Crown Castle International has reported financial results for the third quarter that ended on Sept. 30. The company maintained its full year 2021 outlook and issued its full year 2022 outlook.
“We delivered strong results in the third quarter and increased our annualized common stock dividend by approximately 11 percent to $5.88 per share,” said Jay Brown, Crown Castle’s CEO. “The dividend increase is supported by the expected combined growth in 2021 and 2022, and represents the second consecutive year of dividend growth that meaningfully exceeds our long-term growth target of 7 to 8 percent per year. We are generating this level of growth as a result of a robust tower leasing environment, which we expect will continue in 2022, consistent small cell install volumes in 2021 and 2022 and stable fiber solutions growth, which combine to produce expected average funds from operations (AFFO) per share growth at the high end of our long-term target. We are focused on supporting our customers as they upgrade their existing cell sites as part of the first phase of the 5G build out in the U.S., which is resulting in record tower application volumes this year and an expected 20 percent increase in core leasing activity for our towers segment for full year 2022 when compared to projected 2021 levels. This expected level of core leasing activity is approximately 50 percent higher than the trailing 5-year average for our towers business.”
Brown said that the company expects the deployment of 5G wireless communications networks will extend its opportunity to create value for its shareholders.
“We expect our ability to offer towers, small cells and fiber solutions, which are all integral components of communications networks, will be critical for our customers as they increase the density of their networks during the next deployment phase of 5G,” he said. “Our diverse portfolio of assets and customer solutions has enabled us to outperform our long-term target growth rate of 7 to 8 percent since we established the target in 2017, demonstrating how well positioned Crown Castle is to capitalize on the robust demand for connectivity in the United States. During that period, we have grown dividends per share at a compound annual growth rate of 9 percent, and we believe our strategy will allow us to deliver on our long-term dividend per share growth target.”
Dan Schlanger, Crown Castle’s chief financial officer, said that the company believes it is in a position to deliver on its long-term dividend per share growth target while at the same time making investments in its business that will generate attractive long-term returns and support future growth.
“We believe our business and balance sheet are positioned well to support consistent AFFO growth through various economic cycles, including during periods of higher inflation and interest rates,” Schlanger said. “Our cost structure is largely fixed in nature, and we have taken deliberate steps to further strengthen our balance sheet position to where we sit today with more than 90 percent fixed-rate debt, a weighted average maturity across our debt of more than nine years and a weighted average interest rate of 3.1 percent. In addition, based on the expected growth in cash flows for full year 2022, we expect to maintain a consistent dividend payout ratio and once again fund our discretionary capital budget next year with free cash flow and incremental debt capacity, consistent with our investment-grade credit profile.”
Crown Castle reported that as of Sept. 30, it had 40,000 towers with an average number of tenants of 2.3 per tower; and 80,000 route miles of fiber-optic cable. It reported that the market value of all of its outstanding common shares was $74.9 billion.