Q2 2024 IHS Holding Ltd Earnings Call

Speaker Change: [inaudible]

Operator: Good day, and welcome to the IHS Hldg Limited 2nd Quarter 2024 Earnings Results Call for the 3 month period ended June 30, 2024. Please note that today's conference is being webcast and recorded. If you would like to ask a question, please press the star and then the number one on your telephone keypad at any time. At this time, I'd like to turn the conference over to Naya Bermudez. Please do

Speaker Change: In the next episode, we'll see you in the next video.

Speaker Change: Good day and welcome to the IHS Olding Limited second quarter 2024 earnings results call for the three month period ended June 30, 2024. Please note that today's conference is being webcast and recorded. If you would like to ask a question, please press star and then the number one on your telephone keypad at any time. At this time, I'd like to turn the conference over to Naya Bermudez. Please go ahead.

Nia Bermuda: Thank you, operator. Thanks also to everyone for joining the call today. I'm Nia Bermuda, the Senior Manager of Investor Relations here at IHS. With me today are Sam Darwish, our Chairman and CEO, and Steve Howden, our CFO. This morning, we filed our unaudited financial statements for the three-month period ended June 30, 2024, with the SEC, which can also be found on the Investment Relations section of our website. We also issued a related earnings release, presentation, and supplemental deck. These are the consolidated results of IHS Hldg Ltd., which is listed on the New York Stock Exchange under the ticker symbol IHS and which comprises the entirety of the group's operation.

Naya Bermudez: Thank you, Operator. Thanks also to everyone for joining the call today. I'm Naya Bermudez, Senior Manager of Investor Relations here at IHS. With me today are Sam Darwish, our Chairman and CEO, and Steve Howden, our CFO.

Speaker Change: This morning we published our unaudited financial statements for the three-month period ended June 30, 2024 with the SEC, which can also be found on the Investment Relations section of our website.

Speaker Change: We also issued a related earnings release, presentation, and supplemental deck. These are the consolidated results of IHS Holding Limited, which is listed on the New York Stock Exchange under the ticker symbol IHS and which comprises the entirety of the group's operations.

Nia Bermuda: Before we discuss the results, I would like to draw your attention to the disclaimer set out at the beginning of the presentation on slide 2, which should be read in full along the cautionary statements regarding forward-looking statements set out in our earnings release and 6-K filed as well today. In particular, the information to be discussed may contain forward-looking statements, which, by their nature, involve known and unknown risks, uncertainties, and other important factors, some of which are beyond our control, are difficult to predict, and other factors which may cause actual results, performance, or achievements, or industry results to be materially different from any future results, performance, or achievements, or industry results expressed or implied by such forward-looking statements, including those discussed in the Risk Factors section of our Form 20-F filed with the Securities and Exchange Commission and our other filings with the SEC.

Speaker Change: Before we discuss the results, I would like to draw your attention to the disclaimer set out at the beginning of the presentation on slide 2, which should be read in full along the cautionary statements regarding forward-looking statements set out in our earnings release and 6K filed as well today.

Speaker Change: In particular, the information to be discussed may contain forward-looking statements which, by their nature, involve known and unknown risks.

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Speaker Change: and other important factors, some of which are beyond our control, are difficult to predict, and other factors which may cause actual results, performance, or achievements.

Speaker Change: or industry results to be materially different from any future results.

Speaker Change: performance or achievements or industry results expressed or implied by such forward-looking statements, including those discussed in the risk factors section of our Form 20-F, filed with the Securities and Exchange Commission, and our other filings with the SEC.

Nia Bermuda: We'll also refer to non-IFRS measures, including Adjusted EBITDA that we view as important in assessing the performance of our business and ALFCF that we view as important in assessing the liquidity of our business. A reconciliation of non-IFRS metrics to the nearest IFRS metrics can be found in our earnings presentation, which is available in the investor relations section of our website. And with that, I'd like to turn the call over to Sam Darwish, our chairman and CEO.

Speaker Change: We'll also refer to non-IFRS measures, including Adjusted EBITDA that we view as important in assessing the performance of our business and ALFCF that we view as important in assessing the liquidity of our business.

Speaker Change: A reconciliation of non-IFRS metrics to the nearest IFRS metrics can be found in our earnings presentation which is available on the Investor Relations section of our website. And with that, I'd like to turn the call over to Sam Darwish, our Chairman and CEO.

Sam Darwish: Thanks, Naya, and welcome everyone to our second quarter 2024 earnings results call. We're reporting solid performance on revenue, adjusted EBITDA, and ALFCF, while CAPEX decreased meaningfully. This quarter, we began putting the negative impacts of the January 2024 Naira devaluation in the rearview mirror as we started to realize more of the benefits of the forex resets in our revenue contracts and saw a significant step up in adjusted EBITDA and adjusted EBITDA margin from the first quarter.

Sam Darwish: Thanks, Naya, and welcome everyone to our second quarter 2024 earnings results call.

Speaker Change: We're reporting solid performance on revenue, adjusted EBITDA and ALFCF, while CAPEX decreased meaningfully.

Speaker Change: This quarter, we began putting the negative impacts of the January 2024 Naira devaluation in the rearview mirror as we started to realize more of the benefits of the forex resets in our revenue contracts and saw a significant step up in adjusted EBITDA and adjusted EBITDA margin from the first quarter.

Sam Darwish: The reduction in CAPEX reflects the actions we're taking to generate more cash and narrow our focus to projects that we believe will deliver the highest returns on the main goals of our ongoing strategic review, which I will discuss in more detail shortly.

Speaker Change: The reduction in CapEx reflects the actions we're taking to generate more cash and narrow our focus to projects that we believe will deliver the highest returns, two of the main goals of our ongoing strategic review, which I will discuss in more detail shortly.

Sam Darwish: We've made important progress on commercial matters in the quarter with the extension of our contract with MTN South Africa through 2034 and the renewal of contracts with MTN Rwanda also through 2034. And most notably, just last week, we announced a significant milestone in our long-term commercial relationship with MTN in Nigeria. We renewed and extended all our tower contracts with MTN in Nigeria through 2032, covering nearly 13,500 tenancies and approximately 23,800 lease amendments. This also includes 1,430 of approximately 2,500 tenancies that were due to expire in 2024 and 2025 but will now remain with IHS Nigeria.

Speaker Change: We've made important progress on commercial matters in the quarter with the extension of our contract with MTN South Africa through 2034 and the renewal of contract with MTN Rwanda also through 2034.

Speaker Change: And most notably, just last week, we announced a significant milestone in our long-term commercial relationship with MTN in Nigeria.

Speaker Change: We renewed and extended all our tower contracts with MTN in Nigeria through 2032, covering nearly 13,500 tenancies and approximately 23,800 lease amendments.

Speaker Change: This also includes 1,430 of approximately 2,500 tenancies that were due to expire in 2024 and 2025, but will now remain with IHS Nigeria.

Sam Darwish: Over the last month, we have renewed or extended all 26,000 tenures with MTN in addition to approximately 26,000 lease amendments across six countries into the next decade. With the MTN renewals completed, we can now focus on value creation and operational efficiency. We now have approximately $12.3 billion of contracted revenues with an average remaining tenant term of more than eight years.

Speaker Change: Over the last month, we have renewed or extended all 26,000 tenancies with MTN, in addition to approximately 26,000 lease amendments across six countries into the next decade.

Speaker Change: With the MTN renewals completed, we can now focus on value creation and operational efficiencies. We now have approximately 12.3 billion dollars of contracted revenues with an average remaining tenant term of more than eight years.

Sam Darwish: Let me also touch on some of our financial highlights in the court. We saw a revenue increase by 4% and an adjusted EBITDA increase by 35% from Q1 2024 as we saw our contract resets kick in. Organic growth for the quarter versus Q2 2023 was 69%. Groupwide, we added net 385 tenants, 1566 lease amendments, and built 207 towers, including 136 in Brazil. For the remainder of the year, we expect strong performance in our KPIs, and the underlying trends driving our business remain healthy, and the higher adjusted EBITDA margins continue after the dip in Q1 margins emanating from the January 2024 evaluation in Nigeria. During the quarter, the average forex rate for the US dollar to the NERA was 1392.

Speaker Change: Let me also touch on some of our financial highlights in the quarter.

Speaker Change: We saw revenue increase by 4% and adjusted EBITDA increase by 35% from Q1 2024 as we saw our contract resets kick in.

Speaker Change: Organic growth for the quarter versus Q2 2023 was 69%. Groupwide, we added net 385 tenants, 1,566 lease amendments, and built 207 towers, including 136 in Brazil.

Speaker Change: For the remainder of the year, we expect strong performance in our KPIs, as the underlying trends driving our business remain healthy and the higher adjusted EBITDA margins continue after the dip of Q1 margins emanating from the January 2024 devaluation in Nigeria.

Sam Darwish: As the Nigerian Forex market gradually stabilizes, we continue to see USD availability and more favorable conditions to force and upstream US dollars into the group. Turning to slide 7, as you can see, we are in a great position, having renewed and extended all tower contracts with MTN in Nigeria and across our other African markets. In Nigeria, we renewed nearly 13,500 tenants through 2032, which included 1,430 out of the approximate 2,500 sites that were due to expire in 24 and 25.

Speaker Change: During the quarter, the average forex trade for the U.S. dollar to the Naira was $1,392. As the Nigeria forex market gradually stabilizes, we continue to see USD availability and more favorable conditions to source and upstream U.S. dollars to the group.

Speaker Change: Turning to slide 7, as you can see, we are in a great position, having renewed and extended all tower contracts with MTN in Nigeria and across our other African markets.

Speaker Change: In Nigeria, we renewed nearly 13,500 tenancies through 2032, which includes 1,430 out of the approximate 2,500 sites that were due to expire in 2024 and 2025, bringing our total tenant count in Nigeria to over 25,000.

Sam Darwish: Bringing our total tenant count in Nigeria to over 25,000. Please remember, we also signed a multi-year 3,950 tenant rollout agreement with Erther Nigeria in February, which also included a three-year contract extension. The agreement with MTN in Nigeria, together with the recent renewals between IHS and MTN Group across all six African markets covering approximately 26,000 sites Nigeria, Cameroon, Rwanda, Zambia, Codiva, and South Africa, where we both do business, demonstrates how the two companies are set to work collaboratively to continue delivering mobile connectivity across Africa. Building on our 20-plus-year relationship as commercial partners, both companies will leverage our shared operations excellence and engineering expertise Together, IHS Towers and MTN Group have a track record of navigating complex operating environments and challenging microeconomic conditions to deliver connectivity crucial to economic growth and digital inclusion.

Speaker Change: Please remember, we also signed a multi-year 3,950-tenant rollout agreement with Airtel Nigeria in February, which also included a three-year contract extension.

Speaker Change: The agreement with MTN in Nigeria together with the recent renewals between IHS and MTN group across all six African markets covering approximately 26,000 tenancies

Speaker Change: Nigeria, Cameroon, Rwanda, Zambia, Cote d'Ivoire, and South Africa, where we both do business, demonstrates how the two companies are set to work collaboratively to continue delivering mobile connectivity across Africa.

Speaker Change: Building on our 20-plus year relationship as commercial partners, both companies will leverage our shared operations excellence and engineering expertise to meet the end-users' increasingly sophisticated data demands.

Speaker Change: Together, IHS Towers and MTN Group have a track record of navigating complex operating environments and challenging macroeconomic conditions to deliver connectivity crucial to economic growth and digital inclusion.

Sam Darwish: I want to commend our Nigerian team and their commercial colleagues for their efforts to get this agreement across the line and find a solution that helps secure our long-term financial stability. The renewed contract provides a more sustainable split between local and foreign currency and introduces a new diesel link component that better shares the risk of potential fluctuations in the value of the Naira and the cost of diesel. With the introduction of a power indexation element in Nigeria and the unwinding of our power managed services in South Africa, we are now much more protected against energy price fluctuations as a company.

Speaker Change: I want to commend our Nigerian team and their commercial colleagues for their efforts to get this agreement across the line and find a solution that helps secure our long-term financial stability.

Speaker Change: Renewed contracts provide a more sustainable split between local and foreign currency and introduces a new diesel link component that better shares the risk of potential fluctuations in the value of the Naira and the cost of diesel.

Speaker Change: With the introduction of a power indexation element in Nigeria and the unwind of our power-managed services in South Africa, we are now much more protected against energy price fluctuations as a company.

Sam Darwish: The renewal is a testament to the valued relationship with MTN and our commitment to work together to mitigate the impacts of global macro conditions and broaden mobile connectivity through our critical infrastructure. We continue to believe in the vast opportunities in Nigeria and look forward to working with MTN to enable critical communication services and mobile connectivity, as well as address increasing data demands in this fast growing market. In addition to commercial milestones, we are making great progress across a number of our initiatives. Let's turn to slide 8 to look at some of the highlights.

Speaker Change: The renewal is a testament to the valued relationship with MTN and our commitment to work together to mitigate the impacts of global macro conditions and broaden mobile connectivity through our critical infrastructure.

Speaker Change: We continue to believe in the vast opportunity in Nigeria and look forward to working with MTN to enable critical communication services and mobile connectivity as well as address increasing data demands in this fast-growing market.

Speaker Change: In addition to commercial milestones, we are making great progress across a number of our initiatives.

