Q1 2025 IHS Holding Ltd Earnings Call
[music].
Operator: Good day and welcome to the IHS Hldg Limited first quarter 2025 earning results call for the three month period ended March 31st, 2025. Please note that today's conference is being webcast and recorded. If you'd like to ask a question, please press star and then 1 on your telephone keypad at any time.
Good day and welcome to the IHS holding Limited's first quarter 2025, earning results cool for three months period ended March 31st 2025.
Today's conference is being webcast and recorded.
If you'd like to ask a question. Please press star and then one on your telephone keypad at anytime.
Robert Berg: At this time, I'd like to turn the conference over to Robert Berg. Please go ahead, sir. Thank you operator. Thanks everyone for joining the call today.
Doug: At this time I'd like to turn the conference over to rope that Doug. Please go ahead Sir.
Speaker Change: Thank you operator, and thanks, everyone for joining the call today.
Robert Berg: I'm Robert Berg, Head 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, condensed, consolidated interim financial statements for the three-month period ended March 31st, 2025, with the SEC, which can also be found on the investor relations section of our website, and 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.
Robert: I'm, Robert <unk> head of Investor Relations here IHS with me today are Sam Darwish, our chairman and CEO and Steve Howden as CFO.
Robert: This morning, we filed our unaudited condensed consolidated interim financial statements for the three months period ended March 31st 2025, with the SEC, which can also be found on the Investor Relations section of our website and issues and related earnings release presentation and supplemental deck.
Robert: 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.
Robert Berg: 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 with the cautionary statement 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 that 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.
Robert: Before we discuss the results I would like to draw your attention to the disclaimer fits out at the beginning of the presentation on slide two which should be read in full along with the cautionary statements regarding forward looking statements set out in our earnings release, and 6K filed as well today.
Robert: 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 that's difficult to predict and other factors, which may cause actual results performance or achievements or industry.
Robert: <unk> 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.
Robert Berg: We'll also refer to non-IFRS measures, including Adjusted EBITDA that we view as important in assessing the performance of our business, ALFCF that we view as important in assessing the liquidity of our business, and Consolidated Net Leverage Ratio that we view as important in managing the capital resources 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 Investor Relations section of our website.
Robert: We'll also refer to non <unk> measures, including adjusted EBITDA that we view as important in assessing the performance of our business E. L. F. C. F that we view as important in assessing the liquidity of our business and consolidated net leverage ratio that we view as important in managing the capital resources of our business.
Robert: A reconciliation of non <unk> metrics to the nearest ifr S 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: And with that, I'd like to turn the call over to Sam Darwish, our Chairman and CEO. Thanks, Robert, and welcome everyone to our first quarter 2025 earnings results. We're reporting a strong start to 2025 with solid growth across our key metrics of revenue, adjusted EBITDA, and PNFCF, and a reduction in total capex. all in line with our expectations. As a result, we are pleased to reiterate all elements of our full year 2025 outline.
Sam Darwish: Thanks, Robert and welcome everyone to our first quarter 2025 earnings results call.
Sam Darwish: We're reporting a strong start to 2025% with solid growth across our key metrics of revenue adjusted EBITDA and pay in FCS and a reduction in total capex.
Sam Darwish: All in line with our expectations.
Sam Darwish: As a result, we are pleased to reiterate all elements of our full year 2025 outlook.
Sam Darwish: Our positive quarter results and momentum reflects, one, the continuing macroeconomic stability in our countries, two, the continued strong secular trends that we are seeing across our business, and three, strong operational focus as we continue to benefit from the significant commercial and financial progress that we made in 2024 and continues into 2025. Looking at our revenue, we saw 26% organic growth driven by almost 8% constant currency growth, as we saw increased revenue from collocation, these amendments, new sites, and CPI escalators. Share's quarter revenues also saw a significant benefit from our forex resets and power indexation, which play a vital role in helping to offset currency devaluation or movement in power prices.
