IHS Holding Limited reports Q4 and FY 2022 financial results

IHS Holding Limited, 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 fourth quarter and full year ended December 31, 2022.

Sam Darwish, IHS Towers Chairman and Chief Executive Officer, stated, “Today, we announced IHS Towers’ results for FY22, our first full year as a public company. During 2022 we accomplished a lot, which we believe demonstrates not just the growth potential within our business, but also its resilience in the challenging global macro-economic environment. In 2022 we focused on organic growth, targeted inorganic growth, de-risking our balance sheet, power and greenhouse gas initiatives and positioning ourselves for 2023. 2022 included two acquisitions that bolstered our size in Brazil and allowed us to enter South Africa as the largest independent tower operator in the country. Both transactions demonstrate how IHS continues to deliver on our diversification strategy, and our Latam business now has annualized Segment Adjusted EBITDA of over $125 million based on 4Q22 results. In terms of overall scale, IHS generated over $1 billion in Adjusted EBITDA in 2022. We also took steps to improve our stock trading liquidity and strengthen our balance sheet by pushing out debt maturities, and in the latter case, we’ve already taken further steps in 2023 to do the same. We also upstreamed over $200 million in cash from Nigeria, which is more than we did in 2021, despite a more challenging environment. And lastly, we announced our Carbon Reduction Roadmap and Project Green – our plan to reduce our reliance on diesel and generate meaningful cost savings. In terms of 4Q, IHS finished the year with a strong quarter with 2022 revenue, Adjusted EBITDA and RLFCF all at the high end or above our guidance. The strength was primarily driven by continued secular demand and to a lesser degree additional power revenue and a $4 million FX tailwind vs. rates previously assumed in guidance. We expect this strength to continue, as reflected in our 2023 guidance that we are introducing today, and which implies organic revenue growth of 23%. Overall, I am very pleased with how we performed in 2022 and the direction our business is heading.”

The financial results for the quarters ended December 31, 2022 and December 31, 2021 and the financial results for the full year ended December 31, 2022 are unaudited. The financial results for the full year ended December 31, 2021 are extracted from the audited financial statements for the year then ended.

Results for the three months ended December 31, 2022 versus 2021
During the fourth quarter of 2022, revenue was $526.2 million compared to $415.6 million for the fourth quarter of 2021, an increase of $110.6 million, or 26.6%. Organic growth was $97.6 million, or 23.5%, driven primarily by power indexation, escalations, Lease Amendments, foreign exchange resets and new Colocation, as well as fiber and New Sites. Aggregate inorganic revenue growth was $44.9 million, or 10.8%, for the fourth quarter of 2022 driven by the MTN SA Acquisition, GTS SP5 Acquisition, I-Systems Acquisition and fifth stage of the Kuwait Acquisition. The increase in the period was partially offset by the non-core impact of negative movements in foreign exchange rates of $32.0 million, or 7.7%.

Adjusted EBITDA was $272.7 million for the fourth quarter of 2022 compared to $216.6 million for the fourth quarter of 2021. Adjusted EBITDA margin for the fourth quarter of 2022 was 51.8% (fourth quarter of 2021: 52.1%). The increase in Adjusted EBITDA primarily reflects the increase in revenue discussed above, partially offset by an increase in cost of sales resulting from higher diesel costs in 2022 largely due to the current situation between Russia and Ukraine, and an increase in maintenance and repair costs alongside an increase in administrative expenses associated with being a public company and acquisitions listed above.

Loss for the period was $273.6 million for the fourth quarter of 2022 compared to a loss of $72.3 million for the fourth quarter of 2021. The loss for the period reflects the impact of an increase in net finance costs mainly due to an increase in realized and unrealized foreign exchange losses on financing and an increase in interest expense. The loss for the period is also due to an increase in cost of sales, including higher power generation cost which includes diesel costs, increased administrative expenses associated with being a public company and acquisitions listed above, impairment of goodwill and a decrease in deferred tax benefit, partially offset by an increase in revenue as discussed above.

Cash from operations and RLFCF for the fourth quarter of 2022 were $289.3 million and $97.3 million, respectively, compared to $190.2 million and $87.9 million, respectively, for the fourth quarter of 2021. The increase in cash from operations primarily reflects the aggregate impact of the increase in revenue discussed above, partially offset by an increase in cost of sales and administrative expenses. The increase in RLFCF is due to the increase in cash from operations as described above, partially offset by the increase in net interest paid, withholding tax and maintenance capital expenditures. The increase is also partially offset by the absence of non-recurring listing costs and other income which occurred during the fourth quarter of 2021.

CT Bureau