Hello everyone, welcome to the Helios Towers full year 2022 results. My name is Nadia, I'll be coordinating the call today. If you would like to ask a question at the end of the presentation, please press star followed by one on your telephone keypad. I will now hand over to your host, Tom Greenwood, CEO, to begin. Tom, please go ahead.
Thank you very much, Nadia. Hello everyone, and welcome to the Helios Towers FY 2022 performance and FY 2023 outlook call. It's great to have everyone on the call today. I hope you and your families are well, thank you very much for your time today. First up, on page two, we've got the usual lineup for you of myself, Tom Greenwood, the CEO, Manjit Dhillon, our CFO, and Chris Baker-Sams, our Head of Strategic Finance and Investor Relations. Moving now on to page five for our highlights. We were very pleased with our performance in 2022 for two main reasons. Firstly, our business demonstrated its resilience and strength with strong revenue growth and EBITDA growth of 25% and 18% respectively, supported by significant tenancy growth.
Secondly, we completed the last two acquisitions in Malawi and Oman, meaning our recent inorganic growth plan over the past two years is complete moving into 2023. Over the last two years, we've roughly doubled the platform, going from five to nine markets and 7,000- 14,000 sites. Our platform is now well invested and primed for growth, which is why our big focus for 2023 is organic rollout, lower CapEx, and driving returns. Our EBITDA guidance for this year is $350 million-$365 million, representing at the midpoint 26% year-on-year growth, including 13% organic. By the way, the inorganic part of this is just a full year of the Oman and Malawi deals, which we closed last year.
In fact, over half of our 2023 growth is already in the bag. Of course, this will be supported by 1,600-2,100 new organic tenancies and $170 million-$210 million CapEx, which comes down from the largely M&A driven $765 million in 2022. Finally, as we continue to move forward, we've got a really strong earnings base of $4.7 billion contracted revenue, which of course all contains CPI and power price escalators. Now to page six for a quick wrap-up of our recent expansion and diversification plan. You may remember, a couple of years ago, we embarked on a strategy to expand and geographically diversify, to strengthen the business and take our operational customer service excellence to more markets.
I'm pleased to say that with Oman closing in December, this phase of our expansion is complete. We move forward into 2023 with an enlarged leased up ready portfolio on which we're already seeing growth. As you can see from the right-hand side, where EBITDA growth has been on average 24% in the one to two years since the first three deals were closed. Overall, very pleased with progress in our new markets since entering, and we're targeting strong growth in all of these, including Oman, for this year. Turning to page seven, where we're providing some medium-term guidance on how to think about growth of the newly enlarged portfolio. As you can see from the left-hand side, during our previous organic harvesting period, 2016 to 2020, we delivered strong margin and tenancy ratio growth.
In 2021 to 2022 with our acquisition, this obviously brings some margin and tenancy ratio dilution in the short term because we're buying underutilized assets which are ready for co-location and operational efficiency to drive EBITDA margin and returns up in the quarters and years ahead. We're already seeing strong tenancy rollout in Q1 this year, which Manjit will provide some updates on later. As you can see from the right-hand side, with our leading positions in structurally growing markets, we expect continued levels of tenancy growth of around 7%-9% each year in the medium term, which is what we've delivered in the past few years. This year, that's translated into roughly 13% organic growth of EBITDA, and we expect 10%-12% growth on this each year following through to 2026.
To back some of that up, here on page eight, we show some of the structural drivers which mean our market and our business are growing at elevated levels to other parts of the world. We have roughly 50% mobile penetration across our markets, which compares to around 90% in mature markets. This means subscribers are growing at 4% per year, which actually equates to 68 million subscribers coming online in our market in the next five years, and this compares with 1% per year in mature markets. Of course, population growth of 2% on average across our markets further contributes to the increased demand for telecoms infrastructure and therefore our revenue growth, which compares to roughly flat population across the G7 markets during this time.
All of this in our markets is driving a forecasted 8 percentage points of service growth per year through to 2026, which is, of course, supporting our tenancy and EBITDA growth during this time. As you can see on page nine, we have delivered around 8% tenancy growth organically year-on-year since our IPO in 2019, which has all been within guidance each year. We're providing similar guidance of around 8% for 2023, which equates to around 1,600-2,100 tenancy additions we expect this year. Furthermore, with the chart on the right-hand side, I would keen to explain the tenancy ratio change year-on-year and how the new sites dilute that initially.