Sam Darwish: Our positive quarterly results and momentum reflects one the continuing macroeconomic stability in our countries to the continued strong secular trends that we are seeing across our business and city strong operational focus as we continue to benefit from the significant commercial and financial progress that we made in 2000.
Sam Darwish: 24 and continues into 2025.
Sam Darwish: Looking at our revenue, we saw 26% organic growth driven by almost 8% constant currency growth.
Sam Darwish: We saw increased revenue from Colocation These amendments new sites.
Sam Darwish: CPI escalators.
Sam Darwish: First quarter revenues also saw a significant benefits from our Forex resets empower indexation, which play a vital role in helping to offset currency devaluation or movement in power prices.
Sam Darwish: Our strong organic growth more than offset the impact of the Kuwait disposal, which we completed in December 2024, and some currency depreciation.
Sam Darwish: Our strong organic growth more than offset the impact of the COVID-19 disposal, which we completed in December 2024, and some currency depreciation.
Sam Darwish: Turning to profitability, our adjusted EBITDA reached $253 million in the quarter with a margin of 57.5%, up 1,320 basis points compared to this time last year. ALSCF was $150 million during first quarter 2025, an increase of almost 250% year-over-year, driven by improved profitability and a reshaping of interest payments. Total CapEx was $44 million in the quarter, down 17.8% year over year, given our narrowed focus on capital allocation.
Sam Darwish: Turning to profitability, our adjusted EBITA reached $253 million in the quarter with a margin of 57, 5% up 1320 basis points compared to this time last year.
Sam Darwish: <unk> was $150 million during first quarter 2025, an increase of almost 250% year over year, driven by improved profitability in that east phasing of interest payments.
Sam Darwish: Total capex was $44 million in the cotton down 17, 8% year over year, given our narrowed focus on capital allocation.
Sam Darwish: We continue to assess group-wide costs, TAPAC structures, and new ways to operate our networks, including how we can introduce more technology, especially artificial intelligence, into our ways of working to help us realize future efficiency.
Sam Darwish: We continue to assess group wide cost capex structures, and new ways to operate our networks, including how we can introduce more technology, especially artificial intelligence into our ways of working to help us realize future efficiencies.
Sam Darwish: As we discussed in detail at our recent full year 2024 results, and as you can see from our first quarter results in 2025, we have made significant progress across a number of our strategic initiatives, and our focus on financial discipline and capital allocation is delivering sustained improvements in our profitability and cash flow generation. These improvements, supplemented by select asset disposals, as resulted in a further reduction in our consolidated net leverage ratio to 3.4 times, down from 3.7 times at the end of 2024, and a strong liquidity position with over 900 million dollars of available liquidity at the end of March.
Sam Darwish: As we discussed in detail at our recent full year 2024 results and as you can see from our first quarter results and 2025, we have made significant progress across a number of our strategic initiatives and our focus on financial discipline and capital allocation is delivering sustained improvements in our profitability and cash.
Sam Darwish: Flow generation.
Sam Darwish: These improvements supplemented by select asset disposals as a resulted in a further reduction in our consolidated net leverage ratio to three four times down from three seven times at the end of 2024.
Sam Darwish: And a strong liquidity position with over $900 million of available liquidity at the end of March.
Sam Darwish: Following this strong start to the year, we are continuing to implement our strategy to further improve profitability and cash flow generation while strengthening our balance sheet with the goal of maximizing returns for all our stakeholders. In this regard, we are pleased to today announce further progress in our strategic priority related to asset disposals, as we have agreed to sell 100% of IHS Rwanda for an enterprise value of $274.5 million, implying a transaction multiple of 8.3 times adjusted EBITDA after needs. The agreement to sell our Rwanda operations was carefully considered as part of our strategic initiatives targeted at shareholder value creation options.
Sam Darwish: Following the strong start to the year, we are continuing to implement our strategy to further improve profitability and cash flow generation, while strengthening our balance sheet with the goal of maximizing returns for all our stakeholders.