Sam Darwish: As it relates to our strategic review of unlocking shareholder value versus our existing suppressed valuation, we are starting to deliver on elements such as improving our governance framework as evidenced by the positive outcome of our 24 ATM and resolving our commercial matters as reflected by the comprehensive contract renewals with MTN. In addition, we continue to focus on increasing our operating profitability and substantially reducing our capital to improve cash flow generation. Thank you very much.

Speaker Change: Let's turn to slide 8 to look at some of the highlights.

Speaker Change: As it relates to our strategic review of unlocking shareholder value versus our existing suppressed valuation,

Speaker Change: We are starting to deliver on elements such as improving our governance framework, as evidenced by the positive outcome of our 24 AGM, and resolving our commercial matters as reflected by the comprehensive contract renewals with MTN.

Speaker Change: In addition, we continue to focus on increasing our operating profitability and substantially reducing our capex to improve cash flow generation.

Sam Darwish: We are assessing group-wide costs and CAPEX structures, including how we can introduce more technology, especially artificial intelligence, into our ways of working to help us realize efficiency. During the quarter, we also reorganized our Brazilian operations, increasing the levels of integration between our tower business and fiber business. This will provide not only cost efficiencies but also speed-to-market benefits as well. We are beginning to see the impact of this overall efficiency improvement in our Q2-24 results, and our 24 guidance implies a continuation of higher margins versus 23. Additionally, we continue to examine our portfolio of markets to determine the right composition for IHS going forward.

Speaker Change: We are assessing group-wide costs and CAPEX structures, including how we can introduce more technology, especially artificial intelligence, into our ways of working to help us realize efficiencies.

Speaker Change: During the quarter, we also reorganized our Brazilian operations, increasing the levels of integration between our tower business and fiber business. This will provide not only cost efficiencies, but also speed to market benefits as well.

Speaker Change: We are beginning to see the impact of this overall efficiency improvement in our Q2-24 results, and our 24 guidance implies continuation of higher margins versus 23.

Speaker Change: Additionally, we continue to examine our portfolio of markets to determine the right composition for IHS going forward.

Sam Darwish: As previously indicated, this will include raising proceeds with a target of 500 million to a billion dollars. The capital raised from these initiatives will primarily be allocated to reduce debt, while also considering share buybacks and or introducing a dividend policy. As a reminder, these initial targets do not rule out additional initiatives we are assessing in parallel in our pursuit of increasing shareholder value. Moving on to governance, as I just mentioned, we are pleased that the proposals to amend the company's articles of association were approved by shareholders at the AGM held in June. The voting results mark a significant achievement for IHS, better aligning our governance framework with that of mature U.S. listed companies.

Speaker Change: And as previously indicated, this will include raising proceeds with a target of $500 million to $1 billion.

Speaker Change: The capital raised from these initiatives will primarily be allocated to reduce debt, while also considering share buybacks and or introducing a dividend policy. As a reminder, these initial targets do not rule out additional initiatives we are assessing in parallel in our pursuit of increasing shareholder value.

Speaker Change: Moving on to governance, as I just mentioned, we are pleased that the proposals to amend the company's articles of association were approved by shareholders at the AGM held in June.

Speaker Change: The voting results mark a significant achievement for IHS, better aligning our governance framework with that of mature U.S. listed companies. With MTN, we remain engaged on any outstanding governance issues and anticipate a mutually agreeable resolution in due course.

Sam Darwish: With MTN, we remain engaged on any outstanding governance issues and anticipate a mutually agreeable resolution in due course. Moving to our balance sheet, which remains a top priority, we continue to remain comfortable as we actively pursue initiatives to extend maturities, manage interest expense, and shift more debt into local currency. At the end of the quarter, we had $746 million of available liquidity.

Speaker Change: Moving to our balance sheet, which remains a top priority, we continue to remain comfortable as we actively pursue initiatives to extend maturities, manage interest expense, and shift more debt into local currency.

Speaker Change: At the end of the quarter, we had $746 million of available liquidity. We continue to expect to remain within our target leverage range of 3-4 this year, albeit at the top end of the range.

Sam Darwish: We continue to expect to remain within our target leverage range of 3 to 4 this year, albeit at the top end of the range. I'd now like to provide an update on Nigeria's macro. Since the end of the first quarter, the Central Bank of Nigeria further increased the policy interest rate by 200 basis points to 26.75%.

Speaker Change: I'd now like to provide an update on Nigeria's macro.

Speaker Change: Since the end of the first quarter, the Central Bank of Nigeria further increased the policy interest rate by 200 basis points to 26.75%, initially in May and then again in July , as the CBN continues to combat inflation and remains focused on price stability in the country.

Sam Darwish: Initially in May and then again in July, as the CBN continues to combat inflation and remains focused on price stability in the country. We remain cautiously optimistic, as the Forex Market in Nigeria appears to have stabilized modestly, with the NIRAC closing at 1597 on August 9th, 2024. We continue to see US dollar availability in the country, which supported our sourcing of nearly $290 million a year to date, of which we have upstreamed approximately $94 million to the group during and after the second quarter. Market conditions permitting, we expect to have three more through the 2nd half of 2024.

Speaker Change: We remain cautiously optimistic as the forex market in Nigeria appears to have stabilized modestly, with the Naira closing at $15.97 on August 9, 2024.

Speaker Change: We continue to see U.S. dollar availability in the country, which supported our sourcing of nearly $290 million year-to-date, of which we have upstreamed approximately $94 million to group during and after the second quarter.

Speaker Change: Market conditions permitting, we expect to upstream more through the second half of 2024.

Sam Darwish: We continue to see US dollar availability in the country. Lastly, on Latham, we completed the sale of our Peru subsidiary to SBA Communications on April 30, 2024, and as noted earlier, we built 136 Towers in Brazil during the quarter for a total of 294 Towers years to date. We remain committed to Brazil, which is our second largest market and one of our fastest growing. We continue to drive strong operational results there and see significant ongoing growth opportunities. And with that, I will turn the call over to... Thanks Sam and hello everyone.

Speaker Change: Lastly, on LATAM, we completed the sale of our Peru subsidiary to SBA Communications on April 30, 2024, and as noted earlier, we built 136 towers in Brazil during the quarter, for a total of 294 towers year-to-date.

Steve: We remain committed to Brazil, which is our second largest market and one of our fastest growing. We continue to drive strong operational results there and see significant ongoing growth opportunities. And with that, I will turn the call over to Steve.

Steve Howden: Turning to slide 10, as Sam mentioned, here we show our Q2 performance. As you can see, both towers and tenants are up approximately 3% in Q2'24 versus Q2'23, while lease amendments again increased by double-digit percentages, positive signs of the fundamental underlying tenancy growth continuing across our key markets. The year-on-year financial performance in Q224, however, was impacted by the NIRD evaluation from an average rate of 508 NIRD to the dollar in Q2 of last year to 1,392 NIRD in Q2 of this year. Therefore, on a reported basis, revenue and adjusted EBITDA declined year over year.

Steve: Thanks Sam and hello everyone.

Steve: Turning to slide 10, as Sam mentioned, here we show our Q2 performance.

Steve: As you see, both towers and tenants are up approximately 3% in Q2'24 versus Q2'23, while lease amendments again increased by double-digit percentages, positive signs of the fundamental underlying tenancy growth continuing across our key markets.

Steve: The year-on-year financial performance in Q2'24, however, was impacted by the Naira devaluation from an average rate of 5.08 Naira to the dollar in Q2 of last year to 1,392 Naira in the second quarter of this year.

Steve: Therefore, on a reported basis, revenue and adjusted EBITDA declined year over year. However, as indicated last quarter, we now see a meaningful step-up in profitability as our revenue contract FX reset kicked in following the impact of the January devaluation of the NARA.

Steve Howden: However, as indicated last quarter, we now see a meaningful step up in profitability as our revenue contract FX recess kicked in following the impact of the January devaluation of the NARA. Specifically, in Q2, we saw revenue increase by 4% and adjusted EBITDA increase 35% from the first quarter of this year. In the first quarter of last year, revenue declined 20%, adjusted EBITDA decreased by 11.9%, and ALFCF fell by 9.6%, in each case on a reported basis, driven largely by the impact of the devaluation more than offsetting the strong organic growth. However, our adjusted EBITDA margin increased to 57.6%, a notable improvement year-over-year and quarter-over-quarter. The level of CapEx investment decreased by 73% in the quarter, driven by a significant pullback in CapEx across all ACT segments.

Steve: Specifically in Q2, we saw revenue increase by 4% and adjusted EBITDA increase 35% from the first quarter of this year.

Steve: First of the second quarter of last year, revenue declined 20%, adjusted EBITDA decreased by 11.9% and ALFCF fell by 9.6% in each case on a reported basis, and driven largely by the impact of the devaluation more than offsetting the strong organic growth.

Steve: However, our adjusted EBITDA margin increased to 57.6%, a notable improvement year over year and quarter over quarter.

Steve: A level of CapEx investment decreased by 73% in the quarter, driven by the significant pullback in CapEx across all Ag segments.

Steve Howden: And finally, our consolidated net leverage ratio increased to 3.9 times at the end of Q2, up 0.1 times versus Q1 of this year, and that's consistent with the expected increase we flagged following the Nigerian devaluation in January, but we remain and expect to remain within our three to four times leveraged targets as guided. Moving to slide 11, I wanted to provide some more color on the updated contract structure with MTN and how we have de-risked our power exposure.

Steve: And finally, our consolidated net leverage ratio increased to 3.9 times at the end of Q2, up 0.1 times versus Q1 of this year. And that's consistent with the expected increase we flagged following the Nigeria devaluation in January.

Steve: But we remain, and expect to remain, within our 3 to 4 times leverage targets as guided.

Steve: Moving to slide 11, and I wanted to provide some more colour on the updated contract structure with MTN and how we have de-risked our power exposure.

Steve Howden: On the left side, you see a comparison between our actual revenue by contract split for the second quarter 2024 and what it would have looked like after adjusting for new financial terms in the renewed contracts with MTN in Nigeria. Given those MTN-Nigeria agreements were signed in August 2024 post the quarter end, the impact of these changes is not included in the second quarter 2024 results. Despite the terms being effective from April 1, the initial impact will reflect on our third quarter results.

Steve: On the left side, you see a comparison between our actual revenue by contract split for the second quarter 2024 and what it would have looked like after adjusting for new financial terms in the renewed contracts with MTN in Nigeria.

Steve: Given those MTN-Nigeria agreements were signed in August 2024 post the quarter end, the impact of these changes are not included in the second quarter 2024 results.

Steve: Despite the terms being effective from April 1, the initial impact will reflect in our third quarter results.

Steve Howden: The new structure provides what we believe is a more balanced split between foreign and local currencies, and the newly introduced diesel-linked component acts as a hedge against diesel price and FX fluctuation. Our contracts have always had some level of shared risk, and under the new terms, there is a more balanced split whereby our USD exposure is reduced, but in return, we no longer own the risk of diesel price fluctuations, which is now passed on to MTN Nigeria through diesel indexation.

Speaker Change: The new structure provides what we believe is a more balanced split between foreign and local currencies and the newly introduced diesel-linked component acts as a hedge against diesel price and FX fluctuations.

Speaker Change: Our contracts have always had some level of shared risk, and under the new terms there is a more balanced split whereby our USD exposure is reduced, but in return we no longer own the risk of diesel price fluctuations which is now passed on to MTN Nigeria through diesel indexation.

Steve Howden: It's important to note that the USD component will continue to benefit from quarterly FX resets and annual US CPI-linked escalations, and the Local Currency component will continue to benefit from local CPI-linked escalations now applied every six months rather than annually. The significant change in introducing power indexation to our use fees with MTN in Nigeria, together with the unbundling of the backup power contract with MTN in South Africa, now means that IHS has moved its business model to being significantly hedged against power across its footprint. All our country businesses are now predominantly either power passthrough or have power indexation elements within their use fees. We believe these changes have materially reduced the risk of our operating model.

Speaker Change: It's important to note that the USD component will continue to benefit from quarterly FX resets and annual US CPI-linked escalations and the local currency component will continue to benefit from local CPI-linked escalations now applied every six months rather than annually.

Speaker Change: The significant change on introducing power indexation to our use fees with MTN in Nigeria, together with the unbundling of the backup power contract with MTN in South Africa, now means that IHS has moved its business model to being significantly hedged against power across our footprint.

Speaker Change: All our country businesses are now predominantly either power pass-through or have power indexation elements within their use fees. We believe these changes have materially reduced the risk of our operating model.

Steve Howden: And moving on, turning to our revenue on a consolidated basis, you can see how the continued devaluation turned a quarter of strong organic growth into a 20.3% decline. The 90 value of 63 and a half percent in Q224 versus last year, yet the business delivered organic growth of 69.3 percent, driven primarily by FX resets, Tico escalations, and power. Fiber, newly-sememented, and new colocation in new sites also contributed to organic growth this quarter and came from countries across our portfolio. [inaudible] The right side of the game shows you organic growth.

Speaker Change: And moving on, turning to our revenue on a consolidated basis, you can see how the continued devaluation turned a quarter of strong organic growth into a 20.3% decline.

Speaker Change: The Naira devalued 63.5% in Q2'24 versus last year, yet the business delivered organic growth of 69.3%, driven primarily by FX resets, CPI escalations and power.

