A year after making amends with MTN, IHS Towers has reported a turnaround in its telecoms infrastructure business, helped by stability in the Nigerian naira.
Africa’s largest cellphone tower operator reported revenue of $433.3m for the second quarter to end-June, down 0.5% year on year, while adjusted earnings before interest, tax, depreciation and amortisation (ebitda) of $248.5m was 0.9% lower.
The group noted that organic growth of 11.1% was driven by 9.9% constant currency growth, with the remainder being the net benefit of foreign exchange resets and power indexation.
Constant currency growth was driven by increased revenue from co-location, lease amendments, new sites and benefits from price increases.
This is a marked difference from the same time last year when IHS reported a 20.3% fall in revenue for the second quarter of 2024, largely as a result of a 63% devaluation of the naira.
“Our confidence is underpinned by the positive backdrop within our largest market, Nigeria, bolstered by the ongoing stability of the naira as well as the carrier tariff rate increases that our Nigerian customers announced earlier this year,” said Sam Darwish, chair and CEO of IHS.
During the period, IHS agreed to dispose 100% of its Rwanda operation to Paradigm Tower Ventures for an enterprise value of $274.5m “as part of the strategic initiatives targeted at shareholder value creation options”.
In December 2024, IHS completed the disposal of its 70% interest in IHS Kuwait. The unit, accounting for 1,678 towers, contributed $11.1m to revenue and $6.2m in adjusted ebitda in the second quarter of 2024.
Total capital expenditure for the period stood at $46.3m, down 13.8% year on year, “reflecting actions taken to improve cash flow generation”.
“Our positive momentum continued in the second quarter, with strong performances across our key metrics of revenue, adjusted ebitda and ALFCF [adjusted levered free cash flow], in combination with a continued reduction in total capex,” said Darwish.
“Given our encouraging year-to-date progress, together with sustained macroeconomic stability across our markets, we are also pleased to be raising our full-year 2025 guidance across all key metrics.”
In August 2024, IHS and MTN put aside some of their differences, announcing a renegotiated agreement of the mobile operator’s tower leases in Nigeria. The move helped MTN to reduce amounts that it has to pay for the infrastructure in foreign currency, specifically the dollar.
With this new deal in place, IHS and MTN have completed the renewal of about 26,000 MTN tenancies on IHS’s infrastructure across six African markets — Nigeria, Rwanda, Ivory Coast, Cameroon, Zambia and SA.
This benefit is already apparent for MTN as its Nigeria business reported a big turnaround in its earnings for the first half of 2025.
IHS, in which MTN holds a 26% stake, had a public spat with investors in 2023/24 due to governance issues. Apart from being its largest investor, MTN is IHS’s largest customer.
In 2023, MTN said it wanted to have a greater say in IHS’s activities. It drafted a proposal to align its 26% equity stake and voting rights — capped at 20% — that failed to be put to a vote at IHS’s AGM.
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