CONSOLIDATED HIGHLIGHTS – THIRD QUARTER 2024
- Revenue of $420.3 million declined 3.5% compared to the second
quarter of 2024 with continued growth in revenue from Colocation,
Lease Amendments and New Sites partially offsetting the initial
impact of the new financial terms in the renewed and extended
contracts with MTN Nigeria signed during this quarter. Revenue
decreased by 10.0% (or increased by 49.0% organically)
year-on-year, with foreign exchange (“FX”) resets and escalations,
captured within organic growth, helping to mitigate the impact of
the 52.0% devaluation of the Nigerian Naira (“NGN”)
- Adjusted EBITDA of $246.0 million (58.5% Adjusted EBITDA
Margin) increased 3.3% year-on-year, reflecting continued cost
control
- Loss for the period was $205.7 million of which $236.0 million
relates to unrealized FX losses
- Cash from operations was $182.4 million
- Adjusted Levered Free Cash Flow (“ALFCF”) was $87.1
million
- Total Capex was $66.5 million
- Reiterating 2024 guidance for Revenue of $1,670-1,700 million,
Adjusted EBITDA of $900-920 million, ALFCF guidance of $250-270
million, with net leverage ratio target remaining 3.0x-4.0x.
Reducing Capital expenditure (“Total Capex”) guidance to $270-300
million (from $330-370 million) driven by further capex
savings
IHS Holding Limited (NYSE: IHS) (“IHS Towers” or the “Company”),
one of the largest independent owners, operators, and developers of
shared communications infrastructure in the world by tower count,
today reported financial results for the third quarter ended
September 30, 2024.
Sam Darwish, IHS Towers Chairman and Chief Executive Officer,
stated, “We’re reporting another solid performance across our key
metrics in the third quarter, driven by healthy secular demand and
the quality of our contract structures. This led to a robust
Revenue performance despite significant FX headwinds, and the
initial impact of the new financial terms in the renewed and
extended contracts with MTN Nigeria signed during the quarter. Our
strong third quarter Adjusted EBITDA, reaching an Adjusted EBITDA
margin of 58.5%, highlights the resilience of our financial model
and our continued financial discipline. We are also pleased with
our ALFCF generation during the third quarter, driven by ongoing
capex optimization, demonstrating our focus on increased cash
generation. Based on our year to date capital allocation decisions,
and our expectation of making further capex savings, we are
revising our full year 2024 capex guidance range down to $270
million - $300 million. Given our performance year to date we also
remain confident on achieving our current 2024 Revenue, Adjusted
EBITDA and ALFCF guidance, and are trending towards the upper end
of our existing ranges. Our guidance reflects updated currency
assumptions, which resulted in a positive impact on our Nigeria
revenues, partially offset by a negative impact on our Brazil,
Zambia, Côte d’Ivoire and Cameroon revenues.
We’ve made further significant commercial progress during 2024
including within this third quarter, having recently renewed and
extended all our MTN tower MLAs and extended our Airtel Nigeria
MLA. These renewed or extended contracts with Key Customers cover
approximately 72% of our Revenue. We have lengthened our average
Tenant term to 8.1 years, increased our Contracted Revenues to
$12.3 billion, and ensured that we have no material renewals with
our largest customer, MTN, until the end of 2032. During the third
quarter specifically, we reached the significant commercial
milestone of renewing and extending all our tower contracts with
MTN Nigeria through 2032, covering nearly 13,500 tenancies and
approximately 23,800 Lease Amendments, including 1,430 of the
approximately 2,500 tenancies that were due to expire in 2024 and
2025, but will now remain with IHS Nigeria. This agreement draws a
line under a series of customer renewals.
We’ve also made significant progress on the balance sheet
strategy as we have extended our maturity profile and shifted more
of our debt into local currency, through our new approximately $439
million dual-tranche term loan, entered into recently in October
2024, proceeds of which were used to refinance our existing $430
million term loan that was due to mature in October 2025.
In Nigeria, we have seen reduced volatility of the Naira during
the quarter compared to earlier in the year, although devaluation
against the USD still remains. Importantly, we continue to see USD
availability, allowing us to source and upstream U.S. dollars to
Group, with $155 million upstreamed year to date as of November 8,
2024. The average FX rate for the U.S. dollar to the Naira was
1,601 during the third quarter, compared to an average FX rate of
1,392 during 2Q24, equating to a $36 million revenue headwind
quarter-on-quarter. This, compared to a more sizeable devaluation
year-on-year, with the average rate for the U.S. dollar to the
Naira of 768 a year ago, leading to a $265 million revenue headwind
year-on-year. Our FX resets, however, helped to ensure our reported
revenues only declined 10% year-on year, and an Adjusted EBITDA
which grew 3% over the same period.
As already highlighted, during the quarter we have continued to
deliver on numerous elements of our strategic review. Our third
quarter performance shows continued progress towards our goal of
increasing Adjusted EBITDA and substantially reducing our capex to
increase cash flow generation. The MTN Nigeria contract renewal
& extension finalizes the larger MLA renewals work. Our balance
sheet continues to improve with extended maturity and more local
currency debt. In terms of assets review, we continue to examine
our portfolio of markets and reiterate our target to raise proceeds
of $500 million to $1 billion by May 2025. Finally, regarding
capital allocation, we continue to expect that proceeds from those
initiatives will be used primarily to pay down our debt; however,
we will also consider deploying excess proceeds through share
buybacks and / or introducing a dividend policy. To be clear, these
initial targets do not rule out further initiatives to increase
shareholder value, which we continue to assess in parallel.”
Full Year 2024 Outlook Guidance
The following full year 2024 guidance is based on a number of
assumptions that management believes to be reasonable and reflects
the Company’s expectations as of November 12, 2024. Actual results
may differ materially from these estimates as a result of various
factors, and the Company refers you to the cautionary language
regarding “forward-looking” statements included in this press
release when considering this information. The Company’s revised
outlook includes the impact from the renewal and extension of all
tower contracts with MTN Nigeria.
The Company’s outlook is based on the following assumptions:
- Organic revenue Y/Y growth of approximately 48% (at the
mid-point)
- Average foreign currency exchange rates to 1.00 U.S. Dollar for
January 1, 2024, through December 31, 2024, for key currencies: (a)
1,500 Nigerian Naira; (b) 5.30 Brazilian Real (c) 0.92 Euros (d)
18.50 South African Rand
- Project Green capex of approximately $10.0 million
- Build-to-suit of ~850 sites of which ~600 sites in Brazil
- Net leverage ratio target of 3.0x-4.0x
Metric
Current Range
Previous Range
Revenue
$1,670M-1,700M
$1,670M-1,700M
Adjusted EBITDA (1)
$900M-920M
$900M-920M
Adjusted Levered Free Cash Flow (1)
$250M-270M
$250M-270M
Total Capex
$270M-300M
$330M-370M
(1) Adjusted EBITDA and ALFCF are non-IFRS
financial measures. See “Use of Non-IFRS financial measures” for
additional information and a reconciliation to the most comparable
IFRS measures. We are unable to provide a reconciliation of
Adjusted EBITDA and ALFCF to (loss)/income and cash from
operations, respectively, for the periods presented above without
an unreasonable effort, due to the uncertainty regarding, and the
potential variability, of these costs and expenses that may be
incurred in the future, including, in the case of Adjusted EBITDA,
share-based payment expense, finance costs, and insurance claims,
and in the case of ALFCF, cash from operations, net movement in
working capital and maintenance capital expenditures, each of which
adjustments may have a significant impact on these non-IFRS
measures.
