IHS Towers ($IHS), the world’s fourth-largest independent communications infrastructure provider, reduced its losses for 2024 to $1.64 billion from $1.98 billion in 2023. While this loss highlights a moderate improvement, the company’s performance is far from impressive. It continued a trend of steep losses for a fourth consecutive year.
The company’s revenue declined 19.5% to $1.71 billion in 2024, down from $2.12 billion in 2023, largely due to currency fluctuations. However, organic revenue saw a significant 48.1% year-over-year increase, attributed to foreign exchange resets, power indexation, escalations, and growth in tenant revenue. Nigeria, which accounts for 63% of IHS Towers’ revenue, has been particularly challenging due to the naira’s depreciation, which has impacted dollar-denominated loans used to support local operations.
“We have de-risked our business through extending commercial contracts with key customers into the next decade, reduced our exposure to power prices, extended our debt maturities and completed some of our disposals target,” Sam Darwish, ISH Towers Chairman and CEO said.
“As we enter 2025, we remain focused on further enhancing our profitability and cash flow generation, as can be seen in our FY25 guidance, and we are committed to further strengthening our balance sheet, supported by potential further select asset disposals, allowing us to deliver increasing returns for all stakeholders.”
Since its 2021 New York Stock Exchange listing, IHS Towers has faced investor pressure due to persistent losses, resulting in a significant market value decline of $6 billion. To mitigate currency and power cost challenges, the company has renegotiated contracts with major clients like MTN Nigeria, incorporating USD and local currency fees, and diesel cost adjustments. It also divested a 70% stake in IHS Kuwait Limited to Zain Group for $230 million.
The company aims to achieve organic revenue growth of 12% in 2025, relying on potential tariff increases by telcos, debt renegotiations to local currency, and cost efficiency. Despite the macroeconomic headwinds, Nigeria remains IHS Group’s largest revenue contributor, with $258 million in quarterly revenue, significantly exceeding other regions like SSA, Latin America and MENA.
Yet, worry for Africa’s largest telecom tower company exists as liabilities surpass assets. Total assets decreased to $4.2 billion in 2024 from $5.3 billion in 2023, while total liabilities were $4.5 billion in 2024, down from $5 billion in 2023. Cash reserves declined to $775.9 million from $902.9 million in 2023, reflecting a decreased operating income.