We grew our sites in hand at the start of the year by 0.08x, significantly grew the site count through new Build-to-Suit and acquisitions during the year, leading to ending the year at 1.81x. This, of course, provides us with a new enlarged asset base, which we're busy leasing up now to drive organic EBITDA and returns growth through this year and beyond. On that note, looking now at page 10, we really do have a good track record of leasing up both acquired and new built sites. We've got 0.2x or 0.3x tenancy ratios increase each year on Build-to-Suit and 0.1x on acquired sites. This, of course, is no coincidence. It's based on our assessment of commercial potential wherever we deploy capital by buying or building a site.
Lease up potential is our number one criteria we look at when assessing any site location. Putting additional tenants on a site translates into the financial returns that you see on the right-hand side. On the subject of infrastructure sharing and telecom coverage growth, the next page 11 shows some key highlights from our sustainable business strategy. We were really pleased in 2022 to receive a AAA rating from MSCI, which actually is their highest rating. This really demonstrates our credentials in this space from one of the most recognized agencies in the world. We're building on this in 2023 and beyond by further embedding non-financial KPIs to management incentives, which you can see on the right.
The targets you see here are our key metrics that we focus on within our five-year sustainable business strategy and cover key areas including digital inclusion, female and local empowerment, people development, and climate change. The first two are linked to our annual bonus, the next three are linked to our three-year LTIP, and the final two we see as key enablers to delivering our sustainable business strategy. This means management has significant financial incentives driving all of these, which are all very important to us as a business. Without further ado, I'll hand over to Manjit and look forward to talking to everyone at the end for the Q&A. Over to you, Manjit.
Thanks, Tom, and hello, everyone. It's great to be speaking with you all today. I'll be going through the financial results and starting on slide 13. Continuing on from what Tom mentioned earlier, and despite broader macro volatility we are seeing across the globe, we've had a very strong year, delivering on all metrics of our 2022 guidance. Looking at our actual performance versus guidance, 2022 was one of our busiest, our best ever years in terms of organic tenancy growth, with 1,601 tenancies added, which was at the upper end of guidance of 1,400-1,700.
From a financial perspective, our lease rate per tenancy has landed at the high end of the guidance range of 4% year-on-year, and adjusted EBITDA margin and CapEx both came within the guidance given. I'll be going through the financial details of these results over the next few slides, but in general, we are proud of our strong financial and operational delivery in 2022. Moving on to slide 14, where we present some of our main KPIs. We've continued to see adjusted EBITDA and portfolio free cash flow growth, both with double-digit year-on-year growth, which was predominantly driven by tenancy additions. In a few slides, we'll present how our robust business model effectively protects us from broader macro volatility and which importantly results in growth being linked to what is within our control, i.e., operational improvements and tenancy additions.
The effects of this is evident in our dollar EBITDA progression. Now, we have seen some moderate return on invested capital dilution, which was previously signposted during the year and at our Capital Markets Day, is really due to the initial dilution from our new acquisitions. These portfolios come with lower margins and lower tenancy ratios as they were purchased from mobile network operators who ran these as cost centers rather than as pure play businesses. This is where we see the opportunity to invest, to develop, and lease up these assets to deliver long-term compounding returns, all of which will drive up return on invested capital in the coming years. Moving on to slide 15, our site and tenancy growth. As mentioned earlier, we've delivered record organic sites and tenancy growth in 2022.
From a site perspective, we saw a 42% increase year-on-year, reflecting organic growth of 751 sites and 3,242 acquired sites across Malawi and Oman. Year-on-year, we've added 5,716 tenancies, which is a 30% increase from 2021. Organically we added 1,601, as mentioned earlier, and this is our second-best ever year of organic tenancy growth for the company. Our tenancy ratio has dropped slightly on a group basis, and again, this is largely driven by the lower tenancy ratios of the acquired sites in Malawi and Oman, which combined have a tenancy ratio of 1.3. On an organic basis, our tenancy ratio remained broadly flat, and this is due to the large site rollout during the year. On to slide 16.
