IHS Holding Limited Reports First Quarter 2025 Financial Results

LONDON--(BUSINESS WIRE)--IHS Holding Limited (NYSE: IHS) (“IHS Towers” or the “Company”), one of the largest independent owners, operators, and developers of shared communications infrastructure in the world by tower count, today reported financial results for the first quarter ended March 31, 2025.

CONSOLIDATED HIGHLIGHTS – FIRST QUARTER 2025

The table below sets forth the select financial results for the three months ended March 31, 2025 and 2024:

Financial Highlights

• Revenue of $439.6 million increased 5.2% year-on-year, with organic growth of 25.6% more than offsetting the impact of the 13.8% depreciation of the Nigerian Naira (“NGN” or “Naira”) versus the U.S. dollar (“USD”) and the disposal of the company’s Kuwait operations in December 2024.
• Organic growth of 25.6% was driven by 7.9% Constant Currency⁽¹⁾ growth as a result of increased revenue from Colocation, Lease Amendments, New Sites and escalators, with the remainder a result of foreign exchange (“FX”) resets and power indexation.
• Adjusted EBITDA of $252.6 million (up 36.4% year-on-year) resulted in an Adjusted EBITDA Margin of 57.5%, an increase of 1,320 basis points year-on-year, driven by continued financial discipline, and with the first quarter of 2024 negatively impacted by NGN devaluation in that period. Income for the current period was $30.7 million.
• Adjusted Levered Free Cash Flow (“ALFCF”) of $149.9 million, with 247.7% growth driven by improved profitability and a re-phasing of interest payments between quarters following the November bond refinancing. Cash from operations was $216.3 million.
• Capital expenditure (“Total Capex”) of $43.6 million, down 17.8% year-on-year, reflecting actions taken to improve cash flow generation.
• Consolidated net leverage ratio⁽²⁾ of 3.4x, down 0.3x from the fourth quarter of 2024, within the target of 3.0x-4.0x.
• First quarter 2025 financial results in line with expectations; full year 2025 outlook reiterated.

Strategic and Operational Highlights

• Announced, in May 2025, an agreement to dispose 100% of IHS Rwanda to Paradigm Tower Ventures at an enterprise value⁽³⁾ of $274.5 million as part of the strategic initiatives targeted at shareholder value creation options.
• Renewed MLA with Airtel Zambia covering approximately 1,100 tenancies until August 2035.
• Continued reduction in volatility of the NGN with 0.5% appreciation versus the USD during the quarter. USD availability remains in line with business requirements.
• Continued year-on-year organic growth in Towers (39,212) and Tenants (59,606) reaching a Colocation Rate of 1.52x at the end of the first quarter. Lease Amendments increased during the period to 39,705.

Sam Darwish, IHS Towers Chairman and Chief Executive Officer, stated, “This has been a strong start to 2025, with solid growth across our key metrics of revenue, Adjusted EBITDA and ALFCF, and a reduction in Total Capex, all in line with our expectations, and we are pleased to reiterate our full year 2025 outlook as a result. Our strong performance is a continuation of the trends we have seen in recent quarters as we benefit from the commercial and financial progress that was made during 2024 and into 2025. Our focus on financial discipline and capital allocation is delivering sustained improvements in our profitability and cash flow generation, and this, supplemented by select asset disposals, has resulted in a further reduction in our consolidated net leverage ratio to 3.4x, down from 3.7x at the end of 2024. The agreement to sell our Rwanda operations, announced today, for an enterprise value of $274.5 million, forms part of our strategic initiatives targeted at shareholder value-creation options and highlights the value contained within our wider portfolio.

Looking ahead, we remain excited by the strong growth opportunities across our footprint, underpinned by continued 5G deployment across our markets. Our confidence in the outlook is further supported by the improving backdrop within Nigeria, our largest market with over 16,000 towers, with positive momentum driven by greater stability in the Naira and recent carrier tariff rate increases for our customers. Following this strong start to the year, we will continue to implement our strategy to further improve profitability and cash flow generation while strengthening our balance sheet, with the goal of maximizing returns for all our stakeholders.”

Full Year 2025 Outlook Guidance

The following full year 2025 guidance is based on a number of assumptions that management believes to be reasonable and reflects the Company’s expectations as of May 20, 2025. Actual results may differ materially from these estimates as a result of various factors, and the Company refers you to the cautionary language regarding “forward-looking” statements included in this press release when considering this information.

The Company’s outlook is based on the following:

• Organic revenue Y/Y growth of approximately 12% (at the mid-point).
• Average foreign currency exchange rates to 1.00 U.S. dollar for January 1, 2025, through December 31, 2025, for key currencies: (a) 1,640 Nigerian Naira; (b) 5.90 Brazilian Real (c) 0.96 Euros (d) 18.50 South African Rand.
• Full year contribution from Rwanda. No contribution from Kuwait and Peru operations sold during 2024.
• Revenue withholding tax in Nigeria reduced from 10% to 2% effective January 1, 2025.
• Approximately 500 Build-to-suit sites, of which approximately 400 sites in Brazil.
• Consolidated net leverage ratio⁽¹⁾ target of 3.0x-4.0x.

RESULTS OF OPERATIONS

Impact of Naira devaluation

In November 2024, the Central Bank of Nigeria directed authorized dealers to use a new trading platform - Bloomberg BMatch as the Electronic Foreign Exchange Matching System (“EFEMS”) for foreign exchange related activities. It is expected that the platform will enhance the integrity and operational efficiency of the foreign exchange market by providing greater price discovery. During the period to March 31, 2025, the Naira exchange rate to the U.S. dollar was relatively stable compared to 2023 and 2024 as shown below:

Due to the Naira devaluation, Revenue and segment Adjusted EBITDA in the first quarter of 2025 were negatively impacted by $60.9 million and $40.6 million, respectively, compared to the same period in 2024. In the first quarter of 2025, the foreign exchange resets in some of our contracts partially offset these impacts. The appreciation of the Naira in the first quarter of 2025 resulted in unrealized foreign exchange gains of $11.9 million on U.S. dollar denominated intercompany loans advanced to our Nigerian operations. The unrealized gains and losses are recorded in finance costs, although Group net assets are not impacted since equal and opposite gains and losses are recorded in equity on the retranslation of the Nigerian operations’ assets and liabilities (which include these loans).