IHS (IHS) Q4 2022 earnings summary

Executive summary

• FY22 revenue rose 24.2% to $1,961.3m, with organic growth of 19.5%; Adjusted EBITDA increased 11.3% to $1,031.4m.

• Net loss widened to $470.4m from $26.1m, mainly reflecting higher finance costs, FX losses, interest expense, diesel costs and a $121.6m goodwill impairment.

• Tower count grew 27.7% to 39,652 across 11 markets, primarily through acquisitions in South Africa and Brazil; tenants increased 26.2% to 58,573.

• Strategy remains focused on organic utilization, selective acquisitions, new sites and Project Green, while higher capital costs and FX risk are prompting greater acquisition caution.

Financial highlights

• Revenue was $1,961.3m, up 24.2%; organic growth was $307.4m, or 19.5%, while inorganic growth was $151.5m, partly offset by a $77.3m FX translation impact.

• FY22 included $18.0m of non-recurring revenue from an agreement with a Nigerian key customer; FY21 included $24.2m of non-recurring revenue.

• Operating profit fell to $312.4m from $388.4m; finance costs rose to $872.0m from $422.0m, driving the $470.4m net loss.

• Adjusted EBITDA was $1,031.4m, up 11.3%; FY21 included $60.7m of non-recurring revenue and cost reversals affecting the comparison.

• Net cash from operating activities rose to $907.3m from $750.2m; investing cash outflow was $1,517.3m, and cash ended the year at $514.1m.

Outlook and guidance

• 2023 priorities include sustaining double-digit growth through existing-site utilization, build-to-suit towers, strategic projects and process efficiency; capital deployment is to remain prudent.

• Project Green capex is expected at $90m–$100m in 2023, within a planned ~$214m investment for 2022–2024; 2022 spend was $103.6m.

• Project Green is intended to deliver almost half of the 2030 tower emissions-intensity reduction target by 2026; the 2030 goal is approximately 50% below the 2021 baseline.

• Available liquidity and operating cash were assessed as sufficient for operating needs, debt service, capex and organic growth over the next 12 months, subject to business and market conditions.

• Acquisitions remain part of the strategy, but higher cost of capital and FX risk have led to a more cautious approach focused on long-term value.