20-F: IHS Holding Limited Reports Fiscal Year 2024 Results

IHS Holding Limited files its 20-F report, detailing financial performance for the year ended December 31, 2024, including revenue, losses, and key financial metrics.

Summary

• IHS Holding Limited has filed its 20-F report for the fiscal year ended December 31, 2024.
• The report details the company's financial performance, including revenue of $1,711 million and a loss of $1,644.2 million.
• The company's Adjusted EBITDA was $928 million.
• The report also mentions various financial activities, including debt issuances and repayments, and strategic reviews undertaken by the company.
• The company operated 39,229 towers across six countries in Africa and two countries in Latin America.
• The company's Colocation Rate was 1.51x as of December 31, 2024.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While the company has a strong market position and long-term contracts, it also faces significant challenges, including losses, macroeconomic volatility, and regulatory risks. The sentiment score reflects the balance between these positive and negative factors.

Positives

• The company has Contracted Revenue of $11.9 billion from Key Customers with an average remaining lease term of 7.8 years.
• The company is implementing a Carbon Reduction Roadmap to decrease emissions.
• The company has a track record of mitigating the impact of macroeconomic volatility.
• The company has a disciplined capital allocation policy.

Negatives

• The company reported a significant loss of $1,644.2 million for FY24.
• The company identified a material weakness in its internal control over financial reporting.
• The company faces foreign exchange risks, particularly with the Nigerian Naira.
• The company relies on a small number of MNOs for a significant portion of its revenue.

Risks

• Non-performance or termination of customer agreements could adversely affect the company.
• The company may face difficulties in collecting payments from customers.
• Operations in emerging markets involve economic, legal, and political risks.
• Foreign exchange risks and currency fluctuations could impact the company's financial results.
• Increased competition in the tower infrastructure industry could affect the company's business.
• The company relies on third-party contractors and suppliers, which poses operational risks.
• The company may face difficulties in renewing ground leases or protecting access rights.
• New technologies could reduce the need for tower infrastructure.
• The company may be subject to legal and regulatory proceedings.
• The company may be unable to manage growth effectively or integrate acquisitions.
• The company relies on key management personnel, and their loss could affect the business.
• The company may not always operate with required approvals and licenses.
• Increased attention to ESG initiatives could increase costs or harm the company's reputation.
• The company may face local community opposition to some of its sites.
• The company's insurance coverage may be inadequate for unforeseen events.
• The company's key information technology systems may be vulnerable to cyberattacks.
• The company could have liability under health, safety, and environmental laws.
• The company relies on shareholder support and related party transaction risks.

Future Outlook

The company expects to adopt a more balanced approach to revenue growth and cash generation to counterbalance the recent macroeconomic headwinds across the world, particularly in Nigeria. The company is also undertaking a strategic review process, which includes evaluation of organizational initiatives, plans and goals to try to ensure they align with long-term objectives and external environment conditions, and targeted at shareholder value-creation options.

Industry Context

The document provides insights into the competitive landscape of the tower infrastructure industry, particularly in emerging markets. It highlights the importance of factors such as power management expertise, tower location, and relationships with MNOs. The document also mentions the potential impact of new technologies on the demand for tower infrastructure.

Comparison to Industry Standards

• The document mentions key competitors in the tower infrastructure industry, such as American Tower Corporation (ATC), SBA Communications Corporation (SBA), and Helios Towers plc.
• It notes that IHS Towers is the market leader in Africa by tower count as of December 31, 2024, with 30,650 towers.
• In Brazil, the competitive landscape is wider with ATC, SBA and Highline owning more towers than IHS as of December 31, 2024, and numerous smaller tower companies of similar size to or smaller than IHS's business.

Legal Proceedings

• In March 2023, Oi S.A. (Oi Brazil) filed for a new judicial reorganization proceeding, listing our contract related to the GTS SP5 Acquisition among Oi Brazils debts.
• In April 2024, an Oi Brazil restructuring plan was presented to the court in Brazil and agreed upon by creditors (including the Company), which resulted in our customer contract terms being amended (including, among other things, haircuts and amended payment terms).
• On June 30, 2023, Oranje-Nassau Developpement S.C.A., FIAR (Wendel) formally commenced Court proceedings in the Cayman Islands calling for specific performance and/or an injunction related to our obligations under the shareholders agreement dated as of October 13, 2021 (the Shareholders Agreement).
• On January 16, 2024, we and Wendel announced that we had entered into a settlement agreement in relation to the ongoing litigation.

Related Party Transactions

• MTN Group is one of our shareholders as well as a related party of certain MTN Customers.
• During the year ended December 31, 2024, we entered into an agreement to sub-lease office space from a subsidiary company of Wendel Group.
• During the year ended December 31, 2024, we entered into an agreement for the provision of consulting services from Teneo. Ms. Ursula Burns, one of our directors, is the Chairwoman of the Board of Teneo Worldwide, LLC.
• Capgro Trust, a family trust for the Phuthuma Nhleko family, is the sole shareholder of K2022644716 (South Africa) Proprietary Limited, which holds a 45% stake in SATH. Mr. Phuthuma Nhleko, one of our directors, serves as a trustee of the Capgro Trust.

Stakeholder Impact

• The document provides information relevant to shareholders, employees, customers, suppliers, and creditors.
• The company's financial performance and strategic decisions can impact shareholder value.
• The company's operations and service quality affect its customers.
• The company's relationships with suppliers and contractors are important for its operations.
• The company's ability to meet its debt obligations is relevant to its creditors.

Next Steps

• The company will continue to implement its Carbon Reduction Roadmap.
• The company will continue to monitor and evaluate the impact of macroeconomic factors on its business.
• The company will continue to pursue operational efficiencies and cost reductions.
• The company will continue to assess acquisition, investment and divestment opportunities.

Key Dates