IHS Towers (IHS), recognized as the world’s fourth-largest independent communications infrastructure provider, has reported a reduction in its losses for 2024, narrowing them to $1.64 billion compared to $1.98 billion in 2023. While this reduction indicates a slight improvement, the overall performance of the company remains concerning, as it marks the fourth consecutive year of substantial losses.
The company experienced a significant decline in revenue, which fell by 19.5% to $1.71 billion in 2024, down from $2.12 billion in the previous year. This revenue drop is primarily attributed to adverse currency fluctuations. However, on a more positive note, organic revenue saw a remarkable year-over-year increase of 48.1%. This growth can be linked to several factors, including foreign exchange resets, power indexation, escalations, and an increase in tenant revenue. Nigeria, which represents 63% of IHS Towers’ revenue, has posed particular challenges due to the depreciation of the naira, affecting dollar-denominated loans that support local operations.
Sam Darwish, Chairman and CEO of IHS Towers, stated, “We have de-risked our business by extending commercial contracts with key customers into the next decade, reducing our exposure to power prices, extending our debt maturities, and achieving some of our disposal targets.” He emphasized the company’s commitment to enhancing profitability and cash flow generation as they approach 2025, as reflected in their fiscal year 2025 guidance. Darwish also mentioned the potential for further selective asset disposals to strengthen the balance sheet and deliver increasing returns for stakeholders.
Since its listing on the New York Stock Exchange in 2021, IHS Towers has faced mounting pressure from investors due to ongoing losses, resulting in a substantial decline in market value, which has dropped by $6 billion. To address the challenges posed by currency and power costs, the company has renegotiated contracts with major clients, including MTN Nigeria. These renegotiations have incorporated fees in both USD and local currency, as well as adjustments for diesel costs. Additionally, IHS Towers divested a 70% stake in IHS Kuwait Limited to Zain Group for $230 million.
Looking ahead, the company aims to achieve $1.7 billion in revenue for 2025, relying on potential tariff increases from telecommunications companies, debt renegotiations to local currency, and enhanced cost efficiency. Despite the macroeconomic challenges, Nigeria continues to be the largest revenue contributor for IHS Group, generating $258 million in quarterly revenue, significantly surpassing other regions such as Sub-Saharan Africa (SSA), Latin America, and the Middle East and North Africa (MENA).
However, concerns linger for Africa’s largest telecom tower company, as its liabilities now exceed its assets. Total assets decreased to $4.2 billion in 2024, down from $5.3 billion in 2023, while total liabilities were reported at $4.5 billion in 2024, a decrease from $5 billion in the previous year. Additionally, cash reserves have dwindled to $775.9 million, down from $902.9 million in 2023, reflecting a decline in operating income.
