IHS Holding Limited Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Revenue saw 26% organic growth in Q1 2025, driven by 8% constant currency growth, FX resets, power indexation, and new sites. Adjusted EBITDA reached $253 million in the quarter with a margin of 57.5%, up 1,320 basis points year-on-year.
• ALSCF was $150 million in Q1 2025, an increase of almost 250% year-on-year, driven by improved profitability and rephasing of interest payments. Total CapEx was $44 million, down 17.8% year-on-year.
• Announced to sell 100% of IHS Rwanda for an enterprise value of $274.5 million, with the 8.3x adjusted EBITDA after leases multiple being materially higher than the IHS Group multiple.
• Continues to assess Group-wide costs, CapEx structures, and ways to introduce technology like AI for future efficiencies.

Segment Performance

• Nigeria Segment: 2025 Q1 revenue was $271 million, up 19% year-on-year on a reported basis, driven by FX resets, power indexation, escalations, and tenancy growth. Segment adjusted EBITDA was $179 million, a 74.1% increase from a year ago, with a margin of 66%.
• Sub-Saharan African Segment: Revenue decreased 8.1% year-on-year, while segment adjusted EBITDA increased 2.9% year-on-year. This was due to lower revenues but also lower associated costs in South Africa, with a segment adjusted EBITDA margin of 59.4%.
• Latam Segment: Towers and tenants grew by 6.7% and 8.2% respectively year-on-year, but revenue decreased 0.5% due to negative FX rate movements. Segment adjusted EBITDA increased 5% with a margin up 420 basis points.

Guidance

• Maintain 2025 full-year outlook. First quarter ALFCF was $150 million, with expectation of stepping down in Q2 but on track for $350 million to $370 million full-year ALFCF.
• Leverage ratio was 3.4x at end of Q1 2025, expected to remain within the 3x to 4x target range in 2025, with potential adjustment following completion of Rwanda disposal.

Risks

• Macro-economic uncertainties globally which can impact the business.
• Impact of MTN Nigeria tenant churn and site vacating on revenue and comparisons.
• Currency movements and their impact on revenue and financial metrics.

Question and Answer

Q: Jim Schneider of Goldman Sachs asked about Q1 performance being in line with expectations, any better-than-expected aspects, and risks to 2025 outlook.

A: Steve Howden responded that Q1 was in line with expectations, with FX tailwind in Nigeria Q1 due to Naira appreciation, slower-than-planned MTN Nigeria tenant churn as a tailwind, and monitoring global macroeconomic environment as key risk.

Q: Michael Rollins of Citi inquired about organic growth of Rwanda portfolio and multiyear financial growth algorithm.

A: Steve Howden said Rwanda business had a 2.05 lease-up rate, and the Group aims for double-digit organic revenue growth, higher EBITDA growth than revenue, and higher ALFCF growth than EBITDA.

Q: Gustavo Campos of Jefferies asked about EBITDA growth from Nigeria related to FX resets and details of Rwanda sale.

A: Steve Howden stated FX resets depend on currency movements, Rwanda sale is debt-free with $274.5 million enterprise value and EBITDA in high 30s over last 12 months; Sam Darwish added they continue to evaluate other asset sales to unlock shareholder value