20-F: IHS Holding Reports Profit, Plans Private Takeover by MTN and Latam Exit

IHS Holding Limited announced a return to profitability in 2025, alongside definitive agreements for a private acquisition by MTN Group and the divestiture of its Latin American tower and fiber operations.

Summary

• IHS Holding Limited reported an income of $126.8 million for the year ended December 31, 2025, a significant turnaround from losses of $1,644.2 million in 2024 and $1,988.2 million in 2023.
• Adjusted EBITDA increased by 9.0% year-on-year to $1,012.3 million in 2025, despite a 3.9% headwind from disposals.
• Revenue from continuing operations grew by 3.6% to $1,582.0 million in 2025, driven by organic growth from foreign exchange resets, escalations, and increased Tenants, Lease Amendments, and New Sites.
• The company entered into a definitive merger agreement on February 17, 2026, to be acquired by MTN Group Limited for $8.50 per ordinary share in cash, valuing the company at approximately $6.2 billion.
• IHS Holding also agreed to sell its 51.0% stake in I-Systems to TIM S.A. for an enterprise value of approximately $453 million, and its Latin American tower operations to Macquarie Asset Management for an enterprise value of approximately $952 million.
• The Latin American tower and fiber operations were classified as discontinued operations and held for sale as of December 31, 2025, resulting in a loss from discontinued operations of $477.6 million in 2025, primarily due to non-current asset impairments.
• Net finance costs decreased significantly by $1,884.1 million in 2025, mainly due to reduced volatility and stabilization of the Nigerian Naira against the U.S. dollar, leading to lower net foreign exchange losses.
• The effective tax rate on continuing operations was 12.5% in 2025, lower than the group's weighted average rate, partly due to the recognition of previously unrecognized deferred tax assets in Nigeria.
• Capital expenditure for 2025 was $246.4 million, a decrease of 3.7% from 2024, primarily due to lower fiber capital expenditure in the Latam segment.
• The company completed Project Green in 2025, an initiative to reduce diesel dependency by integrating solar panels and battery storage solutions, with 38% of African sites (excluding South Africa) now having solar power.
• The average remaining length of Master Lease Agreements (MLAs) with Key Customers was 6.4 years as of December 31, 2025, with aggregate Contracted Revenue of $11.1 billion.
• The company experienced Churn of 3,836 Tenants in 2025, including 2,676 from T2 in Nigeria where revenue was not being recognized.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this filing positively due to the significant return to profitability, strong Adjusted EBITDA growth, and clear strategic direction through the planned MTN merger and Latam divestitures, which are expected to streamline operations and enhance shareholder value, despite the impairment charges related to discontinued operations.

Positives

• IHS Holding returned to profitability in 2025 with an income of $126.8 million, a substantial improvement from prior year losses.
• Adjusted EBITDA increased by 9.0% to $1,012.3 million in 2025, demonstrating strong operational performance.
• Revenue from continuing operations grew by 3.6% in 2025, driven by organic growth from foreign exchange resets, escalations, and increased customer activity.
• The stabilization of the Nigerian Naira significantly reduced net foreign exchange losses, leading to a $1,884.1 million decrease in net finance costs.
• Successful completion of Project Green in 2025, with 38% of African sites (excluding South Africa) now utilizing solar power solutions, reducing diesel dependency.
• Strong contractual base with Key Customers, boasting $11.1 billion in aggregate Contracted Revenue and an average remaining MLA term of 6.4 years.
• The company achieved B-BBEE compliance in South Africa through a share subscription agreement with SA Tower Holdings Proprietary Limited (SATH) in January 2025.
• The Nigeria segment showed robust Adjusted EBITDA growth of 17.2% year-on-year to $689.0 million in 2025.

Negatives

• A significant loss from discontinued operations of $477.6 million in 2025, primarily due to impairments of non-current assets in the Latam segment.
• The Latam segment's Adjusted EBITDA growth was modest at 6.4% to $146.9 million in 2025.
• The SSA segment experienced a 3.0% decrease in Adjusted EBITDA to $298.7 million in 2025, partly due to the Rwanda disposal and increased regulatory fees.
• Churn of 3,836 Tenants in 2025, including 2,676 from T2 in Nigeria, impacting tenancy numbers.
• The company continues to face risks from geopolitical conflicts and wars, which may affect oil production, trade routes, and global energy markets, impacting diesel prices.
• The company's ability to satisfy cash conditions for the MTN merger is dependent on the successful completion of Latam divestitures, which are subject to closing conditions and potential delays.

