In a remarkable display of operational strength, IHS Towers—one of the world’s foremost independent managers of shared telecom infrastructure—announced impressive second-quarter results for the period ending 30 June 2025. Despite navigating a challenging economic climate, particularly with currency fluctuations and divestments, the company exceeded expectations and confidently raised its full-year guidance.
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Q2 Performance: Underlying Resilience Amid Slight Headwinds
- Revenue: The company recorded US$433.3 million, marking a slight 0.5% year-on-year dip, largely attributable to the December 2024 sale of its Kuwait asset. Excluding that, topline grew by 2.1%. Most reassuringly, organic growth surged by 11.1%, thanks to healthy on-the-ground activity in colocation, lease amendments, new tower deployments, plus benefits from FX resets and power indexation.
- Adjusted EBITDA: Clocking in at US$248.5 million, it slipped 0.9% year-on-year, or improved 1.5% when excluding the Kuwait disposal, underscoring sustained financial discipline that maintained an EBITDA margin of 57.3%.
- Cash Flow & Free Cash: Operating cash flow was robust at US$254.8 million, a notable 68.1% increase compared to the same period last year. Adjusted Levered Free Cash Flow (ALFCF) came in at US$54.0 million, though this represented a 19.2% drop, mainly due to re-phasing of interest payments following bond refinancing.
- Capex: Investment remained conservative, at US$255.9 million reported by TechAfrica (or US$46.3 million per another source), reflecting a strategic tightening of capital allocation..
- Balance Sheet: The net leverage ratio improved to 3.4×, down 0.5× year-on-year, signalling progress towards a healthier debt profile.
Strategic Moves Supporting the Gains
- Divestment of IHS Rwanda: The company agreed to sell 100% of its Rwandan operations to Paradigm Tower Ventures for an attractive US$274.5 million, reinforcing its shareholder-value-centric strategy.
- Debt Optimisation: IHS paid down US$154 million in higher-cost debt in Nigeria and Brazil, further shoring up its balance sheet.
- Credit Facility Upgrade: The firm replaced a US$300 million revolving credit facility (due in 2026) with one extendable to US$400 million, now accessible through Q3 2028, offering greater liquidity and flexibility.
- Currency Stability: The Naira remained fairly stable, depreciating a minimal 0.3%, which helped mitigate FX-related risks and ensured sufficient USD liquidity.
Footprint Expansion & Operational Strength
- Tower & Tenant Growth: The infrastructure network continued to expand, with 39,184 towers, 59,743 tenants, and 40,078 lease amendments concluded. This translates to a solid colocation rate of 1.52×.
- 5G Momentum: IHS attributed continued organic growth to increased demand from 5G rollouts—a promising sign as the continent’s digital connectivity accelerates.
CEO Perspective
Chairman and CEO Sam Darwish expressed optimism:
“Our positive momentum continued in the second quarter, with strong performances across our key metrics of revenue, Adjusted EBITDA and ALFCF, in combination with a continued reduction in Total Capex. Given our encouraging year-to-date progress, together with sustained macroeconomic stability across our markets, we are also pleased to be raising our full year 2025 guidance across all key metrics… We remain excited by the significant growth prospects across our footprint, which are supported by the ongoing rollout of 5G…”
He also noted that as the company approaches the lower bound of its leverage target, it may begin considering capital returns, such as share buybacks or a dividend policy.
Full-Year Guidance: A Lifted Outlook
Reflecting its strong first half, IHS raised its full-year 2025 projections:
- Revenue: Upped from US$1,680–1,710 million to US$1,700–1,730 million
- Adjusted EBITDA: Raised from US$960–980 million to US$985–1,005 million
- ALFCF: Increased from US$350–370 million to US$390–410 million
- Capex: Tightened from previously guided US$260–290 million to US$240–270 million.
These adjustments already account for the expected reduction in output due to divesting the Rwanda business.
Editor’s Take
IHS Towers’ Q2 2025 results showcase an impressive blend of discipline and growth. Despite divestments and currency variation pressures, the company maintained strong organic performance, prudently managed operating expenses, optimised capital deployment, and strengthened its balance sheet. The elevated guidance across all key metrics—especially amid Rwanda exit and modest Naira shifts—is a testament to resilience and strategic foresight.
Of particular note is the anticipated impact of 5G expansion, which continues to drive lease renewals, new deployments, and higher colocation rates, particularly across Nigeria and other core African markets. As IHS nears its leverage comfort zone, its mention of share buybacks or a dividend policy raises positive signals for investors looking for returns.
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