IHS Towers records 9% decline in income, blames naira devaluation

IHS Towers, the world’s fifth-largest unbiased TowerCo, stated the naira’s devaluation in June this 12 months price it $31 million. The firm has revised the anticipated income for the 12 months downwards however is not going to change how a lot it plans to spend. 

After 4 consecutive quarters of income progress, IHS Towers recorded a 9.4% decline in comparison with Q1 2023. IHS says the decline in income, which put it $46 million beneath the final quarter’s income was as a result of naira’s devaluation. “Our expectation for revenue would have otherwise increased by $31 million had the average FX rates previously assumed in our guidance remained unchanged,” Sam Darwish, IHS Chairman and CEO, stated in an announcement.

“We are encouraged by the recent policy changes implemented in Nigeria that are intended to put the country on a better economic path. In the near-term, however, these changes will cause some anticipated friction, including the significant devaluation of the Nigerian Naira that occurred in mid-June,” the assertion learn in half.

67% of IHS Towers’ income in the second quarter of 2023 got here from Nigeria, the most important market of the telco infrastructure firm, which additionally operates in 10 different international locations, together with Brazil, South Africa, Zambia, Egypt and Kuwait, its Middle Eastern foothold.

In June, Nigeria’s new president, Bola Tinubu, instituted reforms that despatched financial institution shares and native costs hovering. The determination to loosen controls on alternate charges hit a number of corporations working in Nigeria, which reported decrease revenues on the again of getting to restate numbers in line with the newly managed floating naira-dollar charges.

IHS Towers’ largest buyer in its largest market, MTN Nigeria, additionally reported a overseas alternate loss in its 2023 second-quarter report which dragged earnings for the interval down by 64%. IHS Towers and MTN Group are locked in a boardroom struggle over MTN’s request for extra management of the tower firm. MTN Group holds 26% of IHS Towers however solely controls 20% of the voting share.

However, the naira’s devaluation was not all dangerous information for IHS Towers because it decreased its debt by $155 million. On the opposite hand, the corporate’s money stability was decreased by $19 million as a result of devaluation. 

IHS evaluations and resets alternate charges quarterly. The firm expects to have a clearer image of the naira’s devaluation by the top of the 12 months.