Sam Darwish: In this regard we are pleased to have today announced third the progress in our strategic priority related to asset disposals. As we have agreed to sell 100% of IHS, Rwanda, but an enterprise value of $274 $5 million, implying a transaction multiple of $8 three.
Sam Darwish: <unk> adjusted EBITDA after leases.
Sam Darwish: The agreement to sell our run the operations was carefully considered as part of our strategic initiatives targeted at shareholder value creation options.
Sam Darwish: The 8.3 times multiple achieved is materially higher than the IHS group multiple, highlighting the value contained within our wider portfolio.
Sam Darwish: The $8 three times multiple achieved is materially higher than the IHS group multiple.
Sam Darwish: Highlighting the value contained within our wider portfolio.
Sam Darwish: We have enjoyed more than 10 years of commercial success in Rwanda and are deeply appreciative to our colleagues, customers, and the government of Rwanda for helping make IHS Rwanda the success it is today. This latest disposal in Rwanda comes after we disposed Kuwait and Peru in 2024, as well as exited the Egyptian market. Not only are we raising the captain we previously targeted, we are also streamlining our markets of focus that remain within the IHS group. Please note that the quarter-on-quarter 0.3 times reduction in leverage from 3.7 multiples to 3.4 multiples does not reflect the proceeds from the Rwanda Disposal.
Sam Darwish: We have enjoyed more than 10 years of commercial success in Rwanda and are deeply appreciative to our colleagues customers and the government of Rwanda for helping make IHS lewanda. The success it has to date.
Sam Darwish: This latest disposal in Rwanda comes after we disposed, Kuwait, and Peru, and 'twenty 'twenty four as one as exited the Egyptian market.
Sam Darwish: Not only are we or even the captain we previously targeted we are also streamlining our markets a focus that remain within the IHS group.
Sam Darwish: Please note that the quarter on quarter 0.3 times reduction in leverage from 3.7 multiples to three points for multiple does not reflect the proceeds from the ROE on the disposal.
Sam Darwish: We will continue to assess if there are additional value-creative disposal opportunities.
Sam Darwish: We will continue to assess if there are additional value creative disposal opportunities.
Sam Darwish: Looking ahead, we remain excited by the strong growth opportunities across our footprint, underpinned by continued 5G deployment across our markets. Our confidence in the outlook for the remainder of the year is further supported by the improving backdrop within our two largest markets, Nigeria and Brazil.
Sam Darwish: Looking ahead, we remain excited by the strong growth opportunities across our footprint underpinned by continue with five G deployment across our markets our.
Sam Darwish: Our confidence in the outlook for the remainder of the year is further supported by the improving backdrop within our two largest markets, Nigeria and Brazil.
Steve Howden: And with that, I will turn the call over to Steve. Thanks Sam and hello everyone. Let's take a look at slide 8 where we show our 1Q25 performance. Our results were in line with expectations and came with a backdrop of a more stable macroeconomic environment in Nigeria. As we look at the results, please note, firstly, the year-over-year comparisons are impacted by the late January 2024 devaluation in the NIRA, which dragged down the 1Q24 comparator. Secondly, the December 2024 Kuwait disposal, meaning no MENA contribution now in 2025. And thirdly, the impact of the renewed and extended contracts with MTN Nigeria signed in August of last year, including associated site chair, continue to impact the comparison.
Steve: And with that I will turn the call over to Steve.
Steve: Thanks, Simon and Hello, everyone.
Steve: Take a look at slide eight where we show a one key twenty-five performance. Our results were in line with expectations and came with a backdrop of a more stable macroeconomic environment in Nigeria.
Steve: As we look at the results. Please notes firstly the year over year comparisons are impacted by the late January 2024 devaluation of the naira, which dragged down the one key twentyfold comparator.
Steve: Secondly, the December 2020 for Kuwait disposal, meaning no mean, a contribution now in 2025.
Steve: And thirdly, the impact of the renewed and extended contracts with MTN, Nigeria signed in August of last year, including associated site churn continued to impact the comparisons.
