IHS Towers posts $127.8m revenue from SSA in Q2 but global challenges persist

IHS Towers, a global leader in shared communications infrastructure, has released its Q2 2025 earnings today, and the Sub-Saharan Africa (SSA) segment delivered standout results, with strong revenue growth driven by organic expansion. However, the company’s overall financial performance faced headwinds, including currency volatility and margin pressures. 

The SSA segment reported $127.8 million in revenue for Q2 2025, up 18.1% year-over-year. Organic growth drove this surge, reaching 16.1%. Key contributors included new colocation agreements, lease amendments, and new site deployments. Power indexation and foreign exchange resets also bolstered revenue, helping mitigate currency volatility in markets like Nigeria. 

SSA remains IHS’s largest segment, reflecting the region’s growing demand for mobile connectivity. With over 644 million people across its markets, IHS is capitalising on digital inclusion trends as mobile network operators (MNOs) expand 4G and 5G networks.

Despite revenue gains, adjusted EBITDA in SSA fell 4.3% to $73.1 million, with a margin of 57.2%. Currency devaluation, particularly the Nigerian Naira’s volatility, was a major factor. 

The earnings report notes a $40.6 million negative impact on adjusted EBITDA due to naira devaluation compared to Q2 2024. Rising power costs also pressured profitability. IHS’s efforts to reduce diesel reliance through solar-powered sites are ongoing but have yet to fully offset these challenges.

IHS Towers’ consolidated financials for Q2 2025 reflect a complex picture. Total revenue reached $433.3 million, a 0.5% year-over-year decrease from Q2 2024. 

Organic growth contributed 11.8%, driven by SSA and other regions like the Middle East and North Africa (MENA). However, currency devaluation across multiple markets offset some gains. 

Consolidated adjusted EBITDA was $219.2 million, down 7.8% year-over-year. The adjusted EBITDA margin contracted to 56.0% from 63.5% in Q2 2024. This decline reflects currency headwinds and higher operational costs. Nigeria, which accounts for a significant portion of revenue, saw a 29.7% negative impact on adjusted EBITDA due to naira devaluation. Other regions, including LatAm and MENA, also faced challenges, though SSA’s growth partially offset these.

Loss for the period widened to $1.0 billion, compared to $1.1 billion in Q2 2024. A significant driver was a $1.1 billion loss on embedded derivatives linked to convertible instruments. 

Net debt rose to $3.9 billion, with a consolidated net leverage ratio of 3.4x, within the company’s 3.0x-4.0x target. Adjusted Levered Free Cash Flow (ALFCF) for Q1 2025 was $149.9 million, up 247.7% year-over-year, signalling improved cash flow generation.

IHS Towers’ operational highlights and strategic moves

IHS Towers operates 39,212 towers across eight markets, with 59,606 tenants and a colocation rate of 1.52x as of Q1 2025. SSA dominates, with over 16,000 towers in Nigeria alone. Lease amendments grew to 39,705, boosting revenue through additional equipment or services on existing towers. A key strategic win was the renewal of a Master Lease Agreement with Airtel Zambia, covering 1,100 tenancies until August 2035. This deal ensures long-term revenue stability and strengthens IHS’s partnerships with MNOs.

The company is also optimising its portfolio. In May 2025, IHS agreed to sell its Rwanda operations for $274.5 million, following divestitures in Peru and Kuwait in 2024. These moves aim to reduce debt and focus on high-growth markets like SSA. Capital expenditure (Total Capex) fell 17.8% in Q1 2025, a trend likely continuing into Q2, supporting cash flow and financial discipline.

Sub-Saharan Africa is a bright spot for IHS, driven by rising smartphone penetration and datat demand. Nigeria’s recent carrier tariff increases and improved Naira stability signal a positive outlook. 

The Central Bank of Nigeria’s adoption of the Bloomberg BMatch platform could enhance USD availability, easing currency pressures. However, challenges remain. Currency volatility, particularly in Nigeria, continues to impact profitability. Power costs and geopolitical risks also pose threats. IHS’s ability to manage these will determine its success in sustaining SSA’s growth.

Globally, IHS faces similar challenges. Currency devaluation in the LatAm and MENA regions affected the performance. The company’s focus on organic growth, rather than acquisitions, aligns with its goal of improving profitability. However, scaling sustainability initiatives, like solar-powered towers, is critical to reducing costs and meeting ESG goals.

IHS reiterated its full-year 2025 guidance, projecting revenue of $1.68-$1.71 billion and adjusted EBITDA of $960-$980 million. 

Organic revenue growth is expected at 12%, with ALFCF of $350-$370 million and total capex of $260-$290 million. SSA’s strong performance underpins this optimism, though currency and cost pressures could challenge these targets. The company’s focus on cash flow and portfolio optimisation supports its long-term strategy.