RESULTS FOR THE THIRD QUARTER
2024
The table below sets forth select
unaudited financial results for the quarters ended September 30,
2024, and September, 30, 2023:
Three months ended
September 30,
September 30,
Y on Y
2024
2023 (1)
Growth
$’000
$’000
%
Revenue
420,282
467,023
(10.0
)
Adjusted EBITDA(2)
245,975
238,102
3.3
Loss for the period
(205,703
)
(268,804
)
23.5
Cash from operations
182,431
229,913
(20.7
)
ALFCF(2)
87,109
85,759
1.6
(1) Revised to reflect an adjustment
related to the accounting treatment of foreign exchange on goods in
transit in Nigeria.
(2) Adjusted EBITDA and ALFCF are non-IFRS financial measures. See
“Use of Non-IFRS financial measures” for additional information,
definitions and a reconciliation to the most comparable IFRS
measures.
Impact of Nigerian Naira
devaluation
In mid-June 2023, the Central Bank of Nigeria implemented steps
to unify the Nigerian foreign exchange market by replacing the old
regime of multiple exchange rate segments into a single Investors
and Exporters (“I&E”) window within which foreign exchange
transactions would be determined by market forces and which was
subsequently renamed NAFEM (Nigerian Autonomous Foreign Exchange
Rate Fixing Market) in October 2023. The Group uses the USD/NGN
rate published by Bloomberg for Group reporting purposes.
As a result of the steps taken by the Central Bank of Nigeria,
the Naira devalued between the period immediately prior to the
announcement and the month end rate as of June 30, 2023. The Naira
continued to devalue in the second half of 2023 and in January
2024, there was a further significant devaluation. During the
second and third quarters of 2024, the Naira has continued to
devalue but at a significantly slower rate as compared to the first
quarter of 2024.
The table below summarizes the closing and average rates per
period and related movements.
Closing Rate
Closing Rate Movement
(1)
Average Rate
Average Rate Movement
(1)
₦:$
$:₦
₦:$
$:₦
14 June 2023
472.3
—
—
—
30 June 2023
752.7
(37.3
)%
508.0
—
30 September 2023
775.6
(2.9
)%
767.7
(33.8
)%
31 December 2023
911.7
(14.9
)%
815.0
(5.8
)%
31 March 2024
1,393.5
(34.6
)%
1,315.9
(38.1
)%
30 June 2024
1,514.3
(8.0
)%
1,391.8
(5.4
)%
30 September 2024
1,669.1
(9.3
)%
1,601.0
(13.1
)%
(1) Movements presented for each period
are between that period’s rate and the preceding period rate and
are calculated as a percentage of the period’s rate.
Due to the Naira devaluation, Revenue and segment Adjusted
EBITDA were negatively impacted by $264.7 million and $172.4
million, respectively, in the third quarter of 2024, based on the
average rate used in that quarter compared to the third quarter of
2023 average rate. At the same time, there were contract resets
that partially offset the negative foreign exchange impact on
Revenue and segment Adjusted EBITDA. In addition, the Naira
devaluation resulted in an impact on finance costs, specifically
related to net unrealized foreign exchange losses on financing of
$232.1 million in our Nigeria segment in the third quarter of 2024.
This is due to the USD denominated internal shareholder loans from
Group entities to Nigeria and USD denominated third party debt. As
the functional currency of the Nigeria businesses is NGN, these USD
balances have been revalued in NGN using the rate as of September
30, 2024, resulting in an increase in unrealized loss on foreign
exchange.
Results for the three months ended September 30, 2024 versus
2023
Revenue
Revenue for the three month period ended September 30, 2024
(“third quarter”) of $420.3 million declined 10.0% year-on-year.
Organic revenue(1) increased by $229.0 million year-on-year during
the third quarter, or 49.0%, driven primarily by foreign exchange
resets and escalations in addition to continued growth in Tenants,
Lease Amendments and New Sites. This growth was partially offset by
the initial impact of the new financial terms in the renewed and
extended contracts with MTN Nigeria, signed during the third
quarter. Aggregate inorganic revenue growth was $0.1 million, which
primarily related to the sixth stage of the Kuwait Acquisition. The
increase in organic revenue was more than offset by the non-core
impact of negative movements in foreign exchange rates of $275.9
million, or 59.1%, of which $264.7 million was due to the
devaluation of the NGN.
Refer to the revenue component of the segment results section of
this discussion and analysis for further details.
For the third quarter, the net increase in Towers was 911
year-on-year, resulting in total Towers of 40,650 at the end of the
period, and primarily resulted from the addition of 1,346 New Sites
(including 210 reintegrated towers in 3Q24 from our smallest Key
Customer in Nigeria), partially offset by 350 Churned, 59 net
divestiture from Latam and 26 decommissioned. We added 1,119 net
new Tenants year-on-year (including 529 Churned Tenants in 3Q24
from our smallest Key Customer in Nigeria on which we were not
recognizing revenue), resulting in total Tenants of 60,315 and a
Colocation Rate of 1.48x at the end of the third quarter.
Year-on-year, we added 4,135 Lease Amendments, driven primarily by
5G and fiber upgrades, resulting in total Lease Amendments of
39,389 at the end of the third quarter.
(1) Refer to “Item 2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations” for the definition
of organic revenue and additional information.
Adjusted EBITDA
Adjusted EBITDA for the third quarter was $246.0 million,
reaching an Adjusted EBITDA margin of 58.5%. Adjusted EBITDA
increased 3.3% year-on-year in the third quarter reflecting the
decrease in revenue discussed above, more than offset by a decrease
in cost of sales. The reduction in cost of sales was primarily
driven by a decrease in regulatory fees of $12.1 million, primarily
relating to a review of the current and historical license
obligations in the SSA segment, and a decrease in tower repairs and
maintenance costs, power generation costs, security services costs,
and staff costs of $7.4 million, $5.5 million, $4.4 million, and
$1.5 million respectively. The $11.1 million reduction in other
cost of sales primarily relates to FX losses on goods in transit in
Nigeria during the third quarter of 2023.
Loss for the period
Loss for the period in the third quarter of 2024 was $205.7
million, compared to a loss of $268.8 million for the third quarter
of 2023. This equates to a reduction of loss of $63.1 million
year-on-year, which was primarily due to a reduction in impairment
of property, plant and equipment, intangible assets excluding
goodwill and related prepaid land rent of $99.3 million primarily
driven by power equipment assets in our SSA segment being
classified as assets held for sale and remeasured at fair value
less cost to sell in the third quarter of 2023, coupled with an
increase in the net gain on the fair value of embedded options of
$24.3 million which is driven by the increase in the market value
of the Existing 2027 Senior Notes which increased the value of the
embedded call options within these notes. This was partially offset
by higher finance costs of $79.2 million driven by an increase in
the unrealized net foreign exchange losses arising from financing
as a result of the devaluation of the NGN, as well as a decrease in
revenue as discussed above.
Cash from operations
Cash from operations for the third quarter of 2024 was $182.4
million, compared to $229.9 million for the third quarter of 2023.
