Helios Towers: Monetisation is key for Africa-focused telecoms infrastructure group

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Helios Towers PLC (LSE:HTWS) is expected to underline strong revenue growth in its results for the year ending December 31, 2022 on Thursday, March 16.

Following a strong third quarter and noting a “robust” commercial pipeline, the Africa-focused telecoms towers operator raised its tenancy guidance to between 1,400 and 1,700 units (previously between 1,200 and 1700).

However, increased power prices are expected to result in an Adjusted EBITDA margin guidance of 50-51%, down from 53.6% in 2021.

The target capital expenditure range is expected to be between US$830mln and US$850mln, with acquisition capex expected to be around US$650mln in 2022, taking into account acquisitions in Oman and Mala.

Analysts at Jefferies stated that Helios’ trading update should reveal “resilient” tenancy and revenue growth underlining a commitment to mobile network rollouts.

Jefferies’ projections point to year-on-year EBITDA growth of 27% driving a 24% uptick in free cash flow.

“Now that (Helios) has built its platform out to nine countries, monetisation is the core priority,” said analysts.

Although rising bond yields may prove a headwind on the group’s share price in the short term, analysts maintain a buy rating at a 170p price target.

An 87% upside scenario to 200p is given, alongside a -2% downside to 105p.

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