Risks

• Significant portion of revenue derived from a small number of MNOs; non-performance, termination, non-renewal, or material modification of customer agreements could have a material adverse effect.
• Volatility in timing for settlement of invoices or inability to collect amounts due, potentially due to customer insolvency or economic downturns.
• Exposure to economic, political, and other uncertainties in emerging markets (Africa, Latin America), including inflation, civil unrest, governmental intervention, and tax regime changes.
• Foreign exchange risks, particularly in relation to the Nigerian Naira, including devaluation, illiquidity in foreign exchange markets, and potential inability to hedge or access U.S. dollars.
• Existence of multiple foreign exchange markets with different exchange rates may impact contract rates and financial reporting translation rates.
• Inability to successfully execute business strategy and operating plans or manage growth, dependent on external factors and effective management.
• Reliance on third-party contractors and suppliers for services and goods (e.g., diesel, equipment); disruptions or non-performance could hinder operations.
• Contracted Revenue is based on estimates and assumptions; actual results may differ materially.
• Increases in operating expenses or costs (e.g., diesel, ground leases) or inability to pass-through/mitigate them could erode operating margins.
• Inability to renew/extend ground leases or protect rights to access and operate towers could adversely affect business.
• Loss of tenancies and/or customers, or customer consolidation, could lead to reduced revenue.
• Slowdown in growth or reduction in demand for wireless communications services could adversely affect demand for tower space.
• New technologies (e.g., 5G, active sharing) could reduce the need for tower infrastructure and decrease revenue.
• Increased competition in the tower infrastructure industry could adversely affect lease rates and acquisition costs.
• Risks related to strategic transactions, including inability to identify suitable acquisition candidates, integration challenges, and unforeseen liabilities.
• Inability to raise financing for future growth or operating expense reduction strategies may adversely affect business strategy.
• Towers with Managed with License to Lease (MLL) or Right-of-Use (ROU) agreements are subject to termination risk.
• Failure to effectively operate or successfully execute upgrades to IT systems could have a material adverse effect.
• Potential liability under health, safety, and environmental laws, or failure to accurately report on sustainability metrics.
• Perceived health risks from radio emissions could adversely affect revenue and/or costs.
• Local community opposition to sites or infrastructure could require dismantling and relocation.
• Inadequate insurance coverage for natural disasters, security breaches, and other unforeseen events.
• Maintenance of towers could subject the company to liability for property damage or other accidents.
• Effects of climate change, including extreme weather events, could disrupt operations and increase costs.
• Exposure to disputes and legal, tax, regulatory, or law enforcement proceedings.
• Material adverse tax consequences for U.S. shareholders if classified as a passive foreign investment company (PFIC).
• Changes in tax laws, rates, or fees, and audits/investigations, could materially adversely affect financial condition.
• Certain countries may treat indirect change of ownership of subsidiaries as triggering tax charges.
• Exposure to political instability, religious differences, ethnicity, and regionalism in emerging markets.
• Taxation, customs, and regulatory systems in emerging markets may be subject to changes and inconsistencies.
• Inefficiencies and corruption in judicial systems may create an uncertain environment for investment.
• Downgrading of Nigeria's debt rating could negatively impact the business.
• High level of indebtedness and restrictive debt covenants could materially adversely affect business and liquidity.
• Exposure to interest rate risks from floating rate borrowings.
• Inability to generate sufficient cash to service all indebtedness.
• Difficulties in enforcing foreign judgments against management or the company.
• If securities or industry analysts cease publishing research or change recommendations adversely, stock price could decline.
• Sales of a substantial number of ordinary shares could cause the market price to drop significantly.
• Increased costs and obligations as a public company, with management devoting substantial time to compliance.
• Inaccurate assumptions in critical accounting judgments could materially adversely affect financial results.
• No regular cash dividends paid on ordinary shares; return on investment dependent on share price appreciation.
• IHS Holding Limited is a holding company; repayment of indebtedness depends on subsidiaries' cash availability.
• Shareholders may face difficulties in protecting their interests due to Cayman Islands exempted company status and choice of forum provisions.

Future Outlook

The company's future outlook is dominated by its planned transition to a privately held entity under MTN Group Limited, following the successful divestiture of its Latin American tower and fiber operations. This strategic shift aims to enhance shareholder value and streamline operations. The company anticipates continued focus on operational efficiencies, cost and capital expenditure reductions, and leveraging its strong market positions in Africa. The successful completion of these transactions will lead to the delisting of ordinary shares from the New York Stock Exchange.

Management Comments

• Management has adopted a more balanced approach to revenue growth and cash generation to counterbalance macroeconomic headwinds, particularly in Nigeria.
• Management is pursuing operational efficiencies through productivity enhancements, cost and capital expenditure reductions, and a review of the portfolio of markets and assets.
• Management believes that the underlying communications trends in its markets will continue to drive the need for additional infrastructure, enabling further growth through Colocation, Lease Amendments, New Site construction, and adjacent communications infrastructure investments.
• Management has concluded that the material weakness in internal control over financial reporting has been remediated as of December 31, 2025.