We see here our revenue growth and EBITDA growth, which is 25% and 18% year-on-year, and up 14% and 9% organically respectively. The revenue growth is principally driven by tenancy additions, in addition to CPI and power escalation, which I'll come on to more detail on the following slides. Adjusted EBITDA growth was driven by our organic tenancy growth and contributions from our new markets. Our EBITDA margin declined by 3 percentage points year-on-year to 50.4%. The margin decrease is driven due to the dilution of new markets, but these margins will grow over the coming years and also due to higher power costs, which I'll explain now on the next slide. Moving on to slide 17.
Here we set out the walkthrough of our revenue and EBITDA progression for 2022. We've shown this detail breakdown throughout the year to really show our robust business model in action. To take you again through the analysis. The first four bars of each bridge, organic tenancy growth, power escalation, CPI escalation, and FX, all combine to make up organic growth, and acquisitions being the contributions from new markets. Organic tenancy growth of 1,601 year-on-year has driven the 8% growth in revenue and 10% in EBITDA. I wanna take a minute here to focus on escalation movements. As a reminder, we have escalations in every customer contract in all of our markets. For power, 50% of our contracts are quarterly power escalators and 50% have annual power escalators.
These escalate in relation to the local pricing for fuel and electricity. If the local prices go up, the escalators go up, if the prices go down, the escalators go down. For CPI, we have annual CPI escalators which kick in around January. Year on year, we've seen that on average, local fuel prices have increased by 36%, that's principally driven by DRC, Tanzania, and Ghana, which has accordingly increased revenues by 6% with further escalations expected in the first quarter of 2023. We have a robust business model by design. We have structured the increasing revenues to effectively offset the increased OpEx due to higher power prices to protect our EBITDA on a dollar basis. On the left-hand side, you can see that the power revenues increased by $25 million, that falls through to flat EBITDA on the right-hand side.
From a margin perspective, there is some dilution because the EBITDA margin on the power price movement is lower than the overall group margin, and in this case, has diluted margin by 2 percentage points. However, in a year of macro volatility where we've seen 36% power price increases, we've been able to keep our EBITDA flat on this portion, meaning that our contracts are escalating effectively and offset the OpEx impact of higher power prices. Moving on to CPI and FX. Local CPI is currently around 9%, with our revenues up 2% from our CPI escalators, which occur annually, as I mentioned earlier, and principally in the earlier half of the year.
The FX movements we've seen, mainly in Malawi and Ghana, occurred largely in the second half of the year, which have partially were offset by the CPI escalators that kicked in early last year. This has still left a minor impact on overall group results. However, we expect to see escalations capturing more of that CPI movement at our Q1 results as CPI escalators kick in around now. I think, standing back, this is a useful demonstration of our business mechanics. Looking at this both, looking from an EBITDA level, what you can see clearly here is that the key driver of growth is tenancy additions, both organically and inorganically.
Previously, as we mentioned at the Capital Markets Day, we showed how over the past six or seven years, our EBITDA growth is highly correlated to tenancy growth with little to no correlation to FX or oil prices. This shows further demonstration of our earnings growth being driven by tenancy additions and being well protected against macro volatility due to our robust business model. All meaning that we are, and will continue to, efficiently and effectively capture the compelling growth opportunity across our markets that Tom spoke to earlier. Moving on to slide 18. Again, here we set out a simple example showing the margin impact of power escalators. On the left-hand side, we show an illustrative example where a TowerCo does not have power escalators in their contracts.
In this simple example, we show power OpEx increased by $10 million without a corresponding increase in revenue, resulting in EBITDA reducing by $10 million and EBITDA margins reducing by 20 percentage points. On the right-hand side, we show the same illustration, but with the Helios Towers power escalators. In the middle table, you can see simply here that the OpEx price increase has been offset by the corresponding revenue increase from power price escalators. This protects EBITDA at $20 million. However, given the revenue has increased to $60 million to offset the OpEx increase, there is a margin dilution of 7 percentage points, which is lower than the without power escalation example. On the far right, we show this example in action. Again, what this shows is our revenues and OpEx have increased due to power prices and a subsequent impact on margins.
