.4)
|
(226.0)
|
Cash and cash
equivalents
|
|
|
106.6
|
119.6
|
Net debt
|
|
|
(1,783.1)
|
(1,678.0)
|
2023
|
At
1 January
2023
US$m
|
Cash flows
US$m
|
Other1
US$m
|
At
31 December
2023
US$m
|
Cash and cash
equivalents
|
119.6
|
(5.4)
|
(7.6)
|
106.6
|
External debt
|
(1,571.6)
|
(75.7)
|
(3.0)
|
(1,650.3)
|
Lease liabilities
|
(226.0)
|
54.1
|
(67.5)
|
(239.4)
|
Total financing
liabilities
|
(1,797.6)
|
(21.6)
|
(70.5)
|
(1,889.7)
|
Net debt
|
(1,678.0)
|
(27.0)
|
(78.1)
|
(1,783.1)
|
2022
|
At
1
January
2022
US$m
|
Cash
flows
US$m
|
Other1
US$m
|
At
31
December
2022
US$m
|
Cash and cash
equivalents
|
528.9
|
(405.0)
|
(4.3)
|
119.6
|
External debt
|
(1,295.5)
|
(261.2)
|
(14.9)
|
(1,571.6)
|
Lease liabilities
|
(181.9)
|
40.8
|
(84.9)
|
(226.0)
|
Total financing
liabilities
|
(1,477.4)
|
(220.4)
|
(99.8)
|
(1,797.6)
|
Net debt
|
(948.5)
|
(625.4)
|
(104.1)
|
(1,678.0)
|
1
Other includes foreign
exchange and non-cash interest movements.
Refer to Note 20 for further details on the
year-on-year movements in loans.
29. Loss per share
Basic loss per share has been
calculated by dividing the total loss for the year by the weighted
average number of shares in issue during the year after adjusting
for shares held in the EBT.
To calculate diluted loss per
share, the weighted average number of ordinary shares in issue is
adjusted to assume conversion of all dilutive potential shares.
Share options granted to employees where the exercise price is less
than the average market price of the Company's ordinary shares
during the year are considered to be dilutive potential shares.
Where share options are exercisable based on performance criteria
and those performance criteria have been met during the year, these
options are included in the calculation of dilutive potential
shares.
The Directors believe that
Adjusted EBITDA per share is a useful additional measure to better
understand the performance of the business (refer to Note
4).
Loss per share is based
on:
|
2023
US$m
|
2022
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
Number
|
2022 Number
|
Weighted average number of
ordinary shares used to calculate basic earnings per
share
|
1,048,501,270
|
1,047,039,919
|
Weighted average number of
dilutive potential shares
|
119,278,686
|
114,017,600
|
Weighted average number of
ordinary shares used to calculate diluted earnings per
share
|
1,167,779,956
|
1,161,057,519
|
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$282.8
million). Refer to Note 4 for a reconciliation of Adjusted EBITDA
to net loss before tax.
30. Non-controlling Interest
Summarised financial information
in respect of each of the Group's subsidiaries that have material
non-controlling interests is set out below.
The summarised financial
information below represents amounts before intragroup
eliminations.
|
Oman
|
|
2023
US$m
|
2022
US$m
(Restated)1
|
Current assets
|
39.7
|
11.3
|
Non-current assets
|
509.4
|
519.6
|
Current liabilities
|
(254.6)
|
(114.8)
|
Non-current liabilities
|
(247.2)
|
(256.3)
|
Equity attributable to owners of
the Company
|
33.1
|
111.9
|
Non-controlling
interests
|
14.2
|
47.9
|
|
|
|
|
2023
US$m
|
2022
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$89.1 million. Non-controlling
interest is recognised under the fair value method as permitted
under IFRS 3.
The breakdown of the acquisition
price and goodwill generated by the acquisition is as
follows:
|
Previously reported
US$m
|
Adjustment
US$m
|
Final allocation
US$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
US$m
|
Adjustment
US$m
|
Final
allocation
US$m
|
Assets
Fair value of property, plant and equipment
|
147.6
|
(23.3)
|
124.3
|
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
Other liabilities
|
(7.9)
|
4.6
|
(3.3)
|
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.