Helios Towers PLC (LSE:HTWS) (LSE:HTWS) shares dropped sharply after the company reported a quieter quarter of organic growth and lower profits for the first half of the year.
The FTSE 250-listed mobile telecoms infrastructure group highlighted that the period saw it invest heavily in acquisitions that will make it the most geographically diverse telecoms towers company across Africa and the Middle East.
Revenues of US$212.4mln for the first half of the year were up 4% on a year ago, but there was an 8% decline in operating profits to US$26.9mln.
Reported losses before tax improved, however, to US$43.6mln from US$83mln. Portfolio free cash flow decreased by 17% year-on-year to US$73.8mlm and net debt swelled 20% to US$786mln.
During the period Helios completed the €160mln purchase of 1,207 passive towers assets in Senegal, making it the second-largest tower owner in the West African country.
Deals were also struck to acquire 2,890 sites from Oman Telecommunications for US$575mln and with Airtel Africa to buy its operating companies in Madagascar and Malawi and potentially also Chad and Gabon, together adding up to another 2,227 sites.
Having finished the first half of 2021 with 8,603 sites, these acquisitions and others it has committed to build will increase the group’s site count to close to 15,000 towers across 11 markets.
Assuming all goes smoothly, this would be well ahead of the group's previous strategic plan to amass 12,000-plus towers in at least eight markets by 2025.
Shares slid 7% to 158.8p by midday on Thursday,
Analysts at Jefferies said: “Another quiet quarter for organic growth may raise some eyebrows. We sense however an intake of breath ahead of an incredibly busy H2 as [mobile network operators] release capex budgets following the gradual easing of lockdown restrictions.”
**Adds shares and broker comment**