Speaker Change: Fibre, new lease amendments, new co-location and new sites also contributed to organic growth this quarter and came from countries across our portfolio.

Steve Howden: The right side of the game shows you organic growth for each of our segments for the quarter, where our Nigeria segment grew approximately 105%, including a large benefit from FX reset. On slide 13, you can see our consolidated revenue, adjusted EBITDA, and adjusted EBITDA margins for the second quarter of 2024. As discussed, the Naira devaluation drove a 20% decrease in reported revenue in the quarter, despite the quarterly organic revenue growth of over 69% that again demonstrated the strong top-line growth trends of the business.

Speaker Change: The right side again shows the organic growth.

Speaker Change: of each of our segments for the quarter, where our Nigeria segment grew approximately 105%, including a large benefit from FX resets.

Speaker Change: On slide 13 you can see our consolidated revenue, adjusted EBITDA and adjusted EBITDA margins for the second quarter 2024.

Speaker Change: As discussed, the Naira devaluation drove a 20% decrease in reported revenue in the quarter, despite the quarterly organic revenue growth of over 69%, that again demonstrated the strong top-line growth trends of the business.

Steve Howden: In Q2'24, reported revenue includes a $15 million headwind quarter over quarter and a $478 million headwind year over year from the NIRA devaluation, but it's actually a net $159 million headwind after adjusting for the impact of FX resets over the past year. As we've previously noted, most of the FX resets on the USD-denominated portion of our Nigeria contracts reset quarterly, and therefore, our Q2-24 results now reflect the FX reset benefit from the late January devaluation.

Speaker Change: In Q2'24, reported revenue includes a $15 million headwind quarter over quarter and a $478 million headwind year over year from the NIRA devaluation, but it's actually a net $159 million headwind after adjusting for the impact of FX resets over the past year.

Speaker Change: As we've previously noted, most of the FX resets on the USD-denominated portion of our Nigeria contracts reset quarterly, and therefore our Q2-24 results now reflect the FX reset benefit from the late January devaluation.

Steve Howden: In the second quarter of 2024, adjusted EBITDA of $251 million decreased 12%, while our adjusted EBITDA margin of 57.6% was up 550 basis points from the prior year and up 1,330 basis points from the last quarter. The year-over-year changes in adjusted EBITDA and adjusted EBITDA margin primarily reflect the decrease in revenue, partially offset by a decrease in cost of sales, driven by a decrease in tower repairs and maintenance costs, along with lower power generation costs.

Speaker Change: In the second quarter of 2014, adjusted EBITDA of $251 million decreased 12%, while our adjusted EBITDA margin of 57.6% was up 550 basis points from the prior year and up 1,330 basis points from last quarter.

Speaker Change: The year-over-year changes in adjusted EBITDA and adjusted EBITDA margin primarily reflect the decrease in revenue, partially offset by a decrease in cost of sales, driven by a decrease in tower repairs and maintenance costs, along with lower power generation costs.

Steve Howden: On slide 14, we review our adjusted level 3 cash flow. In the second quarter of 2024, we generated ALFCF of $67 million, a 10% decrease versus last year, primarily due to a decrease in cash from operations post NARA devaluation and an increase in net interest paid, partially offset by a decrease in maintenance capex. ALSCF's cash conversion rate was 26.7%. Looking at CapEx, in the second quarter of 2024, CapEx of $54 million decreased 73% year-on-year.

Speaker Change: On slide 14, we review our adjusted level 3 cash flow.

Speaker Change: In the second quarter of 2024, we generated ALFCF of $67 million, a 10% decrease versus last year, primarily due to a decrease in cash from operations post NARA devaluation and an increase in net interest paid, partially offset by a decrease in maintenance capex.

Speaker Change: Our ALSCF cash conversion rate was 26.7%.

Speaker Change: Looking at CapEx, in the second quarter of 2024, CapEx of $54 million decreased 73% year-on-year.

Steve Howden: The decrease was driven by lower capital expenditure across all our segments, with the decrease in Nigeria primarily driven by decreases related to Project Green and maintenance CapEx, while the decrease in SSA was primarily driven by a decrease in refurbishment CapEx. The decrease in LATAM and MENA was primarily driven by decreases related to new site CAPEX, although we still retain a healthy level of new site build in Brazil. On the segment review on Slide 15, I want to add to Sam's earlier comments on what we're seeing in Nigeria. In May, the CBN raised interest rates by 150 basis points, followed by another 50 basis point increase in July, bringing the NPR to 26.7%. A total of 4 rate heights in 2024...

Operator: Good day and welcome to the IHS holding limited second quarter 2024 earnings results call for the three months period ended June 30, 2024. Please note that today's conference is being one for joining the call today.

Speaker Change: The decrease was driven by lower capital expenditure across all our segments, with the decrease in Nigeria primarily driven by decreases related to Project Green and maintenance capex, while the decrease in SSA was primarily driven by a decrease in refurbishment capex.

Speaker Change: The decrease in LATAM and MENA was primarily driven by decreases related to new site CAPEX, although we still retain a healthy level of new site build in Brazil.

Speaker Change: On the segment review on slide 15, I want to add to Sam's earlier comments on what we're seeing in Nigeria.

Nia Bermuda: I'm Nia Bermuda, Senior Manager of Investor Relations here at IHS. With me today, our send Darwish, our chairman and CEO and Steve Howden, our CFO. This morning we publish our unnoticed financial statements for the three month period and the June 30, 2024 with the SEC, which can also be found on the Investor Relations section of our website. We also issue a related earnings release, presentation and supplemental deck. These are the consolidated results of IHS holding limited, which is listed on the New York Stock Exchange under the ticker symbol IHS and which comprises the entirety of the group's operations.

Speaker Change: In May, the CBN raised interest rates by 150 basis points, followed by another 50 basis point increase in July, bringing the NPR to 26.7%, a total of four rate hikes in 2024.

Steve Howden: These actions appear to have had a positive impact on Nigeria's FX market, with the August 9th U.S. dollar to Naira Bloomberg rate at 1,597 Naira to the dollar. Most recently, the World Bank approved a $2.3 billion program for Nigeria as the government remains focused on stabilizing the economy with the aim of increasing dollar flow within the country, enhancing the attractiveness of Nigeria as a foreign direct investment destination, and improving transparency in the money market.

Speaker Change: These actions appear to have had a positive impact on Nigeria's FX market with the August 9th US dollar to Naira Bloomberg rate at 1,597 Naira to the dollar.

Speaker Change: Most recently, the World Bank approved a $2.3 billion program for Nigeria as the government remains focused on stabilizing the economy with the aim of increasing dollar flow within the country, enhancing the attractiveness of Nigeria as a foreign direct investment destination, and improving transparency in the money markets.

Steve Howden: There is still more to do, but as a result of these actions, we've seen an increase in US dollars in Nigeria, and FX reserves in the country increased to $34.2 billion at the end of June from $33.8 billion at the end of March. Since the FX environment adjusted in January and February, we were able to access nearly $290 million to settle U.S. dollar obligations locally in Nigeria and $94 million to the group during and after this second quarter.

Nia Bermuda: Before we discuss the results, I would like to draw your attention to the disclaimer set out at the beginning of the presentation on slide two, which should be read in full along the cautionary statements regarding forward-looking statements set out in our earnings release and 6K filed as well today. In particular, the information to be discussed may contain forward-looking statements which, by their nature, involve known and unknown risks, uncertainties, and other important factors, some of which are beyond our control are difficult to predict and other factors which may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking statements, including those discussed in the risk factor section of our form 20F filed with the Securities and Exchange Commission and our other findings with the SEC.

Speaker Change: There is still more to do, but as a result of these actions, we've seen an increase in U.S. dollars in Nigeria and FX reserves in the country have increased to $34.2 billion at the end of June from $33.8 billion at the end of March

Speaker Change: Since the FX environment adjusted in January and February, we were able to access nearly $290 million to settle US dollar obligations locally in Nigeria and upstream $94 million to group during and after this second quarter.

Steve Howden: We continue to expect to upstream more throughout the rest of the year. For IHS in Nigeria, second quarter revenue of $270 million decreased 26% year-on-year on a reported basis, reflecting that negative $478 million FX headwind year-over-year, more than offsetting the 105% organic growth, which was driven primarily by FX resets and escalation.

Speaker Change: We continue to expect to upstream more throughout the rest of the year.

Speaker Change: For IHS in Nigeria second quarter revenue of 270 million dollars decreased 26% year-on-year on a reported basis

Speaker Change: reflecting that negative $478 million FX headwind year over year.

Speaker Change: more than offsetting the 105% organic growth, which was driven primarily by FX resets and escalations.

Steve Howden: Nonetheless, a meaningful step up from last quarter. Our co-location rate improved to 1.6 times, up from 1.57 times in Q2 of last year. Lease amendments continue to be a strong driver of growth, increasing 6.8% year-on-year as our customers added additional equipment to our site. Q2-24 segment adjusted EBITDA in Nigeria was $171 million, a 22% decrease from a year ago but a 66% increase from last quarter

Speaker Change: Nonetheless, a meaningful step up from last quarter.

Nia Bermuda: We'll also refer to known IFRS measures, including adjusted EBITDA, that we view as important in assessing the performance of our business and ALFCF that we view as important in assessing the liquidity of our business. A reconciliation of non-IFRS metrics to the nearest IFRS metrics can be found in our earnings presentation, which is available on the Investory Relations section of our website.

Speaker Change: Our co-location rate improved to 1.6 times up from 1.57 times in Q2 of last year. Lease amendments continue to be a strong driver of growth, increasing 6.8% year-on-year as our customers added additional equipment to our sites.

Speaker Change: The Q2-24 segment adjusted EBITDA in Nigeria was $171 million, a 22% decrease from a year ago but a 66% increase from last quarter.

Steve Howden: Segment adjusted EBITDA margin was up 340 basis points to 63.6%, given the reduction in cost of sales, primarily driven by a decrease in tower repairs and maintenance costs. In Sub-Saharan Africa, in the segment, towers and tenants increased by 1.3% and 3.5%, respectively, versus this time last year, and revenue is impacted by the unwinding of our power managed services business in South Africa this quarter, whereby we now recognize the pass-through power revenue as net, as opposed to previously gross revenue recognition and gross cost recognition.

Sam Darwish: And with that, I'd like to turn the call over to SimDorage, our chairman, and CEO. Thanks, Naya, and welcome everyone to our second quarter 2024 earnings results code. We're reporting solid performance on revenue, adjusted EBITDA, and ALFCF, while CAPEX decreased meaningfully. This quarter, we began putting the negative impacts of the January 2024 NERA devaluation in the rearview mirror as we started to realize more of the benefits of the 4x3 sets in our revenue contract, and so a significant step up in adjusted EBITDA, and adjusted EBITDA margin from the first quarter.

Speaker Change: Segment adjusted EBITDA margin was up 340 basis points to 63.6% given the reduction in cost of sales primarily driven by a decrease in tower repairs and maintenance costs.

Speaker Change: In Sub-Saharan Africa in the segment, towers and tenants increased by 1.3% and 3.5% respectively versus this time last year.

Speaker Change: And revenue is impacted by the unwinding of our power managed services business in South Africa this quarter, whereby we now recognize the pass-through power revenue as net, as opposed to previously gross revenue recognition and gross cost recognition.

Steve Howden: We flagged this in our original foliar guidance prior to the agreement being completed, which it now has been. Therefore, revenue for the segment decreased by 12.3%, but segment adjusted EBITDA increased 21.5%. In addition to the pass-through mechanics changing, the segment-adjusted EBITDA also benefited from a decrease in cost of sales driven by lower maintenance costs. Segment adjusted, Evita Margin increased 1,970 basis points to 70.7%, mostly as a result of the unwind agreement with MTN in South Africa this quarter further de-risking the business model.

Speaker Change: We flagged this in our original full year guidance prior to the agreement being completed, which it now has been.

Sam Darwish: The reduction in CAPEX reflects the actions we're taking to generate more cash, and narrow our focus to projects that we believe will deliver the highest returns. Two of the main goals of our ongoing strategic review, We've made important progress on commercial matters in the quarter with the extension of our contract with MTN South Africa through 2034 and the renewal of contracts with MTN Rwanda also through 2034. And most notably just last week we announced a significant milestone in our long term commercial relationship with MTN in Nigeria.

Speaker Change: Therefore, revenue for the segment decreased by 12.3%, but segment adjusted EBITDA increased 21.5%.

Speaker Change: In addition to the pass-through mechanics changing, the segment-adjusted EBITDA also benefited from a decrease in cost of sales driven by lower maintenance costs.

Speaker Change: Segment-adjusted EBITDA margin increased 1,970 basis points to 70.7%, mostly as a result of the unwind agreement with MTN in South Africa this quarter, further de-risking the business model.

Sam Darwish: We renewed and extended all our power contracts with MTN in Nigeria through 2032, covering nearly 13,500 units and approximately 23,800 lease amendments. This also includes 1,430 of approximately 2,500 tenancies that were due to expire in 2024 and 2025 but will now remain with IHS Nigeria. Over the last month we have renewed or extended all 26,000 tenences with MTN in addition to approximately 26,000 lease amendments across six countries into the next decade.

Speaker Change: In our LATAM segment, Towers and Tenants grew by 10.4% and 6.7% respectively versus this time last year.