Steve Howden: In terms of the results themselves, both towers and tenants were down approximately 3% and 1% respectively, year over year, while lease amendments increased by high single digit percentages. The decline in both towers and tenants is primarily a reflection of the divestitures of towers in Kuwait and Peru. And excluding the impact of these disposals, we added 1,375 net tenants year on year. We also saw the initial impact of the 1,050 sites that MTN Nigeria will vacate this year. As of the end of Q1, 183 tenants, including 347 lease amendments, had churned, with an approximate $1.6 million reduction in revenue year-on-year as a result.
Steve: In terms of the results themselves, but towers and tenants were down approximately 3% and 1% respectively year over year, while lease amendments increased by high single digit percentages.
Steve: The decline in both towers and tenants is primarily a reflection of the divestitures of towers in Kuwait in Peru.
Steve: And excluding the impact of these disposals, we added 1375 net tenants year on year.
Steve: We also saw the initial impact of the 1050 sites that MTN, Nigeria will vacate this year.
Steve: As of the end of Q1, 193 tenants, including 347 lease amendments had termed with an approximate $1.6 million reduction in revenue year on year as a result.
Steve Howden: On a reported basis in the first quarter, revenue increased by approximately 5% year-on-year, with organic growth of almost 26%, more than offsetting the 14% depreciation of the Naira against the dollar and the Kuwait disposal. As a reminder, NIRA average FX rate was $1,316 to the dollar in Q1 of last year and $1,527 to the dollar in Q1 of this year. We should caution that given how the Naira has moved in 4Q24, 1Q25, and now into 2Q25, we reset our Nigeria contracts at the beginning of January 2025 at a higher rate than the 1Q25 average rate turned out to be, as the Naira was appreciating in the first quarter.
Steve: On a reported basis in the first quarter revenue increased by approximately 5% year on year with organic growth of almost 26% more than offsetting the 14% depreciation of the naira against the dollar and the Kuwait disposal.
Steve: As a reminder, naira average FX rate was 1316 to the dollar in Q1 of last year.
Steve: <unk> 1527 to the dollar in Q1 of this year.
Steve: We should caution that given how the naira has moved in <unk> 24, <unk> 25, and now into two key twenty-five we reset and Nigeria contracts at the beginning of January 2025 at a higher rate than the one key 25 average rate turned out to be as the naira was appreciating.
Steve: In the first quarter.
Steve Howden: This results in a quarter of FX tailwind in the first quarter. Adjusted EBITDA was up more than 36% year-on-year, while adjusted EBITDA margin was up 1,320 basis points, again comparing to the low point of 1Q24, as well as reflecting our continued cost control and the resilience of our financial model through contract reset. Meanwhile, ALFCF increased by approximately 248%, driven by improved profitability, a low quarter of maintenance capex, and a rephasing of interest payments between quarters following the November bond refinancing. where our bond payments will now reflect in the second and fourth quarters of each year.
Steve: This results in a quarter of FX tailwind in the first quarter.
Steve: Adjusted EBITDA was up more than 36% year on year, while adjusted EBITDA margin was up 1320 basis points again, comparing to the low point of <unk> 24, as well as reflecting our continued cost control and the resilience of our financial model three contract resets.
Steve: Meanwhile, E L. F C F increased by approximately 248% driven by improved profitability, a low quarter of maintenance Capex and the re phasing of interest payments between quarters. Following the November bond refinancing.
Steve: We're a bond payments will now reflect in the second and fourth quarters of each year.
Steve Howden: To put some numbers to this, if we look solely at the phasing of interest on our various group-level dollar bonds, they carry interest of $11 million in each of Q1 and Q3 versus $70 million in each of Q2 and Q4. Our level of CapEx investment decreased by 18% in the quarter, largely driven by the pullback in CapEx as we continue to focus on improving cash generation. And finally, our Consolidated Net Leverage Ratio decreased to 3.4 times, having peaked at 3.9 times in the second and third quarter of 2024, including a reduction of 0.3 times from the fourth quarter to the end of this quarter, well within our target of three to four times.
