IHS (IHS) Q4 2023 earnings summary

Executive summary

• FY23 revenue rose 8.4% to $2,125.5M and Adjusted EBITDA increased 9.9% to $1,132.5M; $615.7M of FX headwinds partly offset $723.1M organic growth. Net loss was $1,988.2M, largely reflecting unrealized financing FX losses.

• Q4 revenue was $509.8M, down 3.1% reported but up 48.4% organically; Adjusted EBITDA increased 0.6% to $274.2M, while net loss widened to $456.8M.

• Portfolio reached 40,075 towers across three continents; 1,329 sites were built in 2023, including 812 in Brazil and 237 in Nigeria.

Financial highlights

• FY23 ALFCF rose 19.2% to $432.8M, with cash conversion of 38.2%, up 300 bps; Q4 ALFCF increased 22.0% to $118.2M and cash conversion rose 750 bps to 43.1%.

• Adjusted EBITDA margin was 53.3% for FY23, up 70 bps, and 53.8% in Q4, up 200 bps.

• Q4 revenue fell $16.4M YoY as $271.8M in FX headwinds, including $267.4M from Naira devaluation, outweighed $254.8M of organic growth.

• FY23 cash from operations was $902.9M versus $966.9M; Q4 cash from operations was $162.1M versus $289.3M. FY23 capex was $586.0M, down 7.5% YoY.

• FY23 revenue included $48M of one-off Nigerian revenue adjusted for withholding tax; Project Green FY spend was $103.4M, above guidance, and generated ~$24M in ALFCF savings.

Outlook and guidance

• FY24 guidance: revenue $1,700M–$1,730M; Adjusted EBITDA $935M–$955M; ALFCF $285M–$305M; capex $330M–$370M; net leverage 3.0x–4.0x.

• Guidance implies ~49% organic revenue growth and assumes an average NGN/USD rate of 1,610; it excludes South African power pass-through revenue.

• Expected Naira devaluation impact is a $535M FY24 revenue headwind after FX resets; indicative full-year impact of a 10% devaluation is $40M–$45M lower revenue and $25M–$30M lower Adjusted EBITDA.

• FY24 BTS guidance is ~850 sites, including ~600 in Brazil; capex includes ~$10M of remaining Project Green investment.