IHS Holding Limited (NYSE: IHS), the parent company of IHS Towers, an emerging markets tower company focused on Africa and Latin America, today announced its Q1 2022 earnings and revised outlook for 2022, as well as updates on its tower portfolio, and key markets where the company is building new towers.

Financial Performance in Q1 2022 – IHS Holding

In Q1 2022, IHS Holding reported revenue of $446.1m, a 7.3% increase quarter-over-quarter, and adjusted EBITDA of $244.9m, a 13.0% increase quarter-over-quarter. Therefore, the company’s adjusted EBITDA margin was 54.9% in Q1 2022, a 2.8% improvement quarter-over-quarter.

IHS Holding’s organic revenue growth was 21.5% year-over-year, which was driven primarily by a combination of an increase in escalators, power indexation, foreign exchange resets, and lease amendments.

Below is a further breakdown of IHS Holding’s tower count, revenue, and adjusted EBITDA by region:

IHS Holding – Key Performance Indicators – as of Q1 2022
RegionTowersRevenueEBITDA
Nigeria16,856$320.7m$203.0m
Sub-Saharan Africa7,930$85.6m$47.0m
Latin America7,065$31.2m$22.1m
MENA1,424$8.6m$3.6m
Other-$30.9m
Total33,275$446.1m$244.9m

As shown above, Nigeria is IHS Holding’s largest and most important market, representing 51% of towers, 72% of revenue, and 83% of EBITDA. In Nigeria, the company’s revenue increased ~23% year-over-year and 27% on an organic basis. To this end, over the past 12 months, IHS has completed 8.3k lease amendments in Nigeria related largely to 4G upgrades – which has been a key revenue driver.

Still, IHS is pursuing a diversification strategy. Therefore, pro forma for acquisitions, ~43% of the company’s towers and ~64% of its total revenue will derive from Nigeria.

Outlook for 2022

IHS Holding increased its full-year 2022 outlook for revenue by $80m (up 4.4%) and adjusted EBITDA by $45m (up 4.6%), as compared to the company’s prior outlook in Q4 2021. This increase was primarily due to the company’s inclusion into its outlook of its pending acquisition of 5.7k towers in South Africa from MTN, which IHS assumes will close by June 1, 2022 (i.e., a 7-month contribution in 2022).

Full-Year 2022 Outlook – as of May 2022
$ in millionsLowHighMid-Point% Raised
Revenue$1,875$1,895$1,8854.4%
Adjusted EBITDA$1,005$1,025$1,0154.6%

For full-year 2022, IHS Holding provides an outlook for revenue of $1.875bn to $1.895bn. Additionally, the company forecasts adjusted EBITDA of $1.005bn to $1.025bn, implying a 53.8% adjusted EBITDA margin. Finally, the mid-point of IHS Holding’s 2022 outlook infers a year-over-year increase of 19% and 9.6% in revenue and adjusted EBITDA, respectively.

In terms of capital expenditures, IHS Holding expects to spend between $545m to $585m for 2022. This spend includes an allowance for the company to construct a total of ~2.35k build-to-suit (BTS) sites. Geographically, these sites are distributed as follows: Nigeria (~1.25k sites), Brazil (~700 sites), Sub-Saharan Africa (~270 sites), and Middle East/North Africa (MENA) (~110 sites).

Operational Performance in Q1 2022 – IHS Holding

IHS Holding’s total portfolio comprised 33.3k owned and managed tower sites as of Q1 2022. Specifically, these sites have a tenancy ratio of 1.49x, equating to 49.6k tenants with equipment on the company’s towers.

As shown below, pro forma for pending acquisitions, IHS will operate 39.0k tower sites in 11 total countries.

IHS Holding – Tower Portfolio Map – Pro Forma
IHS Holding Total Tower Portfolio Pro Forma Map Q1 2022

IHS’ sites will span 7 countries in Africa, 3 countries in Latin America, and 1 country in the Middle East. Overall, the company’s top five markets by tower count include Nigeria (16.9k sites), Brazil (6.8k sites), South Africa (5.7k sites), Côte d’Ivoire (2.7k sites), and Cameroon (2.2k sites).

Portfolio Growth

During Q1 2022, IHS Holding added 2.2k towers to its portfolio, while securing 3.2k net tenancy additions. The vast majority of this portfolio growth came from IHS completing its acquisition of 2.1k towers in Brazil from Grupo TorreSur in March 2022.

Additionally, in Q1 2022, the company built 203 sites, including 100 towers in Nigeria and 41 in Latin America (all in Brazil).

IHS Holding – Towers Built
IHS Holding Towers Built by Region Q1 2022
Adam Simmons covers Towers for Dgtl Infra, including American Tower (NYSE: AMT), Crown Castle (NYSE: CCI), SBA Communications (NASDAQ: SBAC), Cellnex Telecom (BME: CLNX), Vantage Towers (ETR: VTWR), IHS Holding (NYSE: IHS), and many more. Within Towers, Adam focuses on the sub-sectors of ground-based cell towers, rooftop sites, broadcast / radio towers, and 5G.

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