The decrease reflects an increased outflow in working capital of
$50.6 million (inclusive of a withholding tax receivable increase
of $20.2 million), partially offset by an increase in operating
income of $3.1 million.
ALFCF
ALFCF for the third quarter of 2024 was $87.1 million, compared
to $85.8 million for the third quarter of 2023. The increase in
ALFCF was primarily due to the increase in Adjusted EBITDA of $7.9
million and reduction in revenue withholding tax of $3.0 million,
partially offset by an increase in net interest paid of $8.6
million.
SEGMENT RESULTS
Revenue and Adjusted EBITDA by
segment
Revenue and segment Adjusted EBITDA, our key profitability
measures used to assess the performance of our reportable segments,
were as follows:
Revenue
Adjusted EBITDA
Three months ended
Three months ended
September 30,
September 30,
September 30,
September 30,
2024
2023
Change
2024
2023(1)
Change
$'000
$'000
%
$'000
$'000
%
Nigeria
242,290
271,394
(10.7
)
158,900
164,152
(3.2
)
SSA
120,139
133,481
(10.0
)
81,046
66,285
22.3
Latam
45,148
51,883
(13.0
)
33,798
38,163
(11.4
)
MENA
12,705
10,265
23.8
8,014
5,155
55.5
Unallocated corporate expenses(2)
—
—
—
(35,783
)
(35,653
)
(0.4
)
Total
420,282
467,023
(10.0
)
245,975
238,102
3.3
(1) Revised to reflect an adjustment
related to the accounting treatment of foreign exchange on goods in
transit in Nigeria.
(2) Unallocated corporate expenses primarily consist of costs
associated with centralized Group functions including Group
executive, legal, finance, tax and treasury services.
Nigeria
Third quarter revenue decreased 10.7% year-on-year to $242.3
million. Organic revenue increased by $235.6 million, or 86.8%,
driven primarily by foreign exchange resets and diesel prices, as
well as continued growth in revenue from Colocation and Lease
Amendments, partially offset by a reduction in revenues related to
the new financial terms in the renewed contracts with MTN Nigeria,
signed during the third quarter of 2024. The reported decrease in
revenue was primarily driven by the impact of negative movements in
foreign exchange rates with an average Naira rate of ₦1,601 to
$1.00 in the third quarter of 2024 compared to the average rate of
₦768 to $1.00 in the third quarter of 2023. This led to a non-core
decline of $264.7 million, or 97.5% year-on-year, a smaller decline
compared to that which we reported during the second quarter of
2024 given the third quarter of 2023 was a period impacted by the
significant devaluation of June 2023 but yet to benefit from our
contracts resetting in the fourth quarter of 2023.
During the third quarter, Tenants decreased by 279 year-on-year,
with growth of 535 from Colocation and 96 from New Sites, more than
offset by 910 Churned (which includes, for the third quarter of
2024, 529 Tenants occupied by our smallest Key Customer on which we
were not recognizing revenue), while Lease Amendments increased by
1,601 primarily due to 3G, 5G and fiber upgrades.
Segment Adjusted EBITDA for the third quarter declined 3.2%
year-on-year to $158.9 million, for a margin of 65.6%. The
year-on-year decline in segment Adjusted EBITDA for the third
quarter primarily reflects the decrease in revenue discussed above,
partially offset by a reduction in cost of sales, despite a
year-on-year increase in the cost of diesel in the third quarter of
$4.9 million. The reduction in cost of sales was primarily driven
by a decrease in tower repairs and maintenance costs of $4.4
million and security services costs ($2.0 million), due to the
movements in foreign exchange rates discussed above. The decrease
was also driven by a reduction in the USD equivalent amounts of
regulatory fees ($1.6 million) and staff costs ($1.2 million).
These are solely due to the Naira devaluation discussed above, even
though the underlying local costs increased during the period. The
$9.6 million reduction in other cost of sales, respectively,
primarily relates to the foreign exchange losses on goods in
transit in Nigeria during the third quarter.
SSA
Third quarter revenue decreased 10.0% year-on-year to $120.1
million, primarily driven by movements in organic revenue, which
decreased by $8.3 million, or 6.2%, due to factors including lower
power pass through revenues being recognized after the changes in
our agreements with MTN South Africa on the power managed services
business. These changes to power pass through revenue have no
impact on Adjusted EBITDA. Other factors impacting organic revenue
include growth in Tenants, New Sites and Lease Amendments, together
with escalations and foreign exchange resets. The overall decrease
in revenue in the third quarter was also impacted by the non-core
impact of negative movements in foreign exchange rates of $5.0
million, or 3.8%.
During the third quarter, Tenants increased by 729 year-on-year,
including 664 from Colocation, 144 from New Sites and 79 from
Churn, while Lease Amendments increased by 2,061.
Segment Adjusted EBITDA for the third quarter grew 22.3%
year-on-year to $81.0 million, for a margin of 67.5%. The
year-on-year increase in segment Adjusted EBITDA for the third
quarter primarily reflects a decrease in cost of sales of $26.7
million, driven by reduced regulatory fees ($10.5 million)
primarily relating to a review of the current and historical
license obligations, and reduced tower repairs, maintenance costs
security services costs and power generation costs of $3.0 million,
$2.9 million and $9.5 million respectively, primarily due to the
changes in our agreements with MTN South Africa discussed above.
The impact on our third quarter cost of sales from these changes
with MTN South Africa was reduced compared to the impact in the
second quarter of 2024, driven by the one-off adjustments captured
in the second quarter of 2024 relating to previous periods. This
was partially offset by the decrease in revenue during the
period.
Latam
Third quarter revenue decreased 13.0% year-on-year to $45.1
million and was primarily driven by the non-core impact of negative
movements in foreign exchange rates of $6.2 million, or 11.9%.
Organic revenue declined 0.6% in the quarter, or $0.3 million,
driven by a reduction in revenues from our customer Oi S.A. (“Oi”)
in Brazil as a result of their judicial recovery proceedings,
partially offset by continued growth in Tenants, Lease Amendments
and New Sites.
During the third quarter, Tenants increased by 657 year-on-year,
including 793 from New Sites and 236 from Colocation, partially
offset by 311 Churned and net divestiture of 61, primarily due to
the disposal of Peru, while Lease Amendments increased by 201.
Third quarter segment Adjusted EBITDA declined 11.4% to $33.8
million and primarily reflects the decrease in revenue discussed
above, as well as an increase in security services costs of $0.4
million, partially offset by a reduction in power generation costs
and site rental costs of $0.4 million and $0.3 million,
respectively.
MENA
Third quarter revenue increased 23.8% year-on-year to $12.7
million driven primarily by New Sites, Lease Amendments and
escalations. Revenues grew inorganically in the period by $0.4
million, or 3.6%, driven primarily by the sixth stage of the Kuwait
Acquisition, completed in August 2023.
During the third quarter, Tenants increased by 12 year-on-year,
including 21 from New Sites, partially offset by 9 Churned, while
Lease Amendments increased by 272.
Segment Adjusted EBITDA was $8.0 million for the third quarter,
an increase of 55.5% year-on-year. The increase in segment Adjusted
EBITDA primarily reflects the increase in revenue discussed
above.
