IHS Towers Reports Strong Q2 2023 Financial Results Despite Increased Losses

IHS Towers, a leading telecommunications infrastructure company, has announced its financial results for the second quarter of 2023. Despite a significant increase in revenue, the company also reported a substantial loss compared to the same period in the previous year.
IHS TowersIHS Towers reported a total revenue of $546.2 million for the second quarter of 2023, marking a notable 16.8 percent increase from the $467.7 million achieved during the same quarter in 2022. The revenue growth was driven by gains across all its operating segments. The Nigeria segment experienced a substantial boost, with revenue increasing by $43.5 million or 13.5 percent, reaching $364.6 million. Similarly, the SSA (Sub-Saharan Africa) segment witnessed impressive growth, reporting a revenue increase of $28.5 million or 30.0 percent to reach $123.4 million. The Latam (Latin America) and MENA (Middle East and North Africa) segments also contributed to the positive trend, with revenue increases of $5.6 million (13.0 percent) and $1.0 million (11.3 percent) respectively.

However, despite the revenue growth, IHS Towers reported a significant loss of $1,248.3 million for the second quarter of 2023, compared to a loss of $178.6 million in the same period of 2022. This substantial increase in losses was attributed to a surge in net finance costs, particularly due to unrealized foreign exchange losses tied to the financing of the company’s operations.

Capital expenditure (Capex) during the second quarter of 2023 amounted to $207.0 million, marking a notable increase from $146.8 million in the same quarter of the previous year. This increase was mainly driven by higher capital expenditure in the Nigeria and Latam segments, with Nigeria seeing an uptick of $52.0 million, primarily due to the “Project Green” initiative and other investments. The Latam segment experienced a $16.0 million increase in capital expenditure, supported by investments in new sites and fiber business expansion. Notably, the SSA segment reported a decrease in capital expenditure by $8.3 million.

Despite the increased losses, IHS Towers remains optimistic about its position in the market. Sam Darwish, the Chairman and Chief Executive Officer of IHS Towers, expressed confidence in the company’s ability to capitalize on the ongoing strong growth trends across its markets. He emphasized the company’s strategic positioning to leverage these secular growth trends for years to come.

As part of its forward-looking outlook, IHS Towers has revised its 2023 guidance. The company now expects revenue to fall within the range of $2,080 million to $2,110 million, Adjusted EBITDA between $1,130 million and $1,150 million, and RLFCF (Recurring Lease Financing Cash Flow) in the range of $385 million to $405 million. The revised revenue guidance includes a foreign exchange impact of $141 million. The company’s total Capex guidance and net leverage ratio target remain unchanged at $610 million to $650 million and 3.0x to 4.0x respectively.

As IHS Towers navigates the evolving telecommunications landscape, its second-quarter performance highlights its resilience in the face of challenges, while positioning itself for continued growth in the future.