I think the combination of this slide and the walk-through on the prior slide show that whilst there may be macro volatility, importantly, we as a company are set up effectively to ensure that our dollar EBITDA is well protected. Moving on to slide 19. Here you'll see the usual breakdowns that we normally provide, which is very consistent from previous updates. 98% of our revenue come from large blue-chip mobile network operators, who are largely investment grade or near investment grade, comprising Airtel Africa, Vodacom, Tigo, Axian and Orange. Our largest single customer exposure is 28%, and that's spread across five different markets.
We have strong long-term contracts with our customers. At the end of the year, we had long-term contracted revenues of $4.7 billion with an average remaining life of 7.6 years, up from $3.9 billion at the end of 2021. This means excluding new wins and roll-outs, we already have that revenue contracted and provides a strong underlying earnings stream to the business. We also have 63% of our revenues in hard currency, being either U.S. dollars or euro peg, which increases to 67% when you annualize the new market acquisitions. That translates to 63%-72% when looking at it from an adjusted EBITDA perspective. This is a fantastic natural FX hedge for the business, which is further complemented by the escalators, which I spoke about earlier.
Finally, on this side, with the new market expansion, we're seeing a more diversified split of revenues per market. Pro forma for the full year of acquisition, no single market accounts for more than 34% of revenues. On to slide 20 and a look at CapEx. In 2022, we incurred total CapEx of $765 million, which includes $557 million of acquisition CapEx, principally related to Malawi and Oman. Organic CapEx came in at about $208 million, which is slightly above our guidance, and this is principally due to some CapEx spent in Oman late last year when we closed the transaction.
For 2023, we're guiding to a CapEx range of $170 million-$210 million, of which $130 million-$170 million is discretionary and $40 million being non-discretionary, both of which are in line with prior guidance we shared at the Capital Markets Day. As you can see in our CapEx guidance, now that we've gone through a key phase of expansion in 2023, we'll be focusing on organic growth and leasing up our expanded portfolio and keeping CapEx tightly controlled as always. Moving on to slide 21 and taking a look at our cash flow. As mentioned earlier, we've seen portfolio cash flow up of $201 million, up 20% year-on-year. This is principally driven by adjusted EBITDA growth, higher cash conversion, and controlled non-discretionary CapEx expenditure.
With regards to working capital, we've seen an $87 million working capital outflow. This is related to investments in advance of growth in 2023 on our larger, more diversified platform, which has now actually supported more than 400 tenancies being delivered so far this year, which is a fantastic start to the year, substantially above our typical seasonality, and again, evidence of the structural growth opportunities in our markets. Additionally, the working capital outflow also reflects the timing of customer payments, which as we've seen year-over-year and quarter-over-quarter, can be lumpy and can travel period end. That's typical for our business, with our receivable days increasing from 46- 57 days at 2022. To be clear, this is purely linked to timing and not related to any bad debt issues.
Year to date, we've already made good progress on receiving a good portion of that outstanding balance. As always, cash flow management and capital allocation is top of mind and discipline, which brings us to slide 22, which is a summary of our financial debt. Our net leverage at the end of 2022 was 5.1x, that's above our medium-term target range of 3.5x-4.5x, as we have communicated in prior results and throughout the year. The increase is due to the closing of our new markets, where we utilized predominantly debt capital for consideration. Excluding Oman, our net leverage would return lower at 4.1x, so around the midpoint of our target range.
Due to the U.S. dollar peg and relative risk profile of Oman, this allows it to be more highly levered with around $200 million of local debt and minority shareholder loans utilized to partially fund the acquisition. Importantly, we continue to have headroom against our financial covenants. The business is on a clear path to delever at roughly a rate of half a turn per annum, driven by organic growth. As it stands today, we have ample liquidity, roughly around half a billion dollars worth of available funds, comprising $120 million cash on balance sheet and $375 million of undrawn debt facilities. We sit on a very strong balance sheet with long tenure debt with an average remaining life of four years. 83% of our drawn debt is also at a fixed rate.
Overall, we're in a great position to say that we have a very stable financial package, and if we do look to any financing or refinancing, we'll be doing this for strategic reasons. On to slide 23, and a look at our guidance. We've changed the format of our guidance to provide expected ranges of expected outcomes for the year, and this will be the format going forward. Starting with tenancies, given our robust tenancy growth and pipeline, we're targeting organic tenancy growth of between 1,600-2,100 in 2023. This implies a year-on-year growth of 7%-9%. We're guiding adjusted EBITDA to a range of $350 million-$365 million, reflecting our strong commercial pipeline for tenancy growth and continued operational improvements.