Steve Howden: In our LATAM segment, Towers and Tenants grew by 10.4% and 6.7%, respectively, versus this time last year, and revenue decreased by 3.9%, of which organic revenue growth increased 1.5% as a result of negative FX movements and a reduction in revenue recognition from OI, as we discussed last quarter. Segment-adjusted EBITDA therefore decreased by 6%, leading to a 71.6% segment-adjusted EBITDA margin, a 150 basis point decrease versus Q2 last year, which again reflects the decrease in revenue and increase in power generation costs.

Speaker Change: and revenue decreased by 3.9% of which organic revenue growth increased 1.5% as a result of negative FX movements and a reduction in revenue recognition from OI as we discussed last quarter.

Speaker Change: Segment-adjusted EBITDA therefore decreased by 6%, leading to a 71.6% segment-adjusted EBITDA margin, a 150 basis point decrease versus Q2 last year, which again reflects the decrease in revenue and increase in power generation costs.

Steve Howden: In Brazil, our second largest market with 7,951 towers, macro conditions, notwithstanding the FX headwinds as the Brazilian REI devalued against the dollar, were mostly positive as both interest rates and inflation came down. In Meena, towers and tenants grew by 1.5% and 8.8%, respectively, while revenue increased by 12.7%, including 6.4% organic revenue growth driven primarily by new sites in escalation. Segment-adjusted EBITDA increased 14.5%, and the Q2-24 adjusted EBITDA margin increased to 55.4%.

Speaker Change: In Brazil, our second largest market with 7,951 towers, macro conditions, notwithstanding the FX headwinds as the Brazilian REI devalued against the dollar, were mostly positive as both interest rates and inflation came down.

Sam Darwish: With the MTN renewals completed we can now focus on value creation and operational efficiencies. We now have approximately $12.3 billion of contracted revenues with an average remaining ten in term of more than eight years. Let me also touch on some of our financial highlights in the quarter. We saw revenue increased by 4% and adjusted EBITDA increased by 35% from Q1 2024. As we saw our contract resets became organic growth for the quarter versus Q2 2023 was 69%.

Speaker Change: In MENA, towers and tenants grew by 8.5% and 8.8% respectively, while revenue increased by 12.7%, including 6.4% organic revenue growth, driven primarily by new sites and escalations.

Speaker Change: Segment-adjusted EBITDA increased 14.5% and the Q2-24 adjusted EBITDA margin increased to 55.4%.

Steve Howden: On to slide 17, we'll look at our capital structure and the rated items. And at June 30, 2024, we had approximately $4.2 billion of external debt and IFRS 16 lease liabilities. Of the $4.2 billion, approximately $2 billion represented Bond Financing and other indebtedness, which includes $430 million, which has been drawn down from the three-year bullet term loan that we have at the IHS holding limited levels.

Sam Darwish: Group wide we added net 385 tenences 1,566 lease amendments and built 207 hours including 136 in Brazil. For the remainder of the year we expect strong performance in our KPIs and the underlying trends driving our business remain healthy and the higher adjusted EBITDA margins continue after the dip of Q1 margins emanating from the January 2024 evaluation in Nigeria. During the quarter the average forex rate for the US dollar to the NERA was 1,392.

Speaker Change: On to slide 17, and we'll look at our capital structure and the rated items. And at June 30, 2024, we had approximately $4.2 billion of external debt and IFRS 16 lease liabilities.

Speaker Change: Of the $4.2 billion, approximately $2 billion represent our bond financing and other indebtedness includes $430 million that's been drawn down from the three-year bullet term loan that we have at the IHS holding limited level.

Steve Howden: As Sam mentioned, continuing to improve the strengths and flexibility of our balance sheet is an important component of our strategic review. We've already undertaken and continue with various balance sheet initiatives to extend maturities, and manage interest rate expense. Swap dollar obligations into local currency where possible and add flexibility to our capital structure. This includes the Tauoco and Fiboco debentures we signed in Brazil for approximately $54 and $29 million, respectively, and plenty more initiatives to come over the second half of the year. Cash equivalents increased to $446 million as of June 30.

Speaker Change: As Sam mentioned, continuing to improve the strength and flexibility of our balance sheet is an important component of our strategic review.

Sam Darwish: We've already undertaken and continue with various balance sheet initiatives to extend maturities, manage interest rate expense, swap dollar obligations into local currency where possible, and add flexibility to our capital structure.

Sam Darwish: As the Nigeria forex market gradually stabilizes we continue to see USD availability and more favorable conditions to source on upstream US dollars to the group. Turning to slide seven as you can see we are in a great position having renewed and extended all power contracts with MTN in Nigeria and across our other African markets. In Nigeria we renewed nearly 13,500 tenences through 2032 which includes 1,430 out of the approximate 2,500 size that were due to expire in 24 and 25.

Speaker Change: This includes the Tauaco and Fibaco debentures we signed in Brazil for approximately $54 and $29 million respectively, and plenty more initiatives to come over the second half of the year.

Steve Howden: And in terms of where that cash is held, approximately 16% was held in Naira, that Nigerian business. We were able to upstream $94 million during and after the quarter, as we mentioned. While we anticipate going upstream again in 2024, we do caution that it remains to be determined if the increased dollar availability can be sustained. Consequently, from all these moving elements, at the end of Q2-24, our consolidated net debt was approximately $3.7 billion, and we had a consolidated net leverage ratio of 3.9 times, up 0.1 times versus the end of March 24.

Speaker Change: Cash in cash equivalents increased to $446 million as of June 30 and in terms of where that cash is held approximately 16% was held in Naira that Nigerian business

Speaker Change: We were able to upstream $94 million during and after the quarter, as we mentioned.

Sam Darwish: Bringing our total tenant count in Nigeria to over 25,000. Please remember we also signed a multi-year 3,950 tenant rollout agreement with Erther Nigeria in February which also included a three-year contract extension. The agreement with MTN in Nigeria together with the recent renewals between IHS and MTN group across all six African markets covering approximately 26,000 tenences. Nigeria, Cameroon, Rwanda, Zambia, Codiva and South Africa where we both do business demonstrate how the two companies are set to work collaboratively to continue delivering mobile connectivity across Africa.

Speaker Change: While we anticipate to upstream again in 2024, we do caution, it remains to be determined if the increased dollar availability can be sustained.

Speaker Change: Consequently, from all these moving elements at the end of Q2-24, our consolidated net debt was approximately $3.7 billion, and we had a consolidated net leverage ratio of 3.9 times, up 0.1 times versus the end of March 24.

Steve Howden: We expect leverage to remain within our target three to four times net leverage ratio this year prior to the realization of any future disposals, at which time we expect the leverage to drop. Moving to slide 18, we updated our 2024 guidance last week as a result of our renewed and extended contracts with MTN Nigeria. We anticipate that the agreement with MTN will negatively impact our results for fiscal year 2024 by approximately $30 to $35 million.

Speaker Change: We expect leverage to remain within our target three to four times net leverage ratio this year, prior to the realization of any future disposals, at which time we expect the leverage to drop.

Sam Darwish: Building on our 20-plus year relationship as commercial partners, both companies will leverage our shared operations excellence and engineering expertise to meet the end-users, increasing these sophisticated data demands Together, IHS Towers and MTN Group have a track record of navigating complex operating environments and challenging micro-economic conditions to deliver connectivity crucial to economic growth and digital inclusion I want to commend our Nigerian team and their commercial colleagues for their efforts to get this agreement across the line and find a solution that helps secure our long-term financial stability. The renewed contracts provide a more sustainable split between local and foreign currency and introduces a new diesel-link component that better shares the risk of potential fluctuations in the value of the Naira and the cost of diesel.

Speaker Change: Moving to slide 18, we updated our 2024 guidance last week as a result of our renewed and extended contracts with MTN Nigeria. We anticipate that the agreement with MTN will negatively impact our results for fiscal year 2024 by approximately $30 to $35 million.

Steve Howden: Although the contracts were signed in August 2024, they are effective April 1, 2024, and so on an annualized basis, the headwind is approximately $47 million. Despite the impact of revenue on EBITDA, we expect our business will continue to benefit from co-locations and amendments, and with reduced diesel price exposure, we expect we'll benefit from more operating leverage. As a reminder, we completed the unwind of our Power Managed Services agreement with MTN in South Africa during the quarter, but again, this does not impact our guidance as it had already been factored in previously. And finally, on slide 19, on the left, you can see revenue by reporting currency for Q2. Whereas, on the right, we provide the breakout of revenue based on the contract split.

Speaker Change: Although the contracts were signed in August 2024, they are effective April 1, 2024, and so on an annualised basis, the headwind is approximately $47 million.

Speaker Change: Despite the impact of revenue in EBITDA, we expect our business will continue to benefit from collocations and amendments, and with reduced diesel price exposure, we expect we'll benefit from more operating leverage.

Speaker Change: As a reminder, we completed the unwind of our Power Managed Services Agreement with MTN in South Africa in the quarter, but again, this does not impact our guidance as it had already been factored in previously.

Speaker Change: And finally on slide 19, on the left you can see revenue by reporting currency for Q2, whereas on the right we provide the breakout of revenue based on contract split. The bottom of the slide shows the average annual FX rate assumptions used in our 2024 guidance and are unchanged from last quarter.

Sam Darwish: With the installation of a power indexation element in Nigeria and the anion of our power managed power managed services in South Africa, we are now much more protected against energy price fluctuations as a company. The renewal is a testament to the value of the relationship with MTN and our commitment to work together to mitigate the impact of global macro-conditions and broaden mobile connectivity through our critical infrastructure. We continue to believe in the vast opportunity in Nigeria and look forward to working with MTN to enable critical communication services and mobile connectivity as well as address increasing data demands in this vast ground market.

Steve Howden: And finally, on slide 19, we provide the breakout of revenue based on contract split. The bottom of the slide shows the average annual FX rate assumptions used in our 2024 guidance and are unchanged from last quarter. This now brings us to the end of our formal presentation. We thank you for your time today. And operator, please now open the line for questions. Your first question comes from the line of Jim Schneider from Goldman Sachs. Please go ahead. Good morning.

Speaker Change: This now brings us to the end of our formal presentation. We thank you for your time today. And operator, please now open the line for questions.

Speaker Change: Michael Williams, IHS Hldg

Speaker Change: Episode 2

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Speaker Change: Your first question comes from the line of Jim Snyder from Goldman Sachs. Please go ahead.

Jim Schneider: Thanks for taking my questions. Just wanted to get a sense as to how you characterize the overall new activity in both Nigeria and your broader African profile. Any, I mean, you mentioned some activity.

Sam Darwish: In addition to commercial milestones, we are making great progress across a number of our initiatives. Let's turn to slide 8 to look at some of the highlights. As it relates to our strategic review of unlocking shareholder value versus our existing suppressed valuation, we are starting to deliver on elements such as improving our governance framework as evidenced by the positive outcome of our 24 AGM and resolving our commercial matters as reflected by the comprehensive contract renewal with MTN.

Jim Snyder: Good morning. Thanks for taking my questions. Just wanted to get a sense as to how you characterize the overall new lease activity in both Nigeria and your broader African profile. You mentioned some activity. Do you feel like there is more of a positive kind of macro view at this point, and at what point, any time in this year, would you expect that leasing activity to step up or accelerate? Thank you.

Steve Howden: Do you feel like there is more of a positive kind of macro view at this point? And would you, at what point, any time in the year, expect at least the activity to step up or accelerate? Thank you. Jim and Steve here.

Sam Darwish: In addition, we continue to focus on increasing our operating profitability and substantially reducing our capital to improve cash flow generation. We are assessing group-wise costs and capital structures including how we can introduce more technology, especially artificial intelligence, and to our ways of working to help us realize efficiencies. During the quarter, we also reorganized our Brazilian operations, increasing the levels of integration between our tower business and fiber business. This will provide not only cost efficiencies, but also speed to market benefits as well.

Steve Howden: Yeah, I mean, certainly, the quarter is demonstrating that the fundamental growth characteristics continue to be there. So if we think about the different buckets of growth we have right now in terms of new build sites, we did 207 in the quarter. Now, a chunk of that is in LATAM, where we've decided to continue investing growth capex, and we pulled back in Africa. But actually, when you look at the co-locations, which there were close to 400 in the quarter, and the lease amendments, where there were 1200 plus in the quarter, a lot of that's actually being driven out of the African portfolio. Scattered around a little bit, we had a good chunk of co-location in Rwanda in the quarter where we reached a new deal with one of the carriers there, and some in Nigeria as well.

Jim Snyder: Jamie, Steve here. Yeah, certainly the quarter is demonstrating that the fundamental growth characteristics continue to be there. So if we think about the different buckets of growth we have right now in terms of new build sites, we did 207.

Speaker Change: in the quarter. Now, a chunk of that is in LATAM, where we've decided to continue investing growth capex, and we've pulled back in Africa.

Speaker Change: But actually, when you look at the co-location, which there was close to 400 in the quarter, and the lease amendments where there was 1200 plus in the quarter, you know, a lot of that's actually being driven out the African portfolio. Scattered around a little bit, we had a good chunk of co-location in Rwanda in the quarter where we'd reached a new deal with one of the carriers there.