CAPITAL EXPENDITURE
For each of our reportable segments, below
is the capital expenditure for the three month periods ended
September 30, 2024 and 2023:
Three months ended
September 30,
September 30,
Y on Y
2024
2023 (1)
Growth
$’000
$’000
%
Nigeria
(21,358
)
(30,778
)
(30.6
)
SSA
(11,307
)
(11,318
)
(0.1
)
Latam
(31,793
)
(56,999
)
(44.2
)
MENA
(771
)
(1,244
)
(38.0
)
Other
(1,231
)
(542
)
127.1
Total capital expenditure
(66,460
)
(100,881
)
(34.1
)
(1) Revised to reflect an adjustment related to the
accounting treatment of foreign exchange on goods in transit in
Nigeria.
During the third quarter of 2024, capital expenditure (“Total
Capex”) was $66.5 million, compared to $100.9 million for the third
quarter of 2023. The decrease is driven by lower capital
expenditure across our four reportable segments reflecting the
actions we are taking to improve cash generation and to narrow our
focus to projects that we expect will deliver the highest
returns.
Nigeria
The 30.6% year-on-year decrease for the third quarter was
primarily driven by decreases of $6.0 million related to Project
Green capital expenditure given the investment planned for this
project is now largely complete, $5.2 million related to fiber
business capital expenditure and $2.2 million related to
augmentation capital expenditure, partially offset by a $2.2
million increase related to maintenance capital expenditure.
SSA
The 0.1% year-on-year decrease for the third quarter was
primarily driven by decreases of $1.5 million in maintenance
capital expenditure and $1.1 million in refurbishment capital
expenditure, offset by a $2.0 million increase in augmentation
capital expenditure.
Latam
The 44.2% year-on-year decrease for the third quarter was
primarily driven by decreases related to New Sites capital
expenditure ($13.5 million), fiber business capital expenditure
($10.4 million), corporate capital expenditure ($2.4 million) and
purchase of land for new or existing sites ($1.5 million).
MENA
The 38.0% year-on-year decrease for the third quarter was
primarily due to a decrease in New Sites capital expenditure ($0.6
million) and maintenance capital expenditure ($0.2 million),
partially offset by an increase in other capital expenditure ($0.2
million) and refurbishment capital expenditure ($0.2 million).
FINANCING ACTIVITIES DURING THE THREE MONTHS ENDED SEPTEMBER
30, 2024
Nigeria (2023) Term Loan and Nigeria (2023) Revolving Credit
Facility
In August 2024, the cap of 24%, to which the floating interest
rates per annum were subject in the NGN 165.0 billion
(approximately $98.9 million) loan and the NGN 55.0 billion
(approximately $33.0 million) facility, both entered into in
January 2023, was amended to 27%.
FINANCING ACTIVITIES AFTER THE REPORTING PERIOD ENDED
SEPTEMBER 30, 2024
IHS Holding (2024) dual-tranche Bullet Term Loan
Facility
In October 2024, IHS Holding Limited entered into and drew down
on a dual-tranche $255.0 million and ZAR 3,246.0 million loan
agreement (together totaling approximately $438.6 million). This
syndicated facility is scheduled to terminate in October 2029. The
majority of the proceeds have been applied toward the repayment of
the IHS Holding (2022) Bullet Term Loan Facility. The applicable
interest rate on the dollar tranche is Term SOFR, plus a margin of
4.50% and on the ZAR tranche is JIBAR, plus a margin of 4.50%.
IHS Holding (2022) Bullet Term Loan Facility
In October 2024, the outstanding principal amount of $430.0
million under this facility was fully repaid with the proceeds from
the IHS Holding (2024) dual-tranche Bullet Term Loan Facility
described above.
OTHER ACTIVITIES AFTER REPORTING PERIOD
Nigeria withholding tax
On October 2, 2024, the Federal Government of Nigeria released
the official gazette of the “Deduction of Tax at Source
(Withholding) Regulations, 2024” setting out changes to the
withholding tax (“WHT”) regulations which impact the Group’s
Nigerian businesses. Effective from January 1, 2025, these changes
are expected to reduce the amounts of tax withheld by customers in
Nigeria with respect to colocation and telecommunication tower
services from 10% to 2%, which is anticipated to lead to an
increase in cash flow for IHS from 2025.
Nigerian WHT can be credited against corporation tax (“CIT”)
liabilities and is therefore initially recognized as an asset.
Historically, the WHT credits each quarter have exceeded the total
forecast CIT payable and the unutilized asset has been impaired.
Going forward, the Group will reassess the extent to which
previously impaired WHT credits can be recovered against future CIT
liabilities, taking account of the reduction in the WHT rate from
January 2025.
Conference Call
IHS Towers will host a conference call on November 12, 2024, at
8:30am ET to review its financial and operating results.
Supplemental materials will be available on the Company’s website,
www.ihstowers.com. The conference call can be accessed by calling
+1 646 307 1963 (U.S./Canada) or +44 20 3481 4247
(UK/International). The call ID is 5159017.
A simultaneous webcast and replay will be available in the
Investor Relations section of the Company’s website,
www.ihstowers.com, on the Earnings Materials page.
Upcoming Conferences and Events
IHS Towers management is expected to participate in the upcoming
conferences outlined below, dates noted are subject to change.
Visit www.ihstowers.com/investors/investor-presentations-events for
additional conferences information.
- UBS Global Media and Communications Conference (New York) -
December 9, 2024
About IHS Towers
IHS Towers is one of the largest independent owners, operators
and developers of shared communications infrastructure in the world
by tower count and is one of the largest independent multinational
towercos solely focused on emerging markets. The Company has over
40,000 towers across its 10 markets, including Brazil, Cameroon,
Colombia, Côte d’Ivoire, Egypt, Kuwait, Nigeria, Rwanda, South
Africa and Zambia. For more information, please email: communications@ihstowers.com or visit:
www.ihstowers.com.
For more information about the Company and our financial and
operating results, please also refer to the 3Q24 Supplemental
Information deck posted to our Investors Relations website at
www.ihstowers.com/investors.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains forward-looking statements. We
intend such forward-looking statements to be covered by relevant
safe harbor provisions for forward-looking statements (or their
equivalent) of any applicable jurisdiction, including those
contained in Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). All statements other
than statements of historical facts contained in this press release
may be forward-looking statements. In some cases, you can identify
forward-looking statements by terms such as “may,” “will,”
“should,” “expects,” “plans,” “anticipates,” “could,” “intends,”
“targets,” “projects,” “contemplates,” “believes,” “estimates,”
“forecast,” “predicts,” “potential” or “continue” or the negative
of these terms or other similar expressions. Forward-looking
statements contained in this press release include, but are not
limited to statements regarding our future results of operations
and financial position, future organic growth, anticipated results
for the fiscal year 2024, industry and business trends, business
strategy, plans (including our strategic review and related
productivity enhancements and cost reductions, as well as our
ability to refinance or meet our debt obligations), market growth,
position and our objectives for future operations, including our
ability to maintain relationships with customers and continue to
renew customer lease agreements or the potential benefit of the
terms of such renewals or our ability to grow our business through
acquisitions, the impact (illustrative or otherwise) of the new
agreements with MTN Nigeria (including certain rebased fee
components) on our financial results, the impact of currency and
exchange rate fluctuations (including the devaluation of the Naira)
and other economic and geopolitical factors on our future results
and operations, the outcome and potential benefit of our strategic
review, our objectives for future operations and our participation
in upcoming presentations and events.