Portfolio free cash flow is expected to be in a range of $230 million-$245 million, as mentioned earlier, CapEx is expected to reduce significantly to a range of $170 million-$210 million, of which $40 million is expected to be non-discretionary. As you can see, we're targeting another record year in 2023, this again simply demonstrates the robustness of our business model through macro volatility, as well as the compelling structural growth of our markets. Finally, on to slide 24, a housekeeping item. Following the completion of the key phase of expansion and investments in four new markets, we will now align our financial reporting to these segmented regional structures. This broadly mirrors the coverage of our regional CEOs and how we track performance internally.
East and West Africa will include Tanzania, Senegal, and Malawi and will become one reporting segment. Central and Southern Africa will be another, including DRC, Ghana, Madagascar, Congo-B, and South Africa, while Oman will be part of the Middle East and North Africa. We will provide financial metrics now on these groupings, and the new reporting structure will become effective from Q1 2023. With that, I'll pass back to Tom to wrap up.
Thank you very much for that, Manjit. That's great. I'm on slide 25 now. The really key takeaway is an outlook for 2023. Number one, you know, the key phase of our inorganic expansion is complete with the closing of Oman and Malawi last year. Of course we delivered record sites and tenancies as well in 2022. We've really demonstrated the resilience of our macro volatility. I think the slides that Manjit took us through on the power price and CPI protection are very, very key ones. You know, that really means that as a business we can drive forward benefiting from the structural growth on our robust business model, and navigate through these volatile times.
You know, looking forward for this year and beyond, we provided some really strong guidance here in terms of the EBITDA growth. Of course, over half of which is already in the bag and lower CapEx for this year. We've also provided some more medium-term guidance as well on EBITDA to provide everyone with a lot of clarity of what we're gonna be doing over the next few years. Thank you very much for listening, and I'll pass back to Nadia now to open up for the Q&A. Thank you.
Thank you. If you would like to ask a question today, please press star followed by one on your telephone keypad. If you choose to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your phone is unmuted locally. Our first question today goes to Jeremy Dellis of Jefferies. Jeremy, please go ahead, your line is open.
Yes, good morning, everybody, thank you very much for the presentation. I've got three questions, please. Firstly, you talked in terms of organic EBITDA growth of between 10%-12% between 2024 and 2026. Is it possible, please, to give us an indication as to what sort of CPI assumption underpins that growth rate so that we can define, you know, how much comes from lease up? In terms of your confidence on lease up driving that sort of medium-term EBITDA growth, you know, how much of those additional tenancies are sort of contracted at this stage? Second question has to do with the returns. I think you posted a 10.3% return on capital in 2022.
You've guided between 10% and 11% for 2023. Within the country mix, are there perhaps some outlying countries, perhaps ones whose returns are lagging a bit? Is there a case for some active portfolio management here, maybe exiting one or two countries, or are you confident that you can really raise returns across the portfolio? Finally, in terms of the new segmental disclosure, obviously noticed that sort of Oman sits on its own in one division. Could you talk to us please about the M&A opportunities that you think might sort of arise in the Middle Eastern market over the medium term? Thank you.
Yeah. Hey, Jerry. Thank you. Thank you very much for that. Look on the outlook for 2024 to 2026, you know, there is CPI assumptions in there. The real key driver though is, you know, tenancy growth within that. As we've guided to roughly 8% or so, or 7%-9% tenancy growth each year, that really is the main driver for it with, you know, fairly moderate assumptions in there on escalations at an EBITDA level, of course. Because our contracts have escalations and of course our costs also, you know, go up to some extent with CPI, the actual impact of CPI on EBITDA is fairly small, whatever the CPI is, and the real key driver of that is the tenancy growth.
Regarding the ROIC points, the guidance this year 10%-11%. Some of that is, Oman is starting with a slightly lower ROIC than some of the other markets, which reflects its risk profile. You see some of that within the 10%-11% guidance for this year. I think in terms of selling a market, that's not on the agenda at the moment. We're very focused on driving growth in all of our markets, you know, for the foreseeable future. Regarding Oman being on its own in the segmental disclosure, the M&A opportunities in the region of MENA, you know, certainly there are some.
