IHS shares surge 8% following strong Q2 2025 performance surpassing expectations
IHS Towers Holding Ltd., the African continent's largest independent mobile infrastructure provider, has announced a net income of $32.3 million for the second quarter of 2025. This marks a significant turnaround from the $124.3 million loss recorded in the same period of 2024.
The profit swing was primarily due to a decrease in net finance costs. IHS Towers Holding Ltd. has been focusing on debt reduction and execution after sustaining profitability. The company repaid $154 million of high-interest debt, lowering its weighted average cost of debt by 100 basis points.
A successful 50% tariff hike for key customers like MTN and Airtel Nigeria has been pivotal in the company's turnaround. The stability of Nigeria's naira also contributed to the profit. Nigeria, being the largest market for IHS Towers Holding Ltd., continues to provide a positive backdrop for its operations.
The company attributed a 0.5% year-on-year decrease in quarterly revenue to a one-time reduction of $14.5 million related to a change in its power services agreement with MTN Group Ltd. in South Africa. Despite this, the company maintained a stable Adjusted EBITDA margin of 57.3%, reflecting its financial discipline.
IHS Towers Holding Ltd. has streamlined its portfolio by divesting from operations in Peru, Kuwait, and Rwanda to increase shareholder value. This move, along with a 13.8% year-on-year decrease in total capital expenditure to $46.3 million, indicates more efficient use of resources.
The company raised its full-year 2025 revenue guidance to a range of $1.70 billion to $1.73 billion, reflecting a positive outlook despite foreign exchange risks. The stock price rose to $7.33, and the shares rose by 8% following the announcement.
The key factors driving the turnaround of IHS Towers Holding Ltd. (referred to as IHS Holding Ltd.) include organic growth, stable EBITDA margin, debt management, capital expenditure reduction, and revenue guidance. The performance was also sustained by the full effect of tariff increases for major clients in Nigeria.
With profitability now sustained, IHS is focusing on "debt reduction and pinpoint execution," according to its company results. The ongoing stability of the naira in Nigeria continues to support the company's performance. The turnaround plan initiated in late 2024 is showing clear results.
The chairman and CEO, Sam Darwish, expressed excitement about the significant growth prospects across the company's footprint, supported by the ongoing rollout of 5G across its markets. The company's stock has seen significant gains, partly due to its return to profitability and the positive long-term outlook, which forecasts $2.0 billion in revenue by 2028. This market response suggests investor confidence in the company's turnaround strategy.
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