We have based these forward-looking statements largely on our
current expectations and projections about future events and
financial trends that we believe may affect our business, financial
condition and results of operations. Forward-looking statements
involve known and unknown risks, uncertainties and other important
factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements, including, but not limited to:
- non-performance under or termination, non-renewal or material
modification of our customer agreements;
- volatility in terms of timing for settlement of invoices or our
inability to collect amounts due under invoices;
- a reduction in the creditworthiness and financial strength of
our customers;
- the business, legal and political risks in the countries in
which we operate;
- general macroeconomic conditions in the countries in which we
operate;
- changes to existing or new tax laws, rates or fees;
- foreign exchange risks, particularly in relation to the
Nigerian Naira, and/or ability to hedge against such risks in our
commercial agreements or to access U.S. Dollars in our
markets;
- the effect of regional or global health pandemics, geopolitical
conflicts and wars, and acts of terrorism;
- our inability to successfully execute our business strategy and
operating plans, including our ability to increase the number of
Colocations and Lease Amendments on our Towers and construct New
Sites or develop business related to adjacent telecommunications
verticals (including, for example, relating to our fiber businesses
in Latin America and elsewhere) or deliver on our sustainability or
environmental, social and governance (ESG) strategy and initiatives
under anticipated costs, timelines, and complexity, such as our
Carbon Reduction Roadmap (and Project Green), including plans to
reduce diesel consumption, integrate solar panel and battery
storage solutions on tower sites and connect more sites to the
electricity grid;
- our reliance on third-party contractors or suppliers, including
failure, underperformance or inability to provide products or
services to us (in a timely manner or at all) due to sanctions
regulations, supply chain issues or for other reasons;
- our estimates and assumptions and estimated operating results
may differ materially from actual results;
- increases in operating expenses, including increased costs for
diesel;
- failure to renew or extend our ground leases, or protect our
rights to access and operate our Towers or other telecommunications
infrastructure assets;
- loss of customers;
- risks related to our indebtedness;
- changes to the network deployment plans of mobile operators in
the countries in which we operate;
- a reduction in demand for our services;
- the introduction of new technology reducing the need for tower
infrastructure and/or adjacent telecommunication verticals;
- an increase in competition in the telecommunications tower
infrastructure industry and/or adjacent telecommunication
verticals;
- our failure to integrate recent or future acquisitions;
- the identification by management of material weaknesses in our
internal control over financial reporting, which could affect our
ability to produce accurate financial statements on a timely basis
or cause us to fail to meet our future reporting obligations;
- increased costs, harm to reputation, or other adverse impacts
related to increased intention to and evolving expectations for
environmental, social and governance initiatives;
- our reliance on our senior management team and/or key
employees;
- failure to obtain required approvals and licenses for some of
our sites or businesses or comply with applicable regulations;
- inability to raise financing to fund future growth
opportunities or operating expense reduction strategies;
- environmental liability;
- inadequate insurance coverage, property loss and unforeseen
business interruption;
- compliance with or violations (or alleged violations) of laws,
regulations and sanctions, including but not limited to those
relating to telecommunications regulatory systems, tax, labor,
employment (including new minimum wage regulations), unions, health
and safety, antitrust and competition, environmental protection,
consumer protection, data privacy and protection, import/export,
foreign exchange or currency, and of anti-bribery, anti-corruption
and/or money laundering laws, sanctions and regulations;
- fluctuations in global prices for diesel or other
materials;
- disruptions in our supply of diesel or other materials;
- legal and arbitration proceedings;
- our reliance on shareholder support (including to invest in
growth opportunities) and related party transaction risks;
- risks related to the markets in which we operate, including but
not limited to local community opposition to some of our sites or
infrastructure, and the risks from our investments into emerging
and other less developed markets;
- injury, illness or death of employees, contractors or third
parties arising from health and safety incidents;
- loss or damage of assets due to security issues or civil
commotion;
- loss or damage resulting from attacks on any information
technology system or software;
- loss or damage of assets due to extreme weather events whether
or not due to climate change;
- failure to meet the requirements of accurate and timely
financial reporting and/or meet the standards of internal control
over financial reporting that support a clean certification under
the Sarbanes Oxley Act;
- risks related to our status as a foreign private issuer;
and
- the important factors discussed in the section titled “Risk
Factors” in our Annual Report on Form 20-F for the fiscal year
ended December 31, 2023.
The forward-looking statements in this press release are based
upon information available to us as of the date of this press
release, and while we believe such information forms a reasonable
basis for such statements, such information may be limited or
incomplete, and our statements should not be read to indicate that
we have conducted an exhaustive inquiry into, or review of, all
potentially available relevant information. These statements are
inherently uncertain and investors are cautioned not to unduly rely
upon these statements. You should read this press release and the
documents that we reference in this press release with the
understanding that our actual future results, performance and
achievements may be materially different from what we expect. We
qualify all of our forward-looking statements by these cautionary
statements. Additionally, we may provide information herein that is
not necessarily “material” under the federal securities laws for
SEC reporting purposes, but that is informed by various ESG
standards and frameworks (including standards for the measurement
of underlying data), and the interests of various stakeholders.
Much of this information is subject to assumptions, estimates or
third-party information that is still evolving and subject to
change. For example, we note that standards and expectations
regarding greenhouse gas (GHG) accounting and the processes for
measuring and counting GHG emissions and GHG emissions reductions
are evolving, and it is possible that our approaches both to
measuring our emissions and any reductions may be at some point,
either currently or in future, considered by certain parties to not
be in keeping with best practices. In addition, our disclosures
based on any standards may change due to revisions in framework
requirements, availability of information, changes in our business
or applicable government policies, or other factors, some of which
may be beyond our control. These forward-looking statements speak
only as of the date of this press release. Except as required by
applicable law, we do not assume, and expressly disclaim, any
obligation to publicly update or revise any forward-looking
statements contained in this press release, whether as a result of
any new information, future events or otherwise. Additionally,
references to our website and other documents contained in this
press release are provided for convenience only, and their content
is not incorporated by reference into this press release.