Steve: To put some numbers to this if we look solely at the phasing of interests on our various group level dollar bonds. They carry interest of $11 million in each of Q1 and Q3.
Versus $70 million in each of Q2 and Q4.
Steve: Our level of Capex investment decreased by 18% in the quarter largely driven by the pullback in Capex as we continue to focus on improving cash generation.
Steve: And finally, our consolidated net leverage ratio decreased to three four times, having peaked at three nine times in the second and third quarter of 2024.
Steve: And creating a reduction of <unk> three times from the fourth quarter to the end of this quarter well within our target of three to four times.
Steve Howden: Slide 9 shows the components of our 1Q25 revenue on a consolidated basis, where you can see how the business delivered a quarter of growth despite the impact of the Naira devaluation and the Kuwait disposal. From a constant currency perspective, revenue grew approximately 8%, driven primarily by CPI escalations, new collocations, and new lease amendments. positive signs of the fundamental underlying tenancy growth continuing across our key markets. Strong organic revenue growth of 26% was supplemented by the benefits of our FX resets and power protection mechanism. The right side again shows the organic growth rates of each of our segments for the quarter, where our Nigeria segment grew approximately 46%, including a large benefit from FX resets and despite the initial impact of the financial terms in the renewed and extended contracts with MTN Nigeria.
Steve: Slide nine shows the components of our <unk> twenty-five revenue on a consolidated basis, where you can see how the business delivered a quarter of growth. Despite the impact of the naira devaluation and the Kuwait disposal.
Steve: From a constant currency perspective revenue grew approximately 8% driven primarily by CPI Escalations, new co locations, our new lease amendments.
Steve: Positive signs of the fundamental underlying tenancy growth continuing across our key markets.
Steve: The strong organic revenue growth of 26% was supplemented by the benefits of our FX resets and power protection mechanisms.
Steve: The right side the game shows the organic growth rates of each of our segments for the quarter, whereas Nigeria segment grew approximately 46%, including a large benefit from FX resets and despite the initial impact of the financial terms and the renewed and extended contracts with MTN Nigeria.
Steve Howden: On slide 10, you can see our consolidated revenue, adjusted EBITDA, and adjusted EBITDA margins for 1Q25. Specifically, in 1Q25, our adjusted EBITDA was $253 million and adjusted EBITDA margin was 57.5%, continuing the trend of higher margins post the 1Q24 dip from that NYRA devaluation. On to slide 11, we show Adjusted Leather Free Cash Flow. In the first quarter of 2025, we generated ALFCF of $150 million, a 248% increase year over year, in line with our expectations and primarily due to the increase in adjusted EBITDA, low maintenance capex in the quarter, and a decrease in net interest paid driven by the rephasing of interest payments.
Steve: On Slide 10, you can see our consolidated revenue adjusted EBITDA and adjusted EBITDA margins for <unk> 25.
Steve: Specifically in <unk> 25, our adjusted EBITDA was $253 million and adjusted EBITDA margin was 57.5% continuing the trend of higher margins post the <unk> 24 dip from that naira devaluation.
Steve: Onto slide 11, we show adjusted Levered free cash flow.
Steve: In the first quarter of 'twenty five we generated E. L. F C F of $150 million.
Steve: 248% increase year over year in line with our expectations and primarily due to the increase in adjusted EBITDA low maintenance capex in the quarter and a decrease in net interest paid driven by the re phasing of interest payments.
Steve Howden: As I mentioned just earlier, the bond payments will now reflect in the second and fourth quarter of the year. In addition, we benefited from the decrease in the withholding tax rate in Nigeria from 10% to 2%. Our ALFCF cash conversion rate was 59.3%. On to CapEx, and in the first quarter, CapEx of $44 million, decreased 18% year on year, continuing last year's trend. The decrease was driven by lower capex on fiber and augmentation capex, and a decline in new site capex, although we still retain a healthy level of new site build in Brazil. On the segment review on slide 12, I'll start, as usual, with Nigeria.