Sam Darwish: We are beginning to see the impact of this overall efficiency improvement in our Q224 results and our 24 guidance implies continuation of higher margins versus 23. Additionally, we continue to examine our portfolio of markets to determine the right composition for AHS going forward and at previously indicated this will include raising proceeds with a target of 500 million to a billion dollars. The capital rates from these initiatives will primarily be allocated to reduce debt while also considering share buybacks and or introducing a dividend policy. As a reminder, these initial targets do not rule out additional initiatives we are assessing in parallel in our pursuit of increasing shareholder value.

Steve Howden: And a lot of the lease amendments are actually coming out of Nigeria, particularly South Africa, as we see the kind of continued slow and steady 5G rollout in those two particular markets. So, yes, the signs still continue to look good. I don't think we'll get too ahead of ourselves in terms of knowing that the carriers are looking at their capex spend plans and trying to sort of rationalize where they can, given how global macro is impacting everybody in the industry.

Speaker Change: some in Nigeria as well. A lot of the lease amendments are actually coming out of Nigeria, particularly South Africa, as we see the kind of continued slow and steady 5G rollout in those two particular markets. So, yes, the signs still continue to look good. I don't think we'll get too ahead of ourselves in terms of knowing that, you know, the carriers are looking at their CapEx spend plans and trying to sort of rationalise where they can, given, you know, how global macro is impacting everybody in the industry. But we still see kind of a steady growth in our key markets.

Steve Howden: But we still see kind of steady growth in our key markets. Thanks, and maybe as a follow-up, can we just characterize where you are in some of your asset sale discussions with potential buyers? Are there any major deals that are sort of toward the later stages, maybe in the seventh to ninth innings, if you want to use a baseball analogy? No, I'm not sure. Well, I'm a Brit, so I understand your baseball, but I won't get drawn into it too much.

Sam Darwish: Moving on to governments, as I just mentioned, we are pleased that the proposals to amend the company's articles of association were approved by shareholders at the AGM held in June. The voting results marked a significant achievement for IHS, better aligning our governance framework with that of mature U.S, listed companies. With MGM, we remain engaged on any outstanding governance issues and anticipate a mutually agreeable resolution in due course. Moving to our balance sheet, which remains a top priority, we continue to remain comfortable as we actively pursue initiatives to extend maturities, manage interest expense, and shift more debt into local currency.

Speaker Change: Thanks. And maybe as a follow-up, can you maybe just characterize where you are on some of your asset sale discussions with potential buyers? Are there any major deals that are sort of towards the later stages, maybe in the seventh to ninth innings, if you want to use a baseball analogy?

Steve Howden: No, we don't want to get, you know, too drawn into comments generally on that particular topic. You know, we said last quarter in May that we were looking to raise $500 to a billion dollars in proceeds. We've reiterated that today. We gave ourselves a 12 month timeline back in May, and so, you know, all of that is on track. There are discussions happening, but we'll just leave it there. Yeah, for now. We'll update people when there's something concrete to discuss. Thank you very much.

Speaker Change: Well, I'm a Brit, so I understand your baseball analogy, but I won't get drawn into it too much.

Speaker Change: We don't want to get too drawn into comments generally on that particular topic. We said last quarter in May that we were looking to raise $500 to $1 billion of proceeds. We've reiterated that today. We gave ourselves a 12-month timeline back in May. All of that is on track.

Sam Darwish: At the end of the quarter, we had $746 million of available liquidity. We continue to expect to remain within our target leverage range of three to four this year albide at the top end of the range.

Speaker Change: There are discussions happening but we'll just leave it there for now and we'll update people when there's something concrete to discuss.

Sam Darwish: I'd now like to provide an update on Nigeria's macro. Since the end of the first quarter, the central bank of Nigeria further increased the policy interest rate by 200 basis points to 26.75%. Initially in May, and then again in July, as the CBN continues to combat inflation and it remains focused on press stability in the country. We remain cautiously optimistic as the Forex market in Nigeria appears to have stabilized modestly, with the NIRAC closing at 1597 on August 9, 2024.

John Atkin: Your next question is from the line of John Atkin from RBC Capital Markets. Please go ahead. I think cricket has a lot of innings, so 7th to 9th inning might actually qualify as early, but I'll let you be the judge of that.

Speaker Change: Thank you very much.

Speaker Change: The next question is from the line of John Atkin from RBC Capital Markets. Please go ahead.

Steve Howden: So I was just interested in things related to the strategic review. There's a lot of flexibility to talk about in terms of potential outcomes, capital allocation, fair buybacks, dividend, and so forth, but you also talked about not ruling out further initiatives to continue increasing shareholder value. Which we continue to assess in parallel. Can you talk a little bit about what might be behind that and what would drive you towards that, you know, towards that decision? And then just more of a last minute question; I noticed that.

John Atkin: I think Cricket has a lot of innings, so seventh to ninth, then he might actually qualify as early, but I'll let you be the judge of that. So I was just interested, two things, on the strategic review, there's a lot of flexibility that you talk about in terms of, you know, potential outcomes, capital allocation,

Sam Darwish: We continue to see U.S, dollar availability in the country, which supported our sourcing of nearly $290 million a year to date, of which we have upstreamed approximately $94 million to group during and after the second quarter. Market conditions permitting, we expect to upstream more through the second half of 2024.

John Atkin: care about VaaX dividend and so forth. But you also talked about not ruling out further initiatives to continue increasing shareholder value.

Speaker Change: which we continue to assess in parallel. Can you talk a little bit about what might be behind that and what would drive you towards that, you know, towards that decision? And then and then just more of a left hand question, I noticed that.

Steve Howden: Amendments have increased significantly, and what's driving that? Thanks. So, I'll comment first on the strategic review, then I'll let Sam jump in and add a bit of flavor as well, and then I'll come back to Latan on the lease amendments. So, in terms of the strategic review, the way we consistently characterize that is that we are looking at a whole broad variety of opportunities. We're very, very focused on what can create value for shareholders, and whilst we wanted to provide some guidance as to how we were thinking about it last quarter when we set those targets, we also don't want to rule out potential other value-creating opportunities.

Sam Darwish: Lastly on LATAM, we completed the sale of our Peru subsidiary to SBA communications on April 30, 2024. And as noted earlier, we built 136 towers in Brazil during the quarter for a total of 294 towers a year to date. We remain committed to Brazil, which is our second largest market and one of our fastest growing. We continue to drive strong operational results there and see significant ongoing growth opportunities.

Speaker Change: Amendments increased significantly and what's what's driving that. Thanks.

Speaker Change: So I'll comment first on the strategic review, then I'll let Sam jump in and add a bit of flavour as well. And then I'll come back to back to Latam on the lease amendments. So in terms of the strategic review, look, the.

Speaker Change: The way we, you know, consistently characterize that is

Steve Howden: And with that, I will turn the call over to Steve. Thanks so much and hello everyone. Turning to slide 10, As Sam mentioned here, we show our Q2 performance. As you see, both towers and tenants are up approximately 3% in Q224 versus Q223, while Lisa amendments again increased by double digit percentages, positive signs of the fundamental underlying tenancy growth continuing across our key markets. The year-on-year financial performance in Q224, however, was impacted by the NARA devaluation from an average rate of 508 NARA to the dollar in Q2 of last year, so 1392 NARA in the second quarter of this year.

Sam Darwish: We are looking at a whole broad variety of opportunities.

Sam Darwish: We're very, very focused on what can create value for shareholders.

Sam Darwish: and whilst we wanted to provide some guidance as to how we were thinking about it last quarter when we set those targets, we also don't want to rule out you know potential other value creating opportunities. Now

Steve Howden: Now, what we would also say is things like progress on governance, things like progress with MTN renewals, that all sits squarely in our minds in terms of value creation. It might not be disposals of any type, but that sort of internal work, if you like, is also very important.

Sam Darwish: What we would also say is, you know, things like the progress on the governance, things like progress with MTN Renewal.

Sam Darwish: That all sits squarely in our minds in terms of value creation. It might not be disposals of any type but that sort of internal work, if you like, is also very important.

Steve Howden: So, there are lots of different strands to our thinking around value creation. The disposals we've characterised so far, what we're targeting initially, and we've said we will look to pay down some debt with that, and we'll think about other shareholder direct return methods after that. So, all of that remains the same. But Sam, I don't know if you want to add anything specific to that before I go back to Latan. Yeah, hi John.

Sam Darwish: So there's lots of different strands to our thinking around value creation.

Steve Howden: Therefore on a reported basis, revenue and adjusted EBITDA declined year over year. However, as indicated last quarter, we now see a meaningful step up in profitability as our revenue contract FX reset kicked in following the impact of the January devaluation of the NARA. Specifically in Q2, we saw revenue increased by 4% and adjusted EBITDA increased 35% from the first quarter of this year. First and second quarter of last year, revenue declined 20%, adjusted the EBITDA decreased by 11.9% in ALFCFL by 9.6% in each case on a reported basis and driven largely by the impact of the devaluation more than offsetting the strong organic growth.

Sam Darwish: the disposals we've characterized so far what we're targeting initially and we've said you know we will look to pay down some debt with that and we'll think about other shareholder direct return methods after that so all of that remains remains the same but Sam I don't know if you want to add anything specific on that before I go back to Latham.

Sam Darwish: Look, I think it's very important that we remain focused on unlocking shareholder value. We really believe there is much more intrinsic value than the market is really awarding us. I mean, our free flow at the moment is more than 20%. We have no major renewals anymore coming for at least eight years. We have more than $12.3 billion of contracted revenue, yet our market cap remains under a billion dollars. So we will announce things as they happen. We'll wait until the ninth inning to kind of finish, and then we'll say what we did.

Sam Darwish: Hi John, I think it's very important that we remain focused on shareholder value.

Sam Darwish: unlock. We really believe there is much more intrinsic value than the market is really awarding us.

Sam Darwish: I mean, our free float at the moment is more than 20%.

Speaker Change: We have no major renewals anymore coming for at least eight years. We have more than $12.3 billion of contracted revenue, yet our market cap remains under a billion dollars. So we will announce things as they happen.

Steve Howden: However, our adjusted EBITDA margin increased to 57.6% a notable improvement year over year and quarter over quarter. A level of CAPEX investment decreased by 73% in the quarter driven by the significant pullback in CAPEX across all our segments. And finally our consolidated net leverage ratio increased to 3.9 times at the end of Q2 up 0.1 times versus Q1 of this year. And that's consistent with the expected increase we flagged following the Nigeria devaluation in January. But we remain and expect to remain within our three to four times leverage targets as guided.

Steve Howden: But for now, we will leave no stone unturned until the market realizes there is much more value to this company than it's been awarded. And then, John, on your lease amendment question, so there wasn't too much of a step up on LATAM lease amendments, so they're about 196 now in Q2, they were 186 last quarter, albeit they were sort of 69 when you're looking at the comparator quarter from a year ago, where we did see some step up in lease amendments this quarter versus Q1 within the SSA segment, which was in South But what's driving the year-on-year step-up in Latham? And that's simply customers taking more space on the towers. But again, I wouldn't I wouldn't overplay that just yet.

Speaker Change: We'll wait until the ninth inning to finish, and then we'll say what we've done. But for now, we will leave no stone unturned until the market realizes there is much more value to this company than it's been awarded.

John Atkin: and then John on your lease amendment question so there wasn't too much of a step up on LATAM lease amendments so they're about 196 now in Q2

John Atkin: They were 186 last quarter.

Speaker Change: albeit they were sort of 69 when you're looking at the comparator quarter from a year ago, and where we did see some step up in lease amendment this quarter versus Q1 was in the SSA segment which was in South Africa, and that was 5G rollout in South Africa.

Steve Howden: Moving to slide 11 and I wanted to provide some more color on the updated contract structure with MTN and how we have de-risked our power exposure. On the left side, you see a comparison between our actual revenue by contract split for the second quarter 2024 and what it would have looked like after adjusting for new financial terms in the renewed contracts with MTN in Nigeria. Given those MTN Nigeria agreements were signed in August 2024 post the quarter end, the impact of these changes are not included in the second quarter 2024 results.

Speaker Change: What's driving the year-on-year step-up in Latham?

Speaker Change: Episode 2

Speaker Change: That's simply customers taking more space on the towers and but again, I wouldn't I wouldn't overplay that just yet. It's stepping up from 69 to 196 Which doesn't compare that that kind of that size of lead to the 37,000 that we have across the portfolio

Steve Howden: Despite the terms being effective from April 1, the initial impact will reflect on our third quarter results. The new structure provides what we believe is a more balanced split between foreign and local currencies and the newly introduced diesel linked component acts as a hedge against diesel price and FX fluctuations. Our contracts have always had some level of shared risk and under the new terms, there is a more balanced split whereby our USD exposure is reduced but in return we no longer own the risk of diesel price fluctuations which is now passed on to MTN Nigeria through diesel indexation.

Steve Howden: It's stepping up from 69 to 196, which doesn't compare that sizably to the 37,000 that we have across the portfolio. And then just on Latham, and then one more question on Sam's answer, because I was going to ask that as well. So in Latham, some of your peers have noted that the... Judicial Recovery Proceedings around OI will have a kind of a multi-year impact, and I know that you're kind of less exposed given the tenant mix there, but any color there as to how your organic growth aspirations in the region might be affected by the OI Judicial Recovery Proceedings.

