IHS Holding Limited is tightening its grip on Africa’s telecom infrastructure with contract renewals from Airtel and MTN, securing the sustainability of its tower business.
The company’s latest earnings report for 2024 reveals aggressive strategic moves, including long-term lease extensions and a transition in its debt structure to counter market challenges.
In Q4, revenue reached $437.8 million, a 4.2% increase compared to the previous quarter, driven by growth in colocation, lease amendments, and new sites. However, year-on-year revenue decreased by 14.1%, although it surged by 39.3% on an organic basis.
This organic growth was led by a 9.2% constant currency increase, alongside foreign exchange resets and power indexation, which mitigated a 53.1% non-core decline.
IHS closed the year with 39,229 towers and 59,343 tenants, showing steady growth in colocation and lease amendments. The company renewed all MTN tower contracts and extended its agreement with Airtel Nigeria, securing 72% of its total revenue under long-term deals.
Despite a 48.1% surge in organic revenue, overall earnings took a hit due to the Nigerian naira’s 57% devaluation. This currency collapse wiped out an estimated $1.4 billion in revenue value, pushing IHS’s total reported revenue down 19.5% to $1.7 billion.
The company reported a $1.6 billion net loss for 2024, with part of that tied to unrealized forex losses. However, IHS’s current strategies reveal a focus on long-term stability.
In a bid to reduce exposure to currency risk, IHS raised $1.2 billion through dual-tranche senior notes, using the proceeds to extend debt maturities and convert more liabilities into local currency. It also slashed capital expenditure by 56.3%, prioritizing profitability over expansion.
IHS Towers also focused on reducing risk in its operating model, by restructuring its power management strategy. The company introduced power indexation into its MTN Nigeria contracts and unbundled power services in South Africa. These changes aim to stabilize earnings by reducing exposure to energy price fluctuations.
Commenting on the financial statement, Sam Darwish, IHS Towers Chairman and CEO, said, “We’re reporting a strong performance in the fourth quarter, with our key metrics revenue, Adjusted EBITDA, and ALFCF all ahead of our guidance… We believe we are well placed to leverage our market-leading positions and support growing demand for our critical communications infrastructure.”
In order to enhance shareholder value, IHS Towers completed the disposal of its 70% interest in IHS Kuwait Limited for $230 million.
The company foresees organic revenue growth of 12% in 2025, banking on increased 5G deployment and higher carrier tariffs in Nigeria to drive profitability.
Nigeria remains both the company’s biggest opportunity and its biggest risk. IHS managed to extract $271 million from the country despite forex restrictions, asserting its financial resilience.