Steve: As I mentioned just earlier the bond payments will now reflect in the second and fourth quarter of the year.
Steve: In addition, we benefited from the decrease in the withholding tax rate in Nigeria from 10% to 2%.
<unk> cash conversion rate was 59, 3%.
Steve: Onto capex within the first quarter Capex of $44 million decreased 18% year on year.
Steve: Continuing last year's trend.
Steve: The decrease was driven by lower Capex on fiber and augmentation Capex and a decline in new site Capex, although we still retain a healthy level of new site build in Brazil.
Steve: On the segment review on Slide 12, I'll start as usual with Nigeria.
Steve Howden: Following the six rate hikes we saw in 2024, the Monetary Policy Committee has continued to keep interest rates steady, with the NPR at 27.5%. Nigeria's FX market stabilised in the first quarter of 2025, and the Naira averaged $1,527 to the dollar in the quarter, albeit an increase year over year, but down from the $1,629 Naira as of the fourth quarter 2024. USD liquidity remains good. We've seen a small decrease in the FX reserves to $38.3 billion at the end of March from $40.9 billion at the end of December last year, and inflation has remained stable at 24.2% as of March.
Steve: The following the six rate hikes, we saw in 2020 for the Monetary Policy Committee has continued to keep interest rates steady with the MPR at 27, 5%.
Steve: Nigeria FX market stabilized in the first quarter of 'twenty, five and the naira averaged 1527 to the dollar in the quarter.
Steve: Albeit an increase year over year, but down from the 1629 naira as of the fourth quarter 2024.
Steve: U S D liquidity remains good.
Steve: We've seen a small decrease in the FX reserves to $38 $3 billion at the end of March.
Steve: $49 billion at the end of December last year.
Steve: And inflation has remained stable at 24, 2% as of March.
Steve Howden: The government continues to make macroeconomic progress and investor confidence seems to be returning. For IHS in Nigeria, 1Q25 revenue of $271 million, increased 19% year on year on a reported basis, driven primarily by FX resets from the low of 1Q24 to now. power indexation, escalations, and tenancy growth. Offsetting factors include the impact of the financial terms in the renewed MTN Nigeria MLAs, including the approximate $1.6 million reduction in revenue year-on-year from the associated reduction in tenancies and lease amendments that I mentioned earlier. Separately, lease amendments continue to be an important driver of growth, increasing 1.4% year-on-year as our customers add additional equipment to our sites, notwithstanding the MTN Nigeria churn.
Steve: The government continues to make macroeconomic progress and investor confidence seems to be returning.
Steve: For IHS in Nigeria, <unk> twenty-five revenue of $271 million increased 19% year on year on a reported basis.
Steve: Given primarily by FX resets from the low of <unk> 24 to now.
Steve: Power indexation, Escalations and tenancy growth.
Steve: Offsetting factors include the impact of the financial terms and the renewed MTN, Nigeria, mla's, including the approximate $1.6 million reduction in revenue year on year from the associated reduction in tenancies and lease amendments that I mentioned earlier.
Steve: Separate lately some elements continues to be an important driver of growth, increasing one 4% year on year as our customers add additional equipment to our sites notwithstanding the MTN Nigeria churn.
Steve: One key twenty-five segment adjusted EBITDAR in Nigeria was $179 million or 74, 1% increase from a year ago with.
Steve Howden: 1Q25 segment adjusted EBITDA in Nigeria was $179 million, a 74.1% increase from a year ago, with the first quarter of last year negatively impacted by the Naira devaluation in that period. Segment-adjusted EBITDA margin was up 2,080 basis points to 66%, given the increase in revenue we've already discussed, and along with a reduction in costs of sales and admin expenses primarily due to the devaluation of the NIRA. In our Sub-Saharan African segment, revenue decreased 8.1% and segment adjusted EBITDA increased 2.9% year-on-year. This performance was primarily due to lower revenues, but also lower associated costs being recognized in South Africa following the unwind of the Power Managed Services Agreement with MTN South Africa that took effect in the second quarter of 2024.
