Ihs Holding Ltd. ((IHS)) has held its Q1 earnings call. Read on for the main highlights of the call.
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In the latest earnings call, IHS Holding Ltd. showcased a predominantly positive sentiment, underscored by robust organic revenue growth and a notable increase in adjusted EBITDA. The company also highlighted successful asset disposals, although these achievements were slightly tempered by challenges such as currency depreciation and site churn in Nigeria. Overall, the company demonstrated strong financial discipline and maintains a positive outlook for the year ahead.
Strong Organic Revenue Growth
The company reported an impressive 26% organic growth in revenue, primarily driven by increased revenue from colocation, lease amendments, new sites, and CPI escalators. This growth reflects the company’s ability to capitalize on market opportunities and expand its revenue streams effectively.
Adjusted EBITDA Increase
IHS Holding Ltd. achieved an adjusted EBITDA of $253 million, with a margin of 57.5%. This represents a significant improvement of 1,320 basis points compared to the previous year, highlighting enhanced operational efficiency and profitability.
Significant Increase in ALFCF
The company’s Adjusted Levered Free Cash Flow (ALFCF) saw a remarkable increase of approximately 248% year-over-year. This surge was driven by improved profitability and rephased interest payments, showcasing the company’s strong cash management strategies.
Reduction in CapEx
Total CapEx for the quarter was $44 million, marking a 17.8% decrease year-over-year. This reduction reflects the company’s strategic focus on optimizing capital allocation and maintaining financial discipline.
Successful Asset Disposal
IHS Holding Ltd. announced the sale of IHS Rwanda for $274.5 million, achieving a transaction multiple of 8.3x adjusted EBITDA after leases. This disposal aligns with the company’s strategy to streamline operations and enhance shareholder value.
Improved Net Leverage Ratio
The consolidated net leverage ratio improved to 3.4x, down from 3.7x at the end of 2024. This decrease indicates significant progress in the company’s financial discipline and debt management.
Impact of Currency Depreciation
Despite strong organic growth, the company faced challenges due to the 14% depreciation of the Naira against the dollar. This currency fluctuation posed a headwind to the company’s financial performance in Nigeria.
Site Churn in Nigeria
The company experienced the initial impact of 1,050 sites that MTN Nigeria will vacate this year, contributing to an approximate $1.6 million reduction in revenue year-on-year. This site churn presents a challenge to maintaining revenue growth in the region.
Decline in Towers and Tenants
Both towers and tenants were down approximately 3% and 1%, respectively, year-over-year. This decline was primarily due to divestitures of towers in Kuwait and Peru, reflecting the company’s strategic realignment efforts.
Forward-Looking Guidance
Looking ahead, IHS Holding Ltd. remains optimistic about the growth opportunities driven by the ongoing deployment of 5G, particularly in its largest markets, Nigeria and Brazil. The company reiterated its guidance for full-year 2025, reflecting confidence in sustaining its operational and financial momentum. The focus on strategic initiatives and maintaining a strong liquidity position with over $900 million available further underscores its positive outlook.
In summary, IHS Holding Ltd.’s earnings call conveyed a positive sentiment, highlighted by strong financial performance and strategic asset management. Despite facing some challenges, the company remains confident in its growth prospects and financial discipline. Investors can look forward to continued momentum as IHS capitalizes on market opportunities and strengthens its operational framework.