I think that, you know, this year for us is very much focused on organic growth, returns growth and some deleveraging. We obviously are always, as a management team, looking for further inorganic opportunities as any responsible management team does. You know, deals in this space typically take a very long time to gestate. This year for us is all about focusing on organic growth and really integrating the new markets into the group.
Thank you. That's very clear.
Thanks, Jerry.
Thank you. The next question goes to John Karidis of Numis. John, please go ahead. Your line is open.
Thank you. Good morning. Congratulations to the team for a good set of results and good guidance. I've got a few questions. Firstly, in terms of the macro background, I'm interested in understanding if you're getting any signals from first of all, your customers in terms of their rollout plans.
Secondly, from local governments, looking to raise more revenue and therefore maybe increasing license costs, for example. That's one. The second of two is to do with the EBITDA guidance range that you've given us. It's super clear that the EBITDA is driven by tenancy growth. I suspect that tenancy growth in the year is a driver, but there might be other drivers as well. I just sort of wonder, apart from the tenancy growth that you expect in 2023, what else needs to happen for you, for example, to hit the top end of your EBITDA guidance range? Thank you.
Yeah. Thanks very much, John. Why don't I take these? Look, with regards to our customers, you know, we've got a really strong pipeline at this point in the year. As Manjit says, we've, you know, we're up to 400 or so tenancies so far in this quarter, this Q1, which, you know, historically can be quite a quiet quarter. We've got, you know, good pipeline and good visibility of pipeline for the next few quarters as well. You know, when we report Q1 in a few, well, I guess in a few weeks' time, you know, you'll see that coming through. That's very encouraging from our point of view, you know? I think our customers are generally all performing well as well, which is great.
Regarding, you know, the government and any regulatory license costs, you know, no, it's, you know, at the moment there's none of that conversation going on. Of course, we always keep a watchful eye on that across all our markets, but no, we're not hearing any of that at the moment. In terms of the EBITDA guidance range, yeah, look, I mean, the key, the number one by a long way is tenancy growth to be, you know, I guess quite simple and clear. It's, it's tenancy growth, colo, which is an internal phrase we use. You know, and there are some operational efficiency projects going on as well, but by far and away, tenancy growth, particularly colo growth, is the key here.
Great. Thank you.
Thanks, John.
Thank you. The next question goes to Fred Brennan of Morgan Stanley. Fred, please go ahead. Your line is open.
Morning, guys. Great to see the strong pent this morning. I just had one question, please. The day of Vodacom results, they commented that some of their sites in the DRC had been affected by severe flooding. I think there was some negative read across from the day. Can you comment on what you are seeing on the ground in the DRC and whether your sites have been impacted? Thank you.
Hey, Fred. Thanks for the question. Yeah, look, I won't comment on any specific customers, but, you know, of course we've operated in the DRC for, you know, since 2011, so going on 12 years. You know, like any market, there's always operational challenges to deal with. Flooding could be one of them. You know, and that's, you know, a regular occurrence in a lot of markets, to be honest, when there's rainy season. You know, ultimately what we focus on is to try and mitigate all of those risks through operational focus. And that's our, that's the name of the game of our business.
The DRC is probably, you know, well, certainly across our portfolio and probably across most of the continent, is one of the most challenging markets to operate in. That's, I guess, fairly common knowledge, and that comes with, you know, issues around the number of tarmac roads in the country and the terrain and where some of the sites are built. Ultimately, we aim to focus our processes, people and systems around all that in order to mitigate that as much as possible. We're very pleased with our performance in DRC and, you know, again, this year there's a lot going on in that market which is really exciting.
Great. Thank you.
Thanks, Fred.
Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. Our next question goes to Rohit Modi of Citi. Rohit, please go ahead. Your line is open.
Thank you for taking the question. Apologies if this has been said in previous calls, but I just wanted to understand quickly on your hard currency mix ratio. If you have a hard currency ratio right now based on the current contracts. As your new tenancies grow, are your new tenancies based on your current contracts or do you see the mix will change gradually towards mid-term? You know, 2026 you might have lower hard currency beta generation compared to now. Secondly, on the same line, given, you know, the FX pressure going on in most of your markets, do you see operators are now more willing to renegotiate the contract?
