Ihs Holding Ltd. ((IHS)) has held its Q3 earnings call. Read on for the main highlights of the call.
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IHS Holding Ltd. recently held its third-quarter earnings call, presenting a generally positive outlook characterized by strong revenue and growth metrics, increased profitability, and successful deleveraging efforts. The expansion in Brazil and favorable macroeconomic conditions in key markets further bolstered the positive sentiment. However, challenges such as tenancy churn and increased costs slightly tempered the overall positive outlook.
Strong Revenue and Growth
The company reported a robust revenue for Q3 2025, amounting to $455 million. This represents a constant currency revenue growth of nearly 9%, driven by CPI escalators, colocation lease amendments, and the establishment of new sites. This growth underscores IHS Holding Ltd.’s strategic initiatives to enhance its revenue streams.
Increased Adjusted EBITDA
IHS Holding Ltd. achieved an adjusted EBITDA of $261 million, with a margin of 57.5%. This marks an increase of over 6%, reflecting the company’s ongoing commitment to cost control and driving profitability. The improved EBITDA margin highlights efficient operational management.
Significant ALFCF Growth
The Adjusted Leverage Free Cash Flow (ALFCF) saw a remarkable increase of more than 80% year-on-year, reaching $158 million. This significant growth in ALFCF demonstrates the company’s effective cash flow management and its ability to generate substantial free cash flow.
Deleveraging Success
IHS Holding Ltd. successfully reduced its consolidated net leverage ratio to 3.3 times, a decrease of 0.6x year-on-year. This was supported by the initial $175 million proceeds from the Rwanda disposal, showcasing the company’s focus on strengthening its financial position.
Brazil Market Expansion
The company expanded its partnership with TIM in Brazil, planning to build up to 3,000 new sites. This expansion highlights significant growth potential in the LATAM segment, positioning IHS Holding Ltd. for further market penetration and revenue generation.
Positive Macroeconomic Trends in Key Markets
Encouraging macroeconomic trends were observed in key markets, such as Nigeria, with naira appreciation, and Brazil, with currency strength and high telecom sector growth. These trends are expected to drive organic growth and profitability for IHS Holding Ltd.
Tenancy Churn Impact
The company experienced a tenancy churn of 2,576 sites due to an updated agreement with Nine Mobile and ongoing impacts from site churn linked to renewed contracts with MTN Nigeria. This churn presents a challenge that slightly tempers the overall positive outlook.
Kuwait Disposal Impact
Year-over-year comparisons were affected by the Kuwait disposal, which added $13 million of revenue and $8 million of adjusted EBITDA in Q3 2024. This disposal has impacted the financial metrics, necessitating adjustments in comparative analysis.
Increase in Costs
The segment adjusted EBITDA margin in Nigeria was down by 230 basis points due to increases in the cost of sales, administrative expenses, and higher power generation costs. These increased costs pose a challenge to maintaining high profitability margins.
Forward-Looking Guidance
Looking ahead, IHS Holding Ltd. has raised its full-year 2025 outlook, projecting revenue between $1.72 to $1.75 billion, adjusted EBITDA between $995 million to $1.015 billion, and ALFCF in the range of $400 million to $420 million. The company anticipates strong macroeconomic conditions in key markets like Nigeria and Brazil to drive organic growth and profitability.
In summary, IHS Holding Ltd.’s earnings call conveyed a generally positive sentiment, with strong revenue growth, increased profitability, and successful deleveraging efforts. While challenges such as tenancy churn and increased costs were noted, the company’s strategic initiatives and favorable macroeconomic conditions in key markets provide a solid foundation for future growth.