IHS (IHS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $435.4M, up 4% sequentially but down 20.3% year-over-year due to a significant FX headwind from the Nigerian naira devaluation, partially offset by strong organic growth and FX resets.

• Adjusted EBITDA for Q2 2024 was $250.8M (57.6% margin), up 35% sequentially but down 11.9% year-over-year, with margin improvement from 52.1% to 57.6%.

• All major MTN contracts across Africa were renewed or extended, securing $12.3B in contracted revenues and major tenancies through 2032–2034.

• Completed sale of Peru subsidiary and continued strong operational growth in Brazil, with 136 towers built in Q2 and 294 year-to-date.

• Strategic review ongoing, targeting $500M–$1B in asset disposals to reduce debt, with governance enhancements approved at the 2024 AGM.

Financial highlights

• Q2 2024 revenue: $435.4M, down 20.3% year-over-year due to a $478M–$490M FX headwind from the naira; organic revenue up 69.3%.

• Adjusted EBITDA: $250.8M (57.6% margin), down 11.9% year-over-year but up 35% sequentially; margin improved by 550 bps year-over-year.

• CapEx decreased 73% year-over-year to $53.7M–$54M, reflecting a strategic pullback across all segments.

• ALFCF was $66.9M–$67M, down about 10% year-over-year, with a cash conversion rate of 26.7%.

• Consolidated net leverage ratio increased to 3.9x, within the 3x–4x target range.

Outlook and guidance

• 2024 revenue guidance revised to $1,670M–$1,700M; Adjusted EBITDA to $900M–$920M; ALFCF to $250M–$270M.

• CapEx guidance for 2024 remains $300M–$370M, trending toward the lower end; net leverage target unchanged at 3.0x–4.0x.

• Margins expected to remain in the mid- to high-50% range for 2024, trending toward 60% over the next few years.

• Guidance reflects impact of renewed MTN Nigeria contracts, with an expected $30M–$35M negative impact on FY 2024 results.

• Organic revenue growth for 2024 expected at ~48% year-over-year at the midpoint.