Do you see any kind of pressure from current clients that, you know, they need to renegotiate some of the elements of your contract? Third question, basically on your refinancing. I understand you don't have any refinancing coming in 2023, but there's some coming in 2024 and 2025. How are you placed for that? Are you already in discussions with banks around that? How do you think we should see interest costs going forward, you know, beyond 2023? Will we see increase or sustainable increase in interest costs going forward? Thank you.
Thanks. Thanks, Rohit. Maybe I'll take the first two. Manjit, you take the third one on the refi.
Sure.
Yeah, I mean, first one is quick. I mean, look, I think we generally expect, you know, sort of reasonably standard distribution of new tenancies across the group. From an organic basis. I wouldn't expect any major changes up or down of the currency mix based on new tenancies. I think we'll see a fairly even spread across the group over the coming, you know, few years. In customer renegotiation, look, I mean, you know, currency is usually one of the things out of about 50 things that are on the list when any contract's negotiated. You know, it's that, it's escalators, it's various operational requirements in the contract. It all goes into the mix, and we always consider, you know, everything holistically. You know, we always prefer hard currency where we... Where possible.
That's obviously made easier because quite a few of our markets actually are based on hard currency anyway. to some extent it's not even a conversation in, in those markets such as, you know, Oman, Senegal, Congo, DRC, et cetera. we'll always take it into consideration in, in the whole based on what else is being negotiated. I wouldn't suggest there's any kind of major change on that coming soon at all. Manjit, over to you for the refi.
Yeah. Thanks, Tom. Yeah, actually, I just reiterate that point you made at the end, which is that You know, when it comes to our hard currency makeup, I mean, a lot of that is made up by the fact that we're an innate hard currency market. DRC is dollarized. Oman is dollar pegged. Your Congo- Brazzaville, Senegal, who are euro pegged. These are very, very stable currency markets. The actual relative risk is I'd say relatively limited. In terms of the refinancing, look, we continue to keep our options open. I wouldn't say we're in any active discussions. As you would expect, and what we've always done, we always remain very, very nimble and ready to go in to access the capital markets whenever we think that that will be around.
you know, we always have our perspective on eyes. We're always ready, we're always looking, and if something comes up that we think is of strategic benefit, then we'll go for it. For now, I wouldn't point to any refinancing happening in the very, very short term for now. Again, we do keep our eyes open.
Thank you.
Thank you.
Thanks.
As another reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. Our next question goes to Bharath Nagaraj of Berenberg. Bharath, please go ahead. Your line is open.
Thank you. Good morning. Congrats on the results. Just a quick question from me. Can you please provide some color on the Tanzanian market with regards to further leasing up, given that the tenancy ratio has been rather flat in the last three years? Thank you.
Yeah. Hi. Hey, Bharath. I'll take this one. Yeah, look, I think the, you know, the Tanzania market continues to be a very, very strong market for us. There's four major mobile operators there, who are all, you know, significantly active. There's a, you know, very, very low penetration. I think it's below 50% in terms of people with SIM cards in Tanzania. There's significant growth ahead. I think over the past three years we have actually delivered very large tenancy rollout. Some of those have been Build-to-Suit and some colos, which is why when you do the math on the tenancy ratio, the tenancy ratio remains fairly flat.
That is just simply because of it's been a mixture of Build-to-Suit and colos, which is the reason you're seeing that. No, the market continues to be strong and we continue to work with all the major mobile operators in the market for more lease up and more rollout, which is ongoing right now.
Perfect. Thank you. Very clear.
Thanks, Bharath.
Thank you. We have no further questions. I'll hand back to you, Tom, for any closing remarks.
Yeah. Thanks, Nadia. Look, thank you very much everyone for dialing in today. We really value your time and your attention, so thanks very much. If you've got any follow-on questions, you know where we are. Speak to me, Manjit, or Chris, at any time. We really look forward to speaking to you again for our Q1 and reporting that. Have a good day, have a good week, and we'll talk to you soon. Thanks very much.
Thank you. This now concludes today's call. Thank you so much for joining. You may now disconnect your lines.