The following is a summary of the IHS Holding Limited (IHS) Q3 2024 Earnings Call Transcript:
Financial Performance:
IHS reported robust revenue performance despite significant ForEx headwinds, particularly from the Naira devaluation, amounting to a $265 million headwind year-on-year.
Adjusted EBITDA increased by 3% year-over-year to $246 million, with a margin of 58.5%, demonstrating continued financial discipline and resilience of the financial model.
ALFCF for Q3 2024 grew slightly due to strong EBITDA performance and strategic CapEx optimization.Revised the full-year 2024 CapEx guidance downwards, reflecting ongoing efforts towards capital discipline and improved cash generation.
Business Progress:
IHS has extended all their tower contracts with MTN in Nigeria through 2032, significantly improving financial stability with projected contracted revenues of $12.3 billion, increasing the average tenant term to 8.1 years.
Continuing strategic asset reviews and cost optimization initiatives across the group, including new operational techniques like the integration of AI.
Initiatives underway to potentially raise $500 million to $1 billion mainly to reduce debt and potentially supporting share buybacks or introducing a dividend policy.
Opportunities:
Highlighted arrangements like the MTN Nigeria deal that enhance locked-in revenue streams and financial predictability over longer terms.
Focus on strategic asset reviews with the aim of unlocking shareholder value against suppressed valuations, including potential disposals aimed at enhancing financial health and optimizing the portfolio.
Risks:
Reported risks involve the ongoing economic vulnerabilities in their operating regions, particularly the significant ForEx volatility with the Naira in Nigeria affecting financial outcomes.
Leveraging challenges, with net leverage ratio standing at the higher end of the 3 to 4 times target range, reflecting underlying economic pressures and necessitating careful financial maneuvering.
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