Industry Context

StockSavvy.ai notes that IHS Holding's strategic moves reflect a broader trend in the telecommunications infrastructure sector towards consolidation and optimization in emerging markets. The divestiture of Latin American assets allows for a sharper focus on the African continent, where IHS maintains a leading position. The planned acquisition by MTN Group highlights the increasing integration between MNOs and tower companies, seeking to leverage shared infrastructure for cost efficiencies and network expansion, particularly with the ongoing rollout of 5G technologies. The emphasis on power management and carbon reduction aligns with global ESG pressures and the unique operational challenges in African markets with unreliable grid power. The competitive landscape, particularly in Brazil with players like ATC, SBA, and Highline, underscores the rationale for exiting less dominant markets to concentrate resources where market leadership is stronger.

Comparison to Industry Standards

• IHS Holding is the largest independent multinational emerging-market-only tower operator and one of the largest independent multinational tower operators globally by tower count, indicating a strong competitive position.
• The company's average power uptime of 99.2% in African markets (excluding South Africa) for 2025, with an average mean time to repair under two hours, demonstrates high operational efficiency compared to typical standards in emerging markets with unreliable grid infrastructure.
• The Colocation Rate of 1.46x as of December 31, 2025, suggests ample capacity for organic growth, which is a key metric for tower companies like American Tower Corporation and Cellnex Telecom S.A. in assessing asset utilization.
• The average age of the tower portfolio at 8.9 years indicates a relatively young infrastructure base, offering potential for long-term operational efficiency and lower immediate capital-intensive upgrades compared to older portfolios.

Corporate Governance

Legal Proceedings

• Settlement agreement reached with Oranje-Nassau Developpement S.C.A., FIAR (Wendel) in January 2024 regarding ongoing litigation related to the shareholders agreement.
• Ongoing tax audits in various jurisdictions, including Nigeria, with potential for additional tax assessments.
• Potential regulatory inquiry or action from the Federal Competition and Consumer Protection Commission (FCCPC) and/or Nigerian Communications Commission (NCC) in Nigeria regarding market dominance, potentially leading to fines or contract modifications.
• Oi S.A. (Oi Brazil) filed for a new judicial reorganization proceeding in March 2023, which was converted to bankruptcy in November 2025 (later reversed), impacting customer contract terms and asset recoverability.

Related Party Transactions

• MTN Group Limited is a significant shareholder (25.4% of ordinary shares) and a related party to MTN Customers, who collectively accounted for 71% of the company's revenue from continuing operations in 2025.
• Oranje-Nassau Developpement S.C.A., FIAR (Wendel) is a significant shareholder (18.8% of ordinary shares) and has certain director designation and consent rights under the Shareholders Agreement.
• Capgro Trust, a family trust for director Phuthuma Nhleko, is the sole shareholder of K2022644716 (South Africa) Proprietary Limited, which holds a 45% stake in SA Tower Holdings Proprietary Limited (SATH), a consortium that subscribed to 30% of IHS South Africa shares.
• The company engaged Teneo Strategy LLC for consulting services, where director Ursula Burns is the Chairwoman of the Board of Teneo Worldwide, LLC, incurring fees of $496,667 in 2025.
• Indemnification agreements are in place with executive officers and directors, providing protection against liabilities incurred in their duties, except for dishonesty, willful default, or fraud.

Stakeholder Impact

• Shareholders: Will receive $8.50 per ordinary share in cash upon completion of the MTN merger, leading to delisting from NYSE. Those treated as U.S. holders will face federal income tax consequences. Shareholders will not participate in future growth of the company.
• Employees: Potential uncertainty regarding roles and future employment with the surviving entity after the merger. The company's ability to retain key personnel may be challenged.
• Customers: Continued service provision under existing MLAs, with potential for new contract terms or renegotiations following divestitures and merger. Service quality and network reliability remain a focus.
• Suppliers: Potential disruptions in supply chains due to geopolitical events or economic conditions, impacting the timely provision of materials and equipment, especially diesel.
• Creditors: The company's level of indebtedness and restrictive covenants could affect its ability to obtain future financing or refinance existing debt. The merger and divestitures are expected to impact the capital structure.

Next Steps

• Completion of the sale of the 51.0% stake in I-Systems to TIM S.A., subject to regulatory approvals.
• Completion of the sale of Latin American tower operations to Macquarie Asset Management, subject to regulatory approvals and a successful capital raise.
• Shareholder vote on the authorization and approval of the merger agreement with MTN Group Limited.
• Receipt of requisite regulatory approvals for the merger with MTN Group Limited.
• Delisting of ordinary shares from the New York Stock Exchange upon consummation of the merger.
• Deregistration under the Securities Exchange Act of 1934 upon consummation of the merger.
• Continued efforts to achieve the 2030 emissions intensity goal as part of the Carbon Reduction Roadmap.

Key Dates

Keywords

Telecommunications infrastructure, Tower operator, Emerging markets, Nigeria, MTN Group, Merger agreement, Divestiture, Latin America, I-Systems, Macquarie Asset Management, Naira devaluation, Adjusted EBITDA, Capital expenditure, Debt financing, Foreign exchange risk, Sustainability, Project Green, Colocation, Lease Amendments, New Sites, SEC filing, 20-F