Speaker Change: And then just on Latham, and then one more question to Sam's answer, because I was going to ask that as well, but so Latham, some of your peers have noted that the

Speaker Change: Judicial recovery proceedings around OI will have a kind of a multi-year impact and I know that you're kind of less exposed given the tenant mix there but any color there as to how your organic

Speaker Change: Growth aspirations in the region might be affected by the OIJ Judicial Recovery Proceedings

Steve Howden: It's important to note that the USD component will continue to benefit from quarterly FX resets and annual US CPI linked escalations. And the local currency component will continue to benefit from local CPI linked escalations now applied every six months rather than annually. The significant change on introducing power indexation to our use fees with MTN Nigeria together with the unbundling of the backup power contract with MTN in South Africa now means the IHS has moved its business model to being significantly hedge against power across our footprint. All our country businesses are now predominantly either power pass through or have power indexation elements within their use fees.

Steve Howden: Yeah, I mean, if you look at our LATAM growth rates this time around, when you kind of unpack them for FX and those sorts of items, we were about 1% growth this year versus last year, but that's because we backed out oil this year versus last year. So actually, the organic growth rates are more like 12%, 13% for LATAM.

Speaker Change: Yeah, I mean, if you look at our LATAM growth rates from this time around, when you kind of unpack them for FX and those sorts of items, we were about 1% growth, but that's because we've backed out OI.

Steve Howden: So we continue to see decent double-digit growth in the absence of that oil revenue, and we'll see how that progresses. As you say, that's tied to the judicial recovery plan that they have, and we've effectively taken it out of our numbers. So to the extent that there are realizations from that, then that will all be upside. And then lastly, Sam repeated what you put in the script around the contracted backlog.

Speaker Change: this year versus last year, so actually the organic growth rate is more like 12-13%.

Speaker Change: for LATAM. So we continue to see, you know, decent double digit growth in the absence of, you know, that oil revenue.

Speaker Change: and we'll see how that progresses. You know, as you say, that's tied to the judicial recovery plan that they have and we've effectively taken it out of our numbers, so to the extent that there's realisations from that, then that will all be upside.

Steve Howden: We believe these changes have materially reduced the risk of our operating model. And moving on to our revenue on a consolidated basis, you can see how the continued devaluation turned a quarter of strong organic growth into a 20.3% decline. The NIRD value of 63.5% in Q224 versus last year yet the business delivered organic growth of 69.3% driven primarily by FX resets, TCO escalations and power. Fiber, new lease amendments, new co-location and new sites also contributed to organic growth this quarter and came from countries across our portfolio.

Sam Darwish: Sam repeated what you put in the script around the contracted backlog.

Steve Howden: And, you know, as we think about a medium to longer-term margin and even a generation path, how would you bracket kind of the incremental margins associated with that backlog? And I know there's a lot of moving pieces around FX and energy pricing, but any kind of benchmarks or guardrails to put on in terms of margins associated with that contracted revenue backlog? Yeah, I mean, I'll sort of take that.

Speaker Change: a medium to longer term margin and EBITDA generation.

Speaker Change: Pat, how would you bracket kind of the incremental margins associated with that backlog? And I know there's a lot of moving pieces around FX and energy pricing, but any kind of brackets or guardrails to put on in terms of margins associated with that contracted revenue backlog?

Steve Howden: The way that $12.3 billion of contracted revenue works is that that's the business on the sites today. So, you know, that effectively gets you to your 57% margin this quarter, or, as we're guiding to the full day, about 54%. So I triangulate people around 54% margins this year, which is what we've pretty consistently said through our guidance through the course of the last two quarters. But we are seeing, you know, when you break it down into the quarter-on-quarter piece, we are starting to see higher margins. And, you know, we expect to be exiting the year in the mid to high 50s.

Pat: Yeah, I mean, I'll sort of take that. The way that $12.3 billion of contracted revenue works is that that's the business on the sites today.

Steve Howden: The right side of the game shows you organic growth, of each of our segments for the quarter, where an Nigeria segment grew approximately 105% including a large benefit from effects resets. On slide 13, you can see our consolidated revenue adjusted EBITDA and adjusted EBITDA margins for the second quarter of 2024. As discussed, the NIRD evaluation drove a 20% decrease in reported revenue in the quarter, despite the quarter of the organic revenue growth of over 69% that the gain demonstrated the strong top-line growth trends of the business.

Speaker Change: So, you know, that effectively gets you to your 57% margin this quarter, or, as we're guiding to the full day, about 54% margin. So, I triangulate people around 54% margins this year, which is what we've pretty consistently said through our guidance through the course of the last few quarters.

Speaker Change: But we are seeing, you know, when you break it down into the quarter on quarter piece, we are starting to now see higher, higher margins and

Steve Howden: In Q224 reported revenue includes a $15 million headwind quarter over quarter and a $478 million headwind year over year from the NIRD evaluation, but it's actually a net $159 million headwind after adjusting for the impact of effects resets over the past year. As we've previously noted, most of the effects resets on the USD denominated portion of our Nigeria contracts reset quarterly and therefore our Q224 results now reflect the effects reset benefit from the late-generated evaluation.

Speaker Change: You know, we expect to be exiting the year in the mid to high 50s.

Speaker Change: and we think that that sort of progression can continue through 25 and into 26.

Speaker Change: You know, we're certainly targeting, and we've said this for a long, long time, we're targeting something beginning with a six, so 60% in terms of even done margins. That's a couple of years away yet, but we're trending in the right direction.

Steve Howden: And we think that that sort of progression can continue through 25 and into 26. So, you know, we're certainly targeting, and we've said this for a long, long time, we're targeting something beginning with a six, so 60% in terms of margins. That's a couple of years away yet, but we're trending in the right direction. And we also believe, John, that we also believe, John, that the fact that we now have a power indexation in Nigeria with our largest client, MTN, which we did not have before, in addition to the fact that power as a service has moved on from our business in South Africa, is going to make our margins way more stable going forward into the future. Eric Claire.

Speaker Change: Thank you, and we also believe John that we also believe John that the fact that we have now

John Atkin: a power indexation in Nigeria with our largest client with MTN, which we did not have before, in addition to the fact that power as a service has moved on from our business in South Africa, is going to make our margins way more stable going forward into the future.

Steve Howden: In the second quarter of 24, adjusted EBITDA of $251 million decreased 12% while our adjusted EBITDA margin of 57.6% was up 550 basis points from the prior year and up 1,330 basis points from last quarter. The year over year changes in adjusted EBITDA and adjusted EBITDA margin primarily reflect the decrease in revenue partially offset by decreasing cost of sales driven by a decrease in tower repairs and maintenance costs along with lower-power generation costs.

Richard Choe: Thank you. The next question is from the line of Richard Choe, from JP Morgan. Please go ahead.

Speaker Change: Very clear, thank you.

Speaker Change: Your next question is from the line of Richard Cho from J.P. Morgan. Please go ahead.

Richard Choe: Hi, I have two questions, one kind of macro level, and one more company specific. What are you seeing in Nigeria and your other major markets in terms of data usage? Is it growing at the rate that I guess you had expected? And then, specifically for the company, as you kind of transition to more indexation and less of the Power Management Services, other costs that can come out of the business, and maybe talk a little bit about central costs and initiatives overall. Sure, Sam. Do you want to take the data usage one? I'll just cover the cost side of things first, but if you want to take the macro one,

Richard Cho: Hi, I have two questions, one kind of macro level and then one more company specific.

Steve Howden: On slide 14, we review our adjusted level free cash flow. In the second quarter of 2024, we generated ALFCF of $67 million, a 10% decrease versus last year primarily due to a decrease in cash in operations, post-NIRD valuation and an increase in net interest pays partially offset by a decrease in maintenance capex. ALFCF cash conversion rate was 26.7%. Looking at capex, in the second quarter of 2024, capex of $54 million decreased 73% year on year.

Richard Cho: What are you seeing in Nigeria and your other major markets on data usage? Is it growing at the rate that I guess you had expected? And then on specifically for the company, as you kind of transition to more indexation and

Speaker Change: Less of the power managed services. Are there costs that could come out of the business and maybe talk a little bit about potential cost initiatives overall?

Speaker Change: IHS Hldg

Speaker Change: Sure, Sam. Do you want to take the data usage one? I'll just cover the cost side of things first, but if you want to take the macro one.

Steve Howden: The decrease was driven by lower capital expenditure across all our segments. With a decrease in Nigeria, primarily due to by decreases related to project green and maintenance capex, while the decrease in SSA was primarily driven by a decrease in refurbishment capex. The decrease in Latam and Meena was primarily driven by decreases related to new site capex, although we still retain a healthy level of new site build in Brazil.

Steve Howden: So on the, Richard, you're right. The initial areas to look at are obviously locally within the operating codes, which we've been doing as we've been transitioning those business models. So that's kind of been happening as we go along, and you'll see the realization of that in elements over this quarter a little bit, but then into next quarter as well. As it relates to further cost initiatives, that is also an element of our strategic review, if you like, which is looking at profitability around the group, including central cost structures.

Speaker Change: So, Richard, you're right. The initial...

Sam Darwish: areas to look at are obviously locally within the op codes which we've been doing as we've been transitioning those business models.

Sam Darwish: and that's kind of been happening as we go along and you'll see the the realization of that.

Steve Howden: On the segment review on slide 15, I want to add to some earlier comments on what we're seeing in Nigeria. In May, the CBN raised interest rates by 150 basis points, followed by another 50 basis point increase in July, bringing in the MPR to 26.7%. Total of 4 rate hikes in 2024. These actions appear to have had a positive impact on Nigeria's FX market, with the August the 9th, US Dollar to Niro of Bloomberg rate at $1597.

Sam Darwish: in Elements, so this quarter a little bit, but then into next quarter as well.

Speaker Change: As it relates to further kind of cost initiatives, that is also an element of our strategic review, if you like, which is looking at profitability around the group, including central cost structures.

Steve Howden: And we're continuing to look at different ways that we can operate more efficiently. Some of that's because of the shift in business models away from this power element, but some of it's just new ways of working. We're looking at trying to introduce more technology, trying to use artificial intelligence so that we can be more efficient, more accurate and ultimately reduce overall costs.

Speaker Change: And we're continuing to look at different ways that we can, you know, operate more efficiently. Some of that's because of the shift in business model away from this power element, but some of it's just, you know, new ways of working. We're looking at trying to introduce more technology, trying to use artificial intelligence.

Steve Howden: Most recently, the World Bank approved a $2.3 billion in dollar program for Nigeria as the government remains focused on stabilizing the economy with the aim of increasing dollar flow within the country, enhancing the attractiveness of Nigeria as a foreign direct investment destination and improving transparency in the money markets. There is still more to do, but as a result of these actions, we've seen an increase in US dollars in Nigeria and FX reserves in the country have increased to $34.2 billion at the end of June from $33.8 billion at the end of March.

Steve Howden: So that's kind of an ongoing element of the strategic review, and we'll continue for quite a period of time yet. Don't want to put any numbers on that just yet, but that is happening. In terms of market growth, we're seeing massive growth on the African side, Richard. So, for example, in Nigeria, I believe MTN recently reported a more than 50 percent increase year on year in terms of data usage. I mean, these are the kind of numbers we're seeing so that that runway remains there.

Speaker Change: such that we can be more efficient, more accurate, and ultimately reduce overall costs. So that's kind of an ongoing element of the strategic review and will continue, you know, for quite a period of time yet. I don't want to put any numbers on that just yet, but that is happening.

Speaker Change: In terms of the market growth, we're seeing massive growth on the African side, Richard. So, for example, in Nigeria, I believe MTN reported recently more than 50% increase year-on-year.

Speaker Change: in terms of data usage. I mean, these are the kind of numbers we're seeing, so that runway remains there. LATAM is more modest, but again, data growth remains large.

Steve Howden: Since the FX environment adjusted in January and February, we were able to access nearly $290 million to settle US dollar obligations locally in Nigeria and upstream $94 million to group during and after this second quarter. $98 million FX headwind year over year, more than offsetting the 105% organic growth, which was driven primarily by FX resets and escalations. Nonetheless, a meaningful step up from last quarter. Our co-location rate improved to 1.6 times up from 1.57 times in Q2 of last year.

Sam Darwish: Latam is more modest, but again, data growth remains large. Great, so it seems like, despite some economic headwinds or volatility, growth and data have been pretty strong, and at some point, the carriers will have to keep investing in their networks. (Inaudible) They have to, in our opinion; they have no choice. I mean, to be able to meet the demands of the population, whether in terms of fintech adoption, in terms of... Smartphone adoption in terms of new entries into new users adopting phones. It's just one way traffic.

Richard Cho: Great, so it seems like despite some economic headwinds or volatility there's the growth in data has been pretty strong and at some point the carriers will have to keep investing in their networks.

Speaker Change: They have to, in our opinion. They have no choice. I mean, to be able to meet the demands of the population, whether in terms of FinTech adoption, in terms of...

Sam Darwish: At the moment, what we're seeing is global macro; local macro is putting pressure on their capex cycle, but that pressure is cyclical, and they just have to meet the demand at some point in time, which we believe sooner than later. Great. And your next question is from Maurice Patrick from Barclays. Please go ahead.

Speaker Change: Smartphone adoption in terms of new entries into new users adopting phones.

Speaker Change: It's just one-way traffic. At the moment, what we're seeing is global macro, local macro is putting a pressure on their CapEx cycle, but that pressure is cyclical and they just have to meet the demands at some point in time, which we believe sooner than later.

