IHS Towers, the tower operating unit of IHS Holding Limited (NYSE: IHS), is among the leading multinational, independent tower companies in the world. The company reported that its tower inventory reached 39,052 towers at the end of 2Q22. That figure is up 29 percent year-over-year from 30,207 at the end of 2Q21 on the strength of major acquisitions in South Africa and Latin America, and an active build-to-suit program in which the company constructed 240 towers in 2Q22 and over 1,200 towers in the past 12 months.
IHS has four operating segments across three continents: Nigeria is its largest single market with 16,738 towers; Sub-Saharan Africa (SSA) includes South Africa, Côte d’Ivoire, Cameroon, Zambia, and Rwanda with a total of 13,729 towers; Latin America (Latam) encompassing Brazil, Colombia, and Peru adds another 7,139 sites; and the Middle East and North Africa (MENA) includes Kuwait with 1,446 towers.
Originally a spinoff from mobile network operator, MTN, in Nigeria, IHS is the leading towerco in Nigeria and in SSA where MTN is typically the biggest MNO. With over 6,859 towers in Brazil, its second largest market, IHS also claims the third place towerco position in the country behind American Tower and SBA Communications.
The company added tenants, reaching 57,381 at the end of the quarter, a 26 percent YoY increase, giving it an average colocation ratio of 1.47 tenants per tower. During the quarter, IHS negotiated nearly 31,000 amendments on existing leases, an activity that was up 43 percent compared to lease amendment activity in 2Q21.
IHS reported total 2Q22 revenue of $468 million, up 16 percent YoY from $402 million in 2Q21. By operating segment, Nigeria accounted for 69 percent of revenue, SSA was 20 percent, Latam accounted for nine percent and MENA was 2 percent. Adjusted EBITDA declined 13 percent YoY to $239 million due to impacts of higher fuel prices.
The company is still heavily dependent on fuel oil for diesel generators to provide primary power or backup power at over 50 percent of its tower sites in developing countries where the power grid reliability generally is poor. IHS continues to upgrade a portion of its portfolio with hybrid solar power and batteries and grid connectivity where possible.
Capex for the quarter was $147 million compared to $76 million for 2Q21. The higher capex mainly was driven by activity associated with an MNO license renewal in Cameroon, refurbishment associated with the MTN South Africa acquisition, fiber deployments in Latam, and new site builds in Nigeria.
IHS’s outlook for full-year 2022 incorporates the GTS SP5 acquisition in March 2022 and the MTN South Africa acquisition in May 2022, as Inside Towers reported. However, it reduced its planned tower build program for the year to about 1,750 sites with big reductions in Nigeria and Brazil, mainly due to timing and overall soft market conditions.
IHS now expects 2022 revenues to be in the $1.885-1.905 billion range, up from the previous estimate of $1.875-1.895 billion. Adjusted EBITDA guidance in the $1.005-1.025 billion range is unchanged. Total capex is still expected to be in the $545-585 million range, up markedly from the $402 million invested in 2021.
By John Celentano, Inside Towers Business Editor
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