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Vantage Towers springs no surprises in FY21

Vantage Towers, Vodafone's European tower company spinout with operations in ten countries, posted a pretty solid set of financial results – and broadly in line with analysts' expectations – for its fiscal year ended March 31.

Although there were no leaps and bounds in key financial metrics on a pro forma basis compared with FY20, CEO Vivek Badrinath painted an upbeat picture.

"We have fully delivered on our FY21 operation and financial targets and we remain focused on commercializing our business and delivering our medium-term targets," he said.

A typically enthusiastic Badrinath added that acceleration of digital transformation in Europe "underscores our confidence in the future." He described Vantage Towers as a "5G super host" and "key enabler" for 5G rollout.

Confirmation of a €280 million (US$340 million) dividend was another plus for shareholders, although this expectation was no doubt already baked into the share price before Vantage Towers announced its FY21 results.

In early-morning trading on the Frankfurt Stock Exchange the share-price dipped by nearly 3% to a shade over €26. This was still above the IPO price of €24, however, when the company listed in March.

Show me the numbers

FY21 pro forma revenue grew 2.2%, to €966 million ($1.17 billion). Vantage Towers previously (and correctly) forecast full-year turnover to fall in the €955 million to €970 million range. Median forecasts by analysts according to Refinitiv, as cited by Reuters, were nonetheless expecting slightly higher full-year revenue (€971 million/$1.18 billion).

EBITDA after leases (EBITDAal) was €524 million ($636 million), up 2.1% over the same period, while recurring free cash flow (RFCF) rose 2.4%, to €384 million ($466 million). Again, Vantage Towers got its predictions right here. The tower company previously forecast EBITDAaL of €520 million to €530 million ($632 million to $644 million) and recurring free cash flow of €375 million to €385 million ($455 million to $468 million).


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Vantage Towers said performance within guidance was driven by a "build-to-suit" program in Germany, an active sharing agreement with Orange in Spain, and the "contractually agreed inflation escalator" in its master service agreements.

More tenancies

Vantage Towers said it added around 1,800 new tenants during FY21, of which some 1,300 were non-Vodafone and approximately 660 were "non-committed." These latter types of tenancies are additional leases not committed at the company's Capital Markets Day last November.

The tower company said it has now secured a third of the non-committed tenancies needed to achieve its medium tenancy ratio target of more than 1.5x, which now stands at 1.4x. This ratio figure excludes tower Vantage Towers' assets held via JVs in Italy (INWIT) and the UK (Cornerstone).

Revenue guidance for FY22 is set between €995 million ($1.21 billion) and €1.01 billion ($1.23 billion).

— Ken Wieland, contributing editor, special to Light Reading

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