CONDENSED CONSOLIDATED STATEMENT OF
LOSS AND OTHER COMPREHENSIVE INCOME (UNAUDITED)
FOR THE THREE MONTHS AND NINE MONTHS
ENDED SEPTEMBER 30, 2024, AND 2023
Three months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2024
2023
2024
2023
$’000
$’000
$’000
$’000
Revenue
420,282
467,023
1,273,403
1,615,755
Cost of sales*
(201,745
)
(358,883
)
(662,745
)
(962,628
)
Administrative expenses
(97,099
)
(93,835
)
(347,558
)
(291,877
)
Net reversal of loss allowance/(net loss
allowance) on trade receivables
4,286
(711
)
2,107
(5,225
)
Other income
63
33
1,656
369
Operating income
125,787
13,627
266,863
356,394
Finance income
25,732
5,823
49,696
18,233
Finance costs*
(350,825
)
(271,595
)
(2,163,157
)
(1,816,864
)
Loss before income tax*
(199,306
)
(252,145
)
(1,846,598
)
(1,442,237
)
Income tax expense
(6,397
)
(16,659
)
(40,669
)
(89,118
)
Loss for the period*
(205,703
)
(268,804
)
(1,887,267
)
(1,531,355
)
Loss attributable to:
Owners of the Company*
(204,143
)
(266,830
)
(1,878,540
)
(1,523,021
)
Non‑controlling interests
(1,560
)
(1,974
)
(8,727
)
(8,334
)
Loss for the period
(205,703
)
(268,804
)
(1,887,267
)
(1,531,355
)
Loss per share ($) - basic*
(0.61
)
(0.80
)
(5.64
)
(4.57
)
Loss per share ($) - diluted*
(0.61
)
(0.80
)
(5.64
)
(4.57
)
Other comprehensive income:
Items that may be reclassified to income
or loss
Exchange differences on translation of
foreign operations*
227,539
5,346
1,264,063
634,802
Other comprehensive income for the
period, net of taxes*
227,539
5,346
1,264,063
634,802
Total comprehensive income/(loss) for
the period*
21,836
(263,458
)
(623,204
)
(896,553
)
Total comprehensive income/(loss)
attributable to:
Owners of the Company*
18,051
(254,269
)
(592,175
)
(896,612
)
Non‑controlling interests
3,785
(9,189
)
(31,029
)
59
Total comprehensive income/(loss) for
the period*
21,836
(263,458
)
(623,204
)
(896,553
)
*Revised comparative periods to reflect an
adjustment related to the accounting treatment of foreign exchange
on goods in transit in Nigeria.
CONDENSED CONSOLIDATED STATEMENT OF
FINANCIAL POSITION (UNAUDITED)
AT SEPTEMBER 30, 2024, AND DECEMBER 31,
2023
September 30,
December 31,
2024
2023
$’000
$’000
Non‑current assets
Property, plant and equipment
1,436,945
1,740,235
Right of use assets
807,033
886,909
Goodwill
441,971
619,298
Other intangible assets
809,667
933,030
Deferred income tax assets
64,508
63,786
Derivative financial instrument assets
31,170
1,540
Trade and other receivables
127,198
147,305
3,718,492
4,392,103
Current assets
Inventories
31,874
40,589
Income tax receivable
1,992
3,755
Derivative financial instrument assets
157
565
Trade and other receivables
421,218
607,835
Cash and cash equivalents
397,499
293,823
Assets held for sale
—
26,040
852,740
972,607
TOTAL ASSETS
4,571,232
5,364,710
Non‑current liabilities
Trade and other payables
5,153
4,629
Borrowings
3,354,762
3,056,696
Lease liabilities
513,484
510,838
Provisions for other liabilities and
charges
95,447
86,131
Deferred income tax liabilities
127,923
137,106
4,096,769
3,795,400
Current liabilities
Trade and other payables
400,929
532,627
Provisions for other liabilities and
charges
160
277
Derivative financial instrument
liabilities
10,537
68,133
Income tax payable
58,106
75,612
Borrowings
176,996
454,151
Lease liabilities
93,699
91,156
740,427
1,221,956
TOTAL LIABILITIES
4,837,196
5,017,356
Stated capital
5,399,635
5,394,812
Accumulated losses
(7,171,934
)
(5,293,394
)
Other reserves
1,299,858
8,430
Equity attributable to owners of the
Company
(472,441
)
109,848
Non‑controlling interest
206,477
237,506
TOTAL EQUITY
(265,964
)
347,354
TOTAL LIABILITIES AND EQUITY
5,364,710
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2024, AND 2023
Attributable to owners of the
Company
Non‑
Stated
Accumulated
Other
controlling
Total
capital
losses
reserves
Total
interest
equity
$’000
$’000
$’000
$’000
$’000
$’000
Balance at January 1, 2023
5,311,953
(3,317,652
)
(861,271
)
1,133,030
227,200
1,360,230
Shares repurchased and canceled through
buyback program
(10,022
)
—
—
(10,022
)
—
(10,022
)
NCI arising on business combination
—
—
—
—
1,922
1,922
Options converted to shares
89,432
—
(89,432
)
—
—
—
Share‑based payment expense
—
—
9,327
9,327
—
9,327
Other reclassifications related to
share-based payment
—
867
(1,426
)
(559
)
—
(559
)
Total transactions with owners
79,410
867
(81,531
)
(1,254
)
1,922
668
Loss for the period*
—
(1,523,021
)
—
(1,523,021
)
(8,334
)
(1,531,355
)
Other comprehensive income*
—
—
626,409
626,409
8,393
634,802
Total comprehensive (loss)/income*
—
(1,523,021
)
626,409
(896,612
)
59
(896,553
)
Balance at September 30, 2023*
5,391,363
(4,839,806
)
(316,393
)
235,164
229,181
464,345
Balance at January 1, 2024
5,394,812
(5,293,394
)
8,430
109,848
237,506
347,354
Options converted to shares
4,823
—
(4,823
)
—
—
—
Share‑based payment expense
—
—
9,886
9,886
—
9,886
Total transactions with owners
4,823
—
5,063
9,886
—
9,886
Loss for the period
—
(1,878,540
)
—
(1,878,540
)
(8,727
)
(1,887,267
)
Other comprehensive income/(loss)
—
—
1,286,365
1,286,365
(22,302
)
1,264,063
Total comprehensive (loss)/income
—
(1,878,540
)
1,286,365
(592,175
)
(31,029
)
(623,204
)
Balance at September 30, 2024
5,399,635
(7,171,934
)
1,299,858
(472,441
)
206,477
(265,964
)
*Revised to reflect an adjustment related
to the accounting treatment of foreign exchange on goods in transit
in Nigeria.
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS AND NINE MONTHS
ENDED SEPTEMBER 30, 2024, AND 2023
Three months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2024
2023
2024
2023
$’000
$’000
$’000
$’000
Cash flows from operating
activities
Cash from operations*
182,431
229,913
427,011
740,869
Income taxes paid
(6,575
)
(8,450
)
(35,091
)
(42,407
)
Payment for rent
(1,362
)
(1,204
)
(6,871
)
(4,147
)
Payment for tower and tower equipment
decommissioning
(27
)
(6
)
(52
)
(327
)
Net cash generated from operating
activities*
174,467
220,253
384,997
693,988
Cash flow from investing
activities
Purchase of property, plant and
equipment*
(52,175
)
(119,889
)
(173,709
)
(383,456
)
Payment in advance for property, plant and
equipment
(9,730
)
(18,772
)
(15,581
)
(88,920
)
Purchase of software and licenses
(562
)
(3,494
)
(3,291
)
(19,670
)
Consideration paid on business
combinations, net of cash acquired
—
(4,486
)
—
(4,486
)
Proceeds from sale of subsidiary, net of
cash disposed
—
—
4,073
—
Proceeds from disposal of property, plant
and equipment
12,962
508
14,999
1,468
Insurance claims received
11
32
51
310
Interest income received
5,017
5,761
12,851
17,338
Deposit of short-term deposits
(4,077
)
(59,173
)
(40,590
)
(187,938
)
Refund of short-term deposits
4,037
15,908
208,717
36,631
Net cash (used in)/generated from
investing activities*
(44,517
)
(183,605
)
7,520
(628,723
)
Cash flows from financing
activities
Shares repurchased and canceled through
buyback program
—
(5,713
)
—
(5,713
)
Bank loans and bond proceeds received and
transaction costs paid
(194
)
318,765
611,397
976,944
Bank loans and bonds repaid
(58,998
)
(226,741
)
(465,823
)
(644,591
)
Fees on loans and derivative
instruments
(2,041
)
(6,149
)
(9,295
)
(14,820
)
Interest paid
(87,037
)
(79,173
)
(253,001
)
(224,118
)
Payment for the principal of lease
liabilities
(11,929
)
(14,844
)
(44,463
)
(59,426
)
Interest paid for lease liabilities
(15,849
)
(15,405
)
(46,546
)
(40,699
)
Net (loss)/gain settled on derivative
instruments
(2,644
)
145
(22,571
)
617
Net cash used in financing
activities
(178,692
)
(29,115
)
(230,302
)
(11,806
)
Net (decrease)/increase in cash and cash
equivalents
(48,742
)
7,533
162,215
53,459
Cash and cash equivalents at beginning of
period
445,713
433,048
293,823
514,078
Effect of movements in exchange rates on
cash
528
(15,145
)
(58,539
)
(142,101
)
Cash and cash equivalents at end of
period
397,499
425,436
397,499
425,436
*Revised comparative periods to reflect an
adjustment related to the accounting treatment of foreign exchange
on goods in transit in Nigeria.
