American Tower’s 2022 Performance Sets Stage for Continuing Growth

American Tower (NYSE: AMT) reported solid results for full-year 2022, to set the stage for continued growth for the next several years. Property revenues grew nearly 15 percent to $10.5 billion including organic tenant billings growth of 7 percent. AMT’s leasing demand is being driven by growth across its tower and data center portfolios. This growth is partially offset by a reserve taken against slow payments from Indian mobile network operator, Vodafone Idea, which is working through a difficult financial situation. Adjusted EBITDA was up 11 percent to $6.6 billion and AFFO came in at $4.5 billion, up almost 6 percent year-to-year.

AMT’s global tower count grew 2 percent YoY to 223,055 at year-end 2022. India is the company’s largest market accounting for 35 percent of the total. Africa and Latin America make up another one-third. Its home U.S. & Canada market accounts for 19 percent of the total sites but drives 48 percent of total property revenues. 

The company says that its comprehensive master lease agreements signed with T-Mobile, AT&T, DISH and most recently, Verizon, establish “a predictable growth path and strategic alignment between American Tower and its customers, while also demonstrating the value and criticality of its nearly 43,000 tower portfolio in the U.S. to support 4G, 5G and future network developments.” These holistic agreements allow its MNO tenants to deploy rapidly and efficiently and are an attractive value proposition for the 5G densification cycle. More importantly, AMT believes such agreements can be scaled across its global footprint over time. 

While not foreseeing any strategic M&A activity, AMT is maintaining a very active new tower build program. Since the beginning of 2018, AMT has added nearly 26,000 sites to its international portfolio through new builds, more than two times the volume of the previous five-year period. These macro sites now contribute approximately $250 million in tower cash flow and a net operating income (NOI) yield of approximately 21 percent.

In 2022, AMT constructed nearly 7,000 towers, a company record, including over 2,300 sites built in 4Q22 alone. It expects to invest roughly $1.5 billion to build another 4,000 new sites in 2023. Of that total, the company plans to build 1,600-1,700 in both Africa and India, 400-500 sites in Europe and just under 300 sites in Latin America,

The company emphasizes the opportunity to build in all of these markets with attractive NOI yields. More than the volume of sites, the company sees expanding its footprint in Europe, in particular, as contributing to financial growth with high credit quality customers in really attractive economies. AMT’s 2023 guidance is for property revenue to grow 3 percent to $10.8 billion and Adjusted EBITDA increasing 4 percent to $6.9 billion. 

Interestingly, AMT is focusing on building green sites, as it is doing with Airtel Africa. AMT has brought in solar to over 15,000 sites and installed lithium-ion batteries in over 19,000 sites while reducing the diesel fuel consumption at the sites by 5 million liters over the past several years. As part of its agreement with Airtel, AMT is able to offer power-as-a-service that maintains continuous power to those sites while reducing carbon emissions.

By John Celentano, Inside Towers Business Editor

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