IHS Towers has pulled back on infrastructure spending in the first half of 2025, focusing more on financial discipline and cash-flow optimisation rather than aggressive expansion.
The company is prioritising core operations in Nigeria, South Africa, and Brazil, while exiting less profitable markets through major asset sales.
The group spent $89.9 million on new tower projects in H1, a 15.8% drop from the $106.8 million invested a year earlier. The slowdown was felt across both quarters: Q1 capital expenditure fell 17.8% to $43.6 million, and Q2 slipped 13.8% to $46.3 million.
Cuts were most pronounced in Latin America, where new site builds and fibre rollouts were scaled back, while Nigeria saw investment fall by 5.5% in Q1 and 10.4% in Q2 due to reduced maintenance, fibre deployment, and site upgrades.
This reallocation is closely tied to a deliberate reshaping of IHS’s portfolio. In December 2024, the company sold 1,672 towers in Kuwait, and in May 2025 it announced the $274.5 million sale of its Rwanda operations—including 1,465 sites—to Paradigm Tower Ventures at a valuation multiple of 8.3x adjusted EBITDA, well above the group’s average.
These divestments are intended to streamline operations and focus on markets offering long-term tenancy agreements and stronger co-location potential.
Debt reduction has become a clear priority. Proceeds from disposals have been channelled into paying down high-interest loans in Nigeria and Brazil, cutting the net leverage ratio from 3.9x in 2024 to 3.4x in Q1 2025. Full-year capex guidance has also been revised down to $240–$270 million from $260–$290 million.
Nigeria’s “Project Green,” launched in 2022 to cut diesel dependence through solar deployment, battery storage integration, and improved grid connectivity, has reduced upgrade requirements and is projected to generate $77 million in annual free cash flow savings by year-end.
However, the biggest operational pressure has come from tenant churn in Nigeria. MTN Nigeria, the company’s largest client, renewed 13,500 tenancies through to 2032 but opted not to extend 1,050 sites, awarding those to American Tower Corporation.
This resulted in a net loss of 420 tenants in Q1 and 688 by Q2 on a year-on-year basis. Despite the setback, IHS Towers maintained a colocation rate of 1.52x in Nigeria—on par with emerging market norms—and has sought to backfill churned sites with other customers.
MTN’s decision shows a push to diversify its infrastructure partners and manage cost and operational risk. Its contracts with both IHS and ATC include clauses linking pricing to inflation and diesel costs, alongside mixed naira-dollar payment structures to mitigate currency volatility.
Financially, the company’s performance has been resilient. H1 revenue reached $872.9 million, with Q1 rising 5.2% year-on-year to $439.6 million on the back of 25.6% organic growth, while Q2 slipped marginally by 0.5% to $433.3 million but still beat market expectations.
Adjusted EBITDA stood at $252.6 million in Q1 and $248.5 million in Q2, while net income rose to $30.7 million and $32.3 million, reversing losses recorded last year. Operating cash flow jumped 68.1% to $254.8 million.
Commenting on the results, Sam Darwish, CEO of IHS Towers, said: “Our improved outlook reflects what we believe are the benefits of the solid commercial progress we have made as well as our strong focus on financial discipline, which is delivering sustained improvements in our profitability and cash flow generation.”
IHS expects 5G rollouts to drive further lease amendments, new site demand, and higher colocation rates across Africa.
With the naira recording only a 0.3% devaluation in Q2, management is optimistic that foreign exchange conditions will support its full-year revenue guidance. The challenge for H2 will be balancing reduced investment with maintaining growth momentum in its largest and most competitive markets.