Use of Non-IFRS financial measures
Certain parts of this document contain non-IFRS financial
measures, including Adjusted EBITDA, Adjusted EBITDA Margin and
Adjusted Levered Free Cash Flow (“ALFCF”). The non-IFRS financial
information is presented for supplemental informational purposes
only and should not be considered a substitute for financial
information presented in accordance with Accounting Standards as
issued by International Accounting Standards Board (“IFRS®
Accounting Standards”), and may be different from similarly titled
non-IFRS measures used by other companies.
Adjusted EBITDA and Adjusted EBITDA Margin
We define Adjusted EBITDA (including by segment) as
income/(loss) for the period, before income tax expense/(benefit),
finance costs and income, depreciation and amortization, impairment
of withholding tax receivables, impairment of goodwill, business
combination transaction costs, impairment of property, plant and
equipment, intangible assets excluding goodwill and related prepaid
land rent, reversal of provision for decommissioning costs, net
(gain)/loss on sale of assets, share-based payment
(credit)/expense, insurance claims and certain other items that
management believes are not indicative of the core performance of
our business.
We define Adjusted EBITDA Margin as Adjusted EBITDA divided by
revenue for the applicable period, expressed as a percentage.
We believe that Adjusted EBITDA is an indicator of the operating
performance of our core business. We believe Adjusted EBITDA and
Adjusted EBITDA Margin, as defined above, are useful to investors
and are used by our management for measuring profitability and
allocating resources, because they exclude the impact of certain
items which have less bearing on our core operating performance. We
believe that utilizing Adjusted EBITDA and Adjusted EBITDA Margin
allows for a more meaningful comparison of operating fundamentals
between companies within our industry by eliminating the impact of
capital structure and taxation differences between the
companies.
Adjusted EBITDA measures are frequently used by securities
analysts, investors and other interested parties in their
evaluation of companies comparable to us, many of which present an
Adjusted EBITDA-related performance measure when reporting their
results.
Adjusted EBITDA and Adjusted EBITDA Margin are used by different
companies for differing purposes and are often calculated in ways
that reflect the circumstances of those companies. As a result,
investors should not consider these performance measures in
isolation from, or as a substitute analysis for, our results of
operations as determined in accordance with IFRS Accounting
Standards. You should exercise caution in comparing Adjusted EBITDA
and Adjusted EBITDA Margin as reported by us to Adjusted EBITDA and
Adjusted EBITDA Margin as reported by other companies. Adjusted
EBITDA and Adjusted EBITDA Margin are unaudited and have not been
prepared in accordance with IFRS Accounting Standards.
Adjusted EBITDA and Adjusted EBITDA Margin are not measures of
performance under IFRS Accounting Standards and you should not
consider these as an alternative to income/(loss) for the period or
other financial measures determined in accordance with IFRS
Accounting Standards.
Adjusted EBITDA and Adjusted EBITDA Margin have limitations as
analytical tools, and you should not consider them in isolation.
Some of these limitations are:
- they do not reflect interest expense, or the cash requirements
necessary to service interest or principal payments, on our
indebtedness;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often need to be
replaced in the future and Adjusted EBITDA and Adjusted EBITDA
Margin do not reflect any cash requirements that would be required
for such replacements;
- some of the items we eliminate in calculating Adjusted EBITDA
and Adjusted EBITDA Margin reflect cash payments that have less
bearing on our core operating performance, but that impact our
operating results for the applicable period; and
- the fact that other companies in our industry may calculate
Adjusted EBITDA and Adjusted EBITDA Margin differently than we do,
which limits their usefulness as comparative measures.
Accordingly, prospective investors should not place undue
reliance on Adjusted EBITDA or Adjusted EBITDA Margin.
ALFCF
We define ALFCF as cash from operations, before certain items of
income or expenditure that management believes are not indicative
of the core cash flow of our business (to the extent that these
items of income and expenditure are included within cash flow from
operating activities), and after taking into account net working
capital movements, income taxes paid, withholding tax, lease and
rent payments made, net interest paid or received, business
combination transaction costs, maintenance capital expenditure and
routine corporate capital expenditure. We believe that it is
important to measure the free cash flows we have generated from
operations, after accounting for the cash cost of funding and
routine capital expenditure required to generate those cash
flows.
We believe ALFCF is useful to investors because it is also used
by our management for measuring our operating cash flow, liquidity
and allocating resources. While Adjusted EBITDA provides management
with a basis for assessing its current operating performance, we
use ALFCF in order to assess the long-term, sustainable operating
liquidity of our business. ALFCF is derived through an
understanding of the funds generated from operations, taking into
account our capital structure and the taxation environment
(including withholding tax implications), as well as the impact of
non-discretionary maintenance capital expenditure and routine
corporate capital expenditure. ALFCF provides management with a
metric through which to measure the underlying cash generation of
the business by further adjusting for expenditure that are
non-discretionary in nature (such as interest paid and income taxes
paid), as well as certain cash items that impact cash from
operations in any particular period.
ALFCF and similar measures are frequently used by securities
analysts, investors and other interested parties in their
evaluation of companies comparable to us, many of which present an
ALFCF-related measure when reporting their results. Such measures
are used in the telecommunications infrastructure sector as they
are seen to be important in assessing the liquidity of a business.
We present ALFCF to provide investors with a meaningful measure for
comparing our liquidity to those of other companies, particularly
those in our industry.
ALFCF and similar measures are used by different companies for
differing purposes and are often calculated in ways that reflect
the circumstances of those companies. You should exercise caution
in comparing ALFCF as reported by us to ALFCF or similar measures
as reported by other companies. ALFCF is unaudited and has not been
prepared in accordance with IFRS Accounting Standards.
ALFCF is not intended to replace cash from operations for the
period or any other measures of cash flow under IFRS Accounting
Standards.