Steve Howden: Lease amendments continue to be a strong driver of growth, increasing 6.8% year on year as our customers added additional equipment through our sites. Q224 segment adjusted EBITDA in Nigeria was $171 million, a 22% decrease from a year ago, but a 66% increase from last quarter. Segment adjusted EBITDA margin was up 340 basis points to 63.6% given the reduction in cost of sales, primarily driven by a decrease in towel repair and maintenance costs.

Speaker Change: Great, thank you.

Speaker Change: And your next question is from the line of Morris Patrick from Barclays. Please go ahead.

Maurice Patrick: Yeah, good morning, guys. Thanks for taking the question. I've got a couple, please.

Maurice Patrick: The first one follows a bit on Richard's question on densification and traffic growth. I mean, when I was on the Helios call last week, they gave a very sort of upbeat message really around the operator need for densification, partly for traffic, but also new coverage. And I think they were referring to it as here and now, as well as the future. You seem to be a bit more cautious.

Morris Patrick: Good morning guys, thanks for taking the question. I've got a couple please. The first one follows a bit on from Richard's question on densification and traffic growth. When I was on the Helios call last week, they were talking a very sort of upbeat message really around the operator need for

Steve Howden: In Sub-Saharan Africa segment, Tows and Tenants increased by 1.3% and 3.5% respectively versus this time last year. Revenue is impacted by the unwinding of our power managed services business in South Africa this quarter, whereby we now recognize the pass-through power revenue as net, as opposed to previously gross revenue recognition and gross cost recognition. We flagged this in our original Fully a guidance prior to the agreement being completed, which it now has been.

Speaker Change: densification partly for traffic but also in new coverage and I think they were referring to it as here and now as well as the future you seem to be a bit more cautious I'm just keen to understand if that's more to do with

Steve Howden: I'm just keen to understand if that's more to do with the geographic mix, so more LATAM and Nigeria rather than differences within the companies. And the second question is about Nigeria's EBITDA trajectory. I doubt you want to give 2025 outlooks quite yet, but investors are asking quite a lot about the moving parts of costs and revenues for next year in EBITDA. I guess you'll have the tailwind coming from CPI resets. You'll have a tailwind from the increased tenancies from Airtel.

Speaker Change: Geographic Mix, so more Latam and Nigeria rather than...

Speaker Change: Differences between the companies

Speaker Change: and the second question is...

Steve Howden: Therefore revenue for the segment decreased by 12.3%, but the segment adjusted EBITDA increased 21.5%. In addition to the pass-through mechanics changing, the segment adjusted EBITDA also benefited from a decreasing cost of sales driven by lower maintenance costs. Segment adjusted EBITDA margin increased 1,970 basis points to 70.7%, mostly as a result of the unwinding agreement with MTN in South Africa this quarter further de-risking the business month. In our lap time segment, Tows and Tenants grew by 10.4% and 6.7% respectively versus this time last year, and revenue decreased by 3.9% of which organic revenue growth increased 1.5% as a result of negative effects, movements, and a reduction in revenue recognition from OI as we discussed last quarter.

Speaker Change: On Nigerian EBITDA trajectory, I doubt you want to give 2025 outlooks quite yet, but investors are asking quite a lot around the moving parts.

Speaker Change: of Costs and Revenues for Next Year in EBITDA. I guess you'll have the tailwind coming from CPI resets, you'll have the tailwind from the increased tenancies in Airtel, you'll have a presumably a headwind from the loss.

Steve Howden: You'll probably have a headwind from the lost 1,100 tenancies. So, just if you can work us through some moving parts, even if you can't say you think EBITDA will go up or not in Nigeria next year. Thank you. Talk about that last one first. So, Maurice, I mean, you're right.

Speaker Change: 1,100 tenancies. So just if you could work us through some moving parts, even if you can't say you think EBITDA will go up or not in Nigeria next year. Thank you.

Speaker Change: Let's look at that last one first. So, Maurice, I mean, you're right, we're too early for 2025 metrics and guidance, but you have started to unpack some of the moving parts. But another element I would point you to is, you know, macroeconomically speaking,

Steve Howden: We're too early for 2025 metrics and guidance, but you have started to unpack some of the moving parts. Another element I would point you to is, macroeconomically speaking, obviously the biggest driver for IHS in 2024 so far, and one that looks like it's going to be for the rest of 24, was the Q1 devaluation. So, obviously, there was a significant dip in revenue and earnings in Q1 post the Naira devaluation, which has now rebounded in Q2.

Steve Howden: Segment adjusted EBITDA therefore decreased by 6%, leading to a 71.6%, segment adjusted EBITDA margin, 150 basis points decreased versus Q2 last year, which again reflects the decreasing revenue and increase in power generation costs. In Brazil, our second largest market with 7,951 towers, macro conditions, notwithstanding the effects headwinds as the Brazilian Ray ID value against the dollar, were mostly positive as both interest rates and inflation came down. In MENA, towers and tenants grew by 1.5% and 8.8% respectively, or revenue increased by 12.7%, including 6.4% organic revenue growth driven primarily by new sites in escalation.

Speaker Change: Obviously the biggest driver for IHS in 2024 so far, and one looks like it's going to be for the rest of 24, was the Q1 devaluation.

Steve Howden: But obviously, as you drop that quarter of the dip, let's say, then you start to get a more even run rate through the back end of the year. So, as we move forward into 2025, we'll be having a good hard think about what our forward curve looks like. But certainly, at this point in time, we would hope it doesn't include any kind of form of step change. But let's see. So, that's probably one area to look at. You're absolutely right.

Speaker Change: So obviously there was a significant dip in revenue and earnings in Q1 post the Naira devaluation which has then now rebounded in Q2.

Speaker Change: But obviously as you drop that quarter of dip, let's say, then you start to get a more even run rate through the back end of the year. So as you move forward into 2025, we'll be having a good hard think about what our forward curve looks like.

Speaker Change: But certainly, at this point in time, one would hope it doesn't include any kind of form of step change.

Steve Howden: IHS IHS IHS Hldg We have approximately $4.2 billion of external debt and IFR 16 lease liabilities. Of the $4.2 billion, approximately $2 billion represents our bond financing and other indebtedness includes $430 million that has been drawn down from the three-year bullet term loan that we have at the IHS holding limited level. As Sam mentioned, continuing to improve the strength and flexibility of our balance sheet is an important component of our strategic review.

Steve Howden: In Nigeria, organic growth is being driven by Airtel, and MTN is continuing to do business, by the way. So, they'll come through as well. We're seeing plenty of traction in Brazil towards the back end of this year and into next year around new build sites, around co-location, around more lease up, excuse me, more lease amendments as 5G starts to roll out more seriously. I think as it relates to LATAM, the 5G take-up, while it's there, I think it's been a bit slower than people had originally thought, but it's now starting to gather some pace.

Speaker Change: But let's see. So that's probably one area to look at. You're absolutely right. In Nigeria, organic growth being driven by Airtel. MTN are continuing to do business, by the way, so they'll come through as well. We're seeing plenty of traction in Brazil towards the back end of this year and into next year around new build sites, around co-location, around more lease amendments as 5G starts to roll out more seriously.

Speaker Change: I think as it relates to LATAM, the 5G take-up...

Speaker Change: While it's there, I think it's been a bit slower than people had originally thought, but it's now starting to gather some pace. I think we're going to see that come through.

Steve Howden: So, I think we're going to see that come through into next year, and then you're right in terms of contractual resets. Those will all flow through as usual. So, those are some of the moving parts without us putting numbers on them yet. Obviously, it's a bit early for that.

Steve Howden: We've already undertaken and continue with various balance sheet initiatives to extend maturities, manage interest rate expense, swap dollar obligations into local currency where possible, and add flexibility to our capital structure. This includes the Tauaco and Fiberco debentures we signed in Brazil for approximately $54 and $29 million respectively, and plenty more initiatives to come over the second half of the year. Kingston Cash Equivalence increased to $446 million as of June 30, and in terms of where that cash is held, approximately 16% was held in Nira, that Nigerian business. We were able to upstream $94 million during and after the quarter, as we mentioned.

Speaker Change: into next year. So, and then you're right in terms of contractual resets, you know, those will all flow through as usual. So, you know, those are some of the moving parts without us putting numbers on it yet. Obviously, it's a bit early for that.

Steve Howden: Thanks. And on the identification point? Yeah, the densification point. I mean, I think it's a little bit to do with different markets at different points in their technological cycle, right? So I'm not sure you can draw a complete apples to apples comparison across them. Our markets are largely 4G penetrated now, and we're sort of on that cusp of 5G. We're starting to see it a little bit in Nigeria, but these are early days. We're starting to see a bit of it in South Africa. I would still say early days, but it is more advanced than Nigeria.

Speaker Change: Thanks, and on identification point?

Speaker Change: Yeah, densification point. I mean, I think it's a little bit to do with different markets at different points in their technology cycle, right?

Speaker Change: So I'm not sure you can draw a complete apples-to-apples across it.

Speaker Change: Our markets are largely 4G penetrated now and we're sort of on that cusp of 5G.

Speaker Change: We're starting to see it a little bit in Nigeria, but early days. We're starting to see a bit of it in South Africa.

Steve Howden: While we anticipate to upstream again in 2024, we do caution. It remains to be determined if the increased dollar availability can be sustained. Consequently, from all these moving elements at the end of Q224, our consolidated net debt was approximately $3.7 billion, and we had a consolidated net leverage ratio of 3.9 times up 0.1 times versus the end of March 24. We expect leverage to remain within our target three to four times net leverage ratio this year prior to the realization of any future disposal at which time we expect the leverage to drop.

Steve Howden: And as I just mentioned, LATAM, it's starting to flow now. So I think it's more a question of where we are in the technology cycle of the given markets, recognising that, you know, over the last few years, we've continued to add, you know, thousands and thousands of lease amendments and collocations as well. Just keep in mind, Helios reports those two metrics differently to how we do. We split them out; they merge them.

Speaker Change: I would still say early days, but more advanced than Nigeria. And as I just mentioned, LATAM, it's starting to flow now. So I think it's more a question of where are we in the technology cycle of the given markets.

Speaker Change: recognising that over the last few years, we've continued to add thousands and thousands of lease amendments and collocations as well. Just keep in mind, Helios report those two metrics differently to how we do. We split them out, they merge them. So just keep that in mind.

Steve Howden: So just keep that in mind. Health, just one very small question I made, just on the Capac's guidance, you reiterated the 300 or 370. I think the first half you're running 110, so we'll go below that run rate. I don't think you've got a huge amount of stuff up in BTS, what's driving the kind of significant to-h-wise this on the Capac? It's a

Speaker Change: Just one very small question if I may. Just on the CAPEX guidance, you reiterated the 300 and 370. I think the first half you're running at 110, so well below that run rate. I don't think you've got a huge step-up in BTS. What's driving the significant 2H, 1H split on the CAPEX?

Steve Howden: Moving to slide 18, we updated our 2024 guidance last week as a result of our renewed and extended contract with MGM Nigeria. We anticipated the agreement with MGM will negatively impact our results for the fiscal year 2024 by approximately $30 to $35 million.

Steve Howden: We've got a little step up in BTS CAPEX as we're delivering our pipelines and a little step in fiber as well, but we'll see how that guidance number goes. We've been looking at whether that's the right metric to retain or maybe slightly trim, and we'll look at that again as we go through Q3. We are certainly trending at the bottom end of that range. Yes. Thanks so much. And that brings us to the end of the IHS Hldg Limited second quarter 2024 earnings results call. Should you have any questions, please contact the Investor Relations team via the email address InvestorRelations at IHStowers.com. The management team thanks you for your participation today and wishes you a good day. What's Your Number 2?

Steve Howden: Although the contracts were signed in August 2024, they are effective April 1, 2024, and so on an annualised basis, the headwind is approximately $47 million. Despite the impact of revenue in EBITDA, we expect our business will continue to benefit from co-locations and amendments, and with reduced diesel price exposure, we expect will benefit from more operating leverage.

Speaker Change: It's a fair point. We've got a little step up in BTS CAPEX as we're delivering our pipelines, and a little step in fibre as well. But we'll see how that guidance number goes. We've been looking at whether that's the right metric to retain or maybe trim slightly, and we'll look at that again as we go through Q3.

Steve Howden: As a reminder, we completed the unwind about Power Money Services agreement with MGM in South Africa in the quarter, but again this does not impact our guidance as it had already been factored in previously. And finally on slide 19, on the left you can see revenue by reporting currency for Q2, whereas on the right we provide the breakout of revenue based on contract split. The bottom of the slide shows the average annual FX rate assumptions used in our 2024 guidance and our unchanged from last quarter.

Speaker Change: We are certainly trending at the bottom end of that range, yes.

Speaker Change: i

Speaker Change: And that brings us to the end of the IHS Holding Limited second quarter 2024 earnings results call. Should you have any questions, please contact the Investor Relations team via the email address InvestorRelations at IHSTowers.com

Speaker Change: The management team thank you for your participation today and wish you a good day.

Operator: This now brings us to the end of our formal presentation.

Operator: We thank you for your time today, and operator, please now open the line for questions.

Kim Snyder: Your first question comes from the line of Kim Snyder from Goldman Sachs. Please go ahead. Good morning. Thanks for taking my questions. Just wanted to get a sense as to how you characterize the overall newly-sactivity in both Nigeria and your broader African profile. Any, you mentioned some activity. Do you feel like there is more of a positive macro view at this point? And would you, at what point, any time in the year, would you expect at least the activity to step up or accelerate? Great. Thank you.