ALFCF has limitations as an analytical tool, and you should not
consider it in isolation. Some of these limitations are:
- not all cash changes are reflected, for example, changes in
working capital are not included and discretionary capital
expenditure are not included;
- some of the items that we eliminate in calculating ALFCF
reflect cash payments that have less bearing on our liquidity, but
that impact our operating results for the applicable period;
- the fact that certain cash charges, such as lease payments
made, can include payments for multiple future years that are not
reflective of operating results for the applicable period, which
may result in lower lease payments for subsequent periods;
- the fact that other companies in our industry may have
different capital structures and applicable tax regimes, which
limits its usefulness as a comparative measure; and
- the fact that other companies in our industry may calculate
ALFCF differently than we do, which limits their usefulness as
comparative measures.
Accordingly, you should not place undue reliance on ALFCF.
Reconciliation from loss for the period to Adjusted EBITDA
and Adjusted EBITDA Margin
The following is a reconciliation of Adjusted EBITDA and
Adjusted EBITDA Margin to the most directly comparable IFRS
measure, which are loss and loss margins, respectively, for the
periods presented:
Three months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2024
2023*
2024
2023*
$'000
$'000
$'000
$'000
Loss for the period
(205,703
)
(268,804
)
(1,887,267
)
(1,531,355
)
Divided by total Revenue
420,282
467,023
1,273,403
1,615,755
Loss margin for the period
(48.9
)%
(57.6
)%
(148.2
)%
(94.8
)%
Adjustments:
Income tax expense
6,397
16,659
40,669
89,118
Finance costs(a)
350,825
271,595
2,163,157
1,816,864
Finance income(a)
(25,732
)
(5,823
)
(49,696
)
(18,233
)
Depreciation and amortization
91,308
104,931
266,040
340,381
Impairment of withholding tax
receivables(b)
21,855
10,508
32,827
35,112
Impairment of goodwill
—
—
87,894
—
Business combination transaction costs
578
161
958
1,647
Impairment of property, plant and
equipment, intangible assets excluding goodwill and related prepaid
land rent(c)
4,132
103,429
12,959
108,510
Net gain on disposal of property, plant
and equipment
(1,270
)
(386
)
(3,562
)
(952
)
Share-based payment expense(d)
1,813
2,654
9,879
9,571
Insurance claims(e)
(11
)
(32
)
(51
)
(310
)
Other costs(f)
1,783
3,211
8,175
8,059
Other income
—
(1
)
—
(59
)
Adjusted EBITDA
245,975
238,102
681,982
858,353
Divided by total Revenue
420,282
467,023
1,273,403
1,615,755
Adjusted EBITDA Margin
58.5
%
51.0
%
53.6
%
53.1
%
*Revised to reflect an adjustment related
to the accounting treatment of foreign exchange on goods in transit
in Nigeria.
(a) Finance costs consist of interest
expense and loan facility fees on borrowings, the unwinding of the
discount on our decommissioning liability and lease liability,
realized and unrealized net foreign exchange losses arising from
financing arrangements and net realized and unrealized losses from
valuations of financial instruments. Finance income consists of
interest income from bank deposits, realized and unrealized net
foreign exchange gains arising from financing arrangements and net
realized and unrealized gains from valuations of financial
instruments.
(b) Revenue withholding tax primarily
represents amounts withheld by customers in Nigeria and paid to the
local tax authority. The amounts withheld may be recoverable
through an offset against future corporate income tax liabilities
in the relevant operating company. Revenue withholding tax
receivables are reviewed for recoverability at each reporting
period end and impaired if not forecast to be recoverable.
(c) Represents non-cash charges related to
the impairment of property, plant and equipment, intangible assets
excluding goodwill and related prepaid land rent on the
decommissioning of sites.
(d) Represents expenses related to
share-based compensation, which vary from period to period
depending on timing of awards and changes to valuation inputs
assumptions.
(e) Represents insurance claims included
as non-operating income.
(f) Other costs for the three months ended
September 30, 2024, included one-off consulting fees related to
corporate structures and operating systems of $0.7 million (three
months ended September 30, 2023: $1.7 million) and $5.2 million for
the nine months ended September 30, 2024 (nine months ended
September 30, 2023: $4.5 million); costs related to internal
reorganization for the three months ended September 30, 2024, of
$0.9 million (three months ended September 30, 2023: $0.6 million)
and $2.7 million for the nine months ended September 30, 2024 (nine
months ended September 30, 2023: $0.7 million); other one-off
consulting services for the three months ended September 30, 2024,
of $Nil (three months ended September 30, 2023: $0.7 million) and
$Nil for the nine months ended September 30, 2024 (nine months
ended September 30, 2023: $1.7 million); one-off professional fees
related to financing for the three months ended September 30, 2024,
of $0.1 million (three months ended September 30, 2023: $Nil) and
$0.2 million for the nine months ended September 30, 2024 (nine
months ended September 30, 2023: $0.2 million).
Reconciliation from cash from operations to ALFCF
The following is a reconciliation of ALFCF to the most directly
comparable IFRS measure, which is cash from operations, for the
three and nine months September 30, 2024 and 2023:
Three months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2024
2023*
2024
2023*
$'000
$'000
$'000
$'000
Cash from operations
182,431
229,913
427,011
740,869
Adjustments:
Net movement in working capital
58,948
8,318
250,771
120,980
Income taxes paid
(6,575
)
(8,450
)
(35,091
)
(42,407
)
Withholding tax(a)
(20,195
)
(23,159
)
(64,299
)
(90,088
)
Lease and rent payments made
(29,140
)
(31,453
)
(97,880
)
(104,272
)
Net interest paid(b)
(82,020
)
(73,412
)
(240,150
)
(206,780
)
Business combination transaction costs
181
328
1,850
4,436
Other costs(c)
2,303
2,969
3,779
7,747
Maintenance capital expenditure(d)
(18,763
)
(19,259
)
(48,512
)
(114,278
)
Corporate capital expenditure(e)
(61
)
(36
)
(402
)
(1,590
)
ALFCF
87,109
85,759
197,077
314,617
Non-controlling interest
(6,605
)
(3,186
)
(10,327
)
(7,747
)
ALFCF excluding non-controlling
interest
80,504
82,573
186,750
306,870
*Revised to reflect an adjustment related
to the accounting treatment of foreign exchange on goods in transit
in Nigeria.
(a) Withholding tax primarily represents
amounts withheld by customers which may be recoverable through an
offset against future corporate income tax liabilities in the
relevant operating company.
(b) Represents the aggregate value of
interest paid and interest income received.
(c) Other costs for the three and nine
months ended September 30, 2024, primarily related to one-off
consulting fees.
(d) We incur capital expenditure in
relation to the maintenance of our towers and fiber equipment,
which is non-discretionary in nature and required in order for us
to optimally run our portfolio and to perform in line with our
service level agreements with customers. Maintenance capital
expenditure includes the periodic repair, refurbishment and
replacement of tower, fiber equipment and power equipment at
existing sites to keep such assets in service.
(e) Corporate capital expenditure, which
are non-discretionary in nature, consist primarily of routine
spending on information technology infrastructure.
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version on businesswire.com: https://www.businesswire.com/news/home/20241112661161/en/
communications@ihstowers.com www.ihstowers.com
IHS (NYSE:IHS)
過去 株価チャート
から 11 2024 まで 12 2024
IHS (NYSE:IHS)
過去 株価チャート
から 12 2023 まで 12 2024