Jim Schneider: Good, Jim and Steve here. Yeah, I mean, certainly the quarter is demonstrating that the fundamental growth characteristics continue to be there. So if we think about the different buckets of growth we have right now, in terms of new build sites, we did 207 in the quarter. Now, a chunk of that is in La Tame, where we've decided to continue investing growth in the capex and we pulled back in Africa, but actually when you look at the collocation, which there was close to 400 in the quarter and the lease amendments where there was 1200 plus in the quarter, you know, a lot of that's actually being driven out of the African portfolio, scattered around a little bit.

Jim Schneider: We had a good chunk of collocation in Rwanda in the quarter where we'd reached a new deal with one of the carriers there, some in Nigeria as well. And a lot of the lease amendments are actually coming out in Nigeria, particularly South Africa, as we see the kind of continued slow and steady 5G rollout in those two particular markets. So yes, the signs still continue to look good. I don't think we'll get too ahead of ourselves in terms of knowing that the carriers are looking at their capex spend plans and trying to sort of rationalize where they can, given how global macros impacting everybody in the industry. But we still see kind of a steady growth in our key markets.

Jim Schneider: Thanks, and maybe as a follow-up, can we be just characterize where you are on some of your asset sale discussions with potential buyers? Are there any major deals that are sort of towards the later stages, maybe in the 7th and 9th innings if you want to use a baseball analogy? Well, I'm a Brit, so I understand your baseball analogy, but I won't get drawn into it too much. No, we don't want to get too drawn into comments generally on that particular topic.

Jim Schneider: We said last quarter in May that we were looking to raise $500 to $1 billion of proceeds. We've reiterated that today. We gave ourselves a 12-month timeline back in May. So all of that is on track. There are discussions happening, but we'll just leave it there for now. We'll update people when there's something concrete to discuss. Thank you very much.

John Atkin: Next question is from the line of John Atkin from ABC Capital Markets. Please go ahead. I think cricket has a lot of innings, so 7th and 9th innings might actually qualify as early, but I'll let you be the judge of that. So I was just interested to things on the strategic review. There's a lot of flexibility to talk about in terms of potential outcomes, capital allocation, spare buybacks, dividend and so forth, but you also talked about not ruling out further initiatives to continue increasing shareholder value, which we continue to assess in parallel.

John Atkin: Can you talk a little bit about what might be behind that and what would drive you towards that decision? And then just more of a last-hand question, I noticed that amendments increase significantly in what's driving that. Thank you.

Jim Schneider: So I'll comment first on the strategic review and I'll let Sam jump in and out a bit of flavour as well, and then I'll come back to back to that time on the least moments. So in terms of the strategic review, the way we, you know, consistently characterised that is, we are looking at a whole broad variety of opportunities with very, very focused on what can create value for shareholders, and whilst we wanted to provide some guidance as to how we're thinking about it last quarter and we set those targets, we also don't want to rule out, you know, potential other value creating opportunities.

Jim Schneider: Now, what we would also say is, you know, things like the progress on the governance, things like progress with MTN Renewals, you know, that all sits squarely in our minds in terms of value creation, it might not be, you know, disposed of any type, but that sort of internal work, if you like, is also very important. So there's lots of different strands to our thinking around value creation, the disposes we've characterised so far what we're targeting initially, and we've said, you know, we will look to pay down some debt with that and we'll think about other shareholder direct return methods after that.

Jim Schneider: So all of that remains remains the same. But Sam, I don't know if you want to add anything specific on that before I get back to Latin. Yeah, hi, John, look, I think it's very important that we remain focused on shareholder value unlock, we really believe our, there is much more interesting value than the market is really awarding us. I mean, our free flow at the moment is more than 20%. We have no major renewals anymore coming for at least eight years.

Jim Schneider: We have more than $12.3 billion of contracted revenue, yet our market cap remains under a billion dollars. So we will announce things as they happen will wait until the ninth inning kind of like finish and then we would say what we've done. But for now, we will leave no stone unturned until the market realizes there is much more value to this company than it's been awarded. And then John, on your lease moment question, so there wasn't too much of a step up on Latin lease amendments, so there are about 196 now in 22.

Jim Schneider: They were 186 last quarter, albeit they were sort of 69 when you're looking at the comparator quarter from a year ago, where we did see some step up in lease moment this quarter versus Q1 within the SSA segment, which was in South Africa. And that's that was 5G role in South Africa. But what's driving the year on your step up in Latin? That simply customers taking more space on the towers, but I wouldn't I wouldn't overplay that just yet.

Jim Schneider: It's stepping up from 69 to 196, which doesn't compare that kind of that size of lead to the 37,000 that we have across the portfolio. And then just on that, and then one more question to Sam's answer, because I was going to ask that as well, but so in Latin, some of your peers have noted that the judicial recovery proceedings around oil will have a kind of a multi year impact. And I know that you're kind of less exposed given the tenant mix there, but any color there is how your organic growth aspirations in the region might be affected by the oil judicial recovery proceedings.

Jim Schneider: Yeah, I mean, if you look at our last-hand growth rates from this time around, when you kind of unpack them for FX and those sorts of items, we were about 1% growth, but that's because we backed out oil this year versus last year. So actually, the organic growth rate is more like 12, 13% for that time. So we continue to see, you know, decent double-digit growth in the absence of, you know, that oil revenue, and we'll see how that progresses.

Jim Schneider: You know, as you say, that's tied to the judicial recovery plan that they have, and we've effectively taken it out of our numbers. So to the extent that there's realizations from that, then that will all be upside. And then lastly, Sam repeated what you put in the script around the contracted backlog, and you know, as we think about a medium to longer-term margin and even a generation path, how would you bracket kind of the market?

Jim Schneider: The incremental margins associated with that backlog, and I know there's a lot of moving pieces around FX and energy pricing, but any kind of brackets or guard rails to put on kind of margins associated with that contracted revenue backlog. Yeah, I mean, I'll sort of take that. The way that $12.3 billion of contracted revenue, you know, works is that that's the business on the site today. So, you know, that that effectively gets you to your 57-cent margin in this quarter, or as we're guiding to the fully about 54-percent margin.

Jim Schneider: So I've trained a lot of people around 54-percent margins this year, which is what we've pretty consistently said through our guidance through the course of the last few quarters, but we are seeing, you know, when you break it down into the quarter on quarter piece, we are starting to now see higher margins, and, you know, we expect to be exiting the year in the mid to high 50s, and we think that that sort of progression can continue through 25 and into 26. So, you know, we're certainly targeting, and we said this for a long long time, we're targeting something beginning with a 6, so 60% in terms of the margins. That's a couple years away yet, but we're trending in the right direction. Thank you.

Sam Darwish: And we also believe, John, that we also believe, John, that the fact that we have now a power indexation in Nigeria with our largest client with MTN, which we did not have before, in addition to the fact that power as a service has moved on from our business in South Africa, is going to make our margins way more stable going forward into the future. Very clear. Thank you.

Richard Cho: Your next question is from the line of Richard Cho from JP Morgan. Please go ahead. Hi. I have two questions. One kind of macro level, and then one more company specific. What are you seeing in Nigeria and your other major markets on data usage? Is it growing at the rate that I guess you had expected? And then on specifically for the company, as you kind of transition to more indexation and less of the power management services, other costs that can come out of the business and maybe talk a little bit about central costs in this year is overall.

Richard Cho: John, do you want to take the data usage one? I'll just cover the cost side of things first, but if you want to take the macro one. So Richard, you're right. The initial areas to look at are obviously locally within the opcodes, which we've been doing as we've been transitioning those those business models. So that's kind of been happening as we go along and you'll see the realization of that in elements over in this quarter a little bit for then in the next quarter as well.

Richard Cho: As it relates to further kind of cost initiatives, that is also an element of our strategic review, if you like, which is looking at profitability around the group, including central cost structures, and we're continuing to look at different ways that we can operate more efficiently. Some of that's because of the shift in business model away from this power element, but some of it's just new ways of working. We're looking at trying to introduce more technology, try to use artificial intelligence such that we can be more efficient, more accurate and ultimately reduce several costs.

Richard Cho: So that's kind of an ongoing element of the strategic review and we'll continue for quite a period of time yet. Don't want to put any numbers on that just yet, but that is that is happening. In terms of the market growth, we were seeing massive growth on the African side, Richard. So, for example, in Nigeria, I believe MTN reported recently, more than 50% increase year-on-year in terms of data usage. I mean, these are the kind of numbers we're seeing.

Richard Cho: So that, that run, we remain there. Classum is more modest, but again, data growth remains large. Great. So, things like, despite some economic headwinds or volatility, the growth in data has been pretty strong. And at some point, the carriers will have to keep investing in their networks. They have to, in our opinion, they have no choice. I mean, to be able to meet the demands of the population, whether in terms of FinTech adoption, in terms of smartphone adoption, in terms of new entries into new users adopting phones, it's just one way traffic.

Richard Cho: At the moment, what we're seeing is global macro, local macro is putting a pressure on their capex cycle. But that pressure is cyclical and they just have to meet the demand at some point in time, which we believe sooner than later.

Morris Patrick: And your next question is from the line of Morris Patrick from Barclays. Please go ahead. Yeah, good morning, guys. Thanks for taking the question. I've got a couple, please. The first one follows a bit on from Richard's question on densification and traffic growth. I mean, when I was on the Helios call last week, they were talking very, very sort of upbeat message really around the operator need for densification, partly for traffic, but also in new coverage.

Morris Patrick: And I think they were referring to it as here and now as well as the future. You seem to be a bit more cautious. And I'm just keen to understand that's more to do with geographic mix, so more, more Latin and Nigeria rather than differences within the companies. And the second question is on Nigerian EBITDA trajectory. I doubt you want to give 2025 outlooks quite yet. But investors are asking quite a lot around the moving parts of cost and revenues for next year in EBITDA.

Morris Patrick: I guess you'll have the tailwind coming from CPI research. You'll have the tailwind from the increased tenences in AirTel. You will have a presumably a headwind from the lost 1,100 tenences. So it's just if you can work us through some moving parts. Even if you can't say you think EBITDA will go up or not in Nigeria next year. Thank you.

Morris Patrick: Let's talk about that last one first. So, Maurice, I mean, you're right. We're we're too early for 2025 metrics and guidance that you have started to unpack some of the moving parts that the another element I would point you to is macro economically speaking. Obviously, the biggest drive for IHS in 2024 so far and and one looks like it's going to be for the rest of 24 was the Q1 devaluation. So obviously there was a significant dip in revenue and earnings in Q1 post the NIRD evaluation, which is then now rebounded in Q2.

Morris Patrick: But obviously as you drop that quarter of dip, let's say, then you start to get a more even run rate through the back end of the year. So as you move forward into 2025, you know, we'll we'll be having a good hard think about what our forward curve looks like. But certainly at this point in time, more would hope it doesn't include any kind of form of step change, but let's see.

Morris Patrick: So that that's probably one area to look at. You're absolutely right in Nigeria, organic growth being driven by by Airtel. MTN continues to do business, by the way. So they'll come through as well. We're seeing plenty of traction in Brazil towards the back end of this year and into next year around new build sites around colorcation around more lease up, excuse me, more lease amendments as 5G starts to roll out more seriously.

Morris Patrick: I think I think it relates to the 5G take up while it's there. I think it's been a bit slower than people had originally thought, but it's now starting to gather some pace. So I think we're going to see that come through into next year. So and then you're right in terms of contractual resets, you know, those will all flow through as usual. So, you know, those are some of the moving parts without us putting numbers on it yet. And obviously it's good early for that. Thank you.

Jim Schneider: I'm on the identification point. Yeah, the identification point. I mean, I think it's a little bit to do with different markets, a different point in the technology cycle, right? So I'm not sure you can draw a complete apples to apples across it. Our markets are largely forgy penetrated now and we're sort of on that cusp of 5G. We're starting to see it a little bit in Nigeria, but early days, we're starting to see a bit of it in South Africa.

Jim Schneider: I would still say early days, but more advanced than Nigeria. And as I just mentioned, Latin, it's starting to flow now. So I think it's more a question of where are we in the technology cycle of the given markets, recognizing that, you know, over the last few years, we've continued to add, you know, thousands and thousands of lease amendments and collocations as well. Just keep in mind, Helios report those two metrics differently. How we do we split them out? They merge them. So just keep that in mind.

Operator: Health, just one, one very small question of our May, just on the CapEx guidance, you reiterated the 300 of 370. I think the first half you're running 110. So we'll below that run rate. I don't think you've got a huge stuff up in BTS. What's some, what's driving the kind of significant to which why is this on the CapEx? It's a fair point. We've got a little step up in BTS CapEx as we're delivering our pipelines and a little step in fiber as well.

Operator: But we'll see how that how that guidance go, that guidance number goes. We we've been looking at whether that's the right right metric to retain or or maybe trim slightly and we'll look at that again as we go through key three. We are certainly trending at the bottom end of that range. Thanks so much.

Operator: And that brings us to the end of the IHS holding limited second quarter 2024 earnings results call. Should you have any questions, please contact the investor relations team via the email address investor relations at iHStowers.com. The management team, thank you for your participation today and wish you a good day.

Thank you.