Steve: With the first quarter of last year and negatively impacted by the naira devaluation in that period.
Steve: Segment, adjusted EBITDA margin was up 2080 basis points to 66% given the increase in revenue, we've already discussed and along with the reduction in cost of sales and admin expenses, primarily due to the devaluation of the naira.
And our sub Saharan African segment revenue decreased eight 1% and segment adjusted EBITDA increased two 9% year on year.
Steve: This performance was primarily due to lower revenues, but also lower associated costs being recognized in South Africa. Following the unwind of the power managed services agreement with MTN, South Africa that took effect in the second quarter of 2024.
Steve Howden: These revenue changes have no impact on segment-adjusted EBITDA. Performance has further benefited from new collocations, lower power generation costs, security services and maintenance costs. segment-adjusted EBITDA margin increased 640 basis points as a result to 59.4%. In our LATAM segment, Towers and Tenants grew by 6.7% and 8.2% respectively, versus the first quarter of last year. Revenue decreased by 0.5% because of negative movements in FX rates, but was broadly offset by continued growth in tenants, lease amendments, and new sites. In Brazil, our second largest market with 8,400 towers, macro conditions were more benign this quarter as the Brazilian real was largely flat against the dollar and there were moderate increases in both interest rates and inflation.
Steve: These revenue changes have no impact on segment adjusted EBITDA.
Steve: The performance is further benefited from new co locations lower power generation costs security services and maintenance costs.
Steve: Segment, adjusted EBITDA margin increased 640 basis points as a result of 59, 4%.
In our Latam segment towers, and tenants grew by six 7% and eight 2% respectively versus the first quarter of last year.
Steve: Revenue decreased by <unk>, 5% because of negative movements in FX rates that was broadly offset by continued growth in tenants lease amendments and new sites.
Steve: In Brazil, our second largest market with 8400 towers macro conditions are more benign this quarter as the Brazilian rail I was largely flat against the dollar and they were moderate increases in both interest rates and inflation.
Steve Howden: Moving to LATAM profitability, while segment-adjusted EBITDA increased by 5%, segment-adjusted EBITDA margin increased 420 basis points versus the first quarter of 2024, which mostly reflects a reduction in costs more than offsetting the decrease in revenue.
Steve: Moving to Latam profitability, while segment adjusted EBITDA increased by 5% segment adjusted EBITDA margin increased 420 basis points versus the first quarter of 2024, which mostly reflects the reduction in costs more than offsetting the decrease in revenue.
Steve Howden: As we mentioned last quarter, given our Kuwait disposal and our decision not to commence operations in Egypt, MENA is no longer a reportable segment.
Steve: As we mentioned last quarter, given our Kuwait disposal and our decision not to commence operations in Egypt Mena is no longer a reportable segment.
Steve Howden: Moving to slide 14, we look at our capital structure and related items. At March 31, 2025, we had approximately $4 billion of external debt and IFRS 16 lease liabilities. Of the $4 billion, approximately $2.2 billion represents our bond financing. Most recently, post the end of the first quarter in April this year, the outstanding balance of approximately $86 million equivalent on our Nigeria term loan was fully prepaid using local Naira cash. This NIRA term loan carried a high interest rate and is in line with our focus to reduce debt, particularly high interest debt. Cash in cash equivalents was $629 million as of March 31, bringing our total liquidity to $929 million.
Steve: Moving to slide 14, we look at our capital structure and related items.
Steve: At March 31, 2025, we had approximately $4 billion of external debt and <unk> 16 lease liabilities.
Steve: Of the 4 billion approximately $2 $2 billion represents a bond financings.
Steve: Recently post the end of the first quarter in April this year, the outstanding balance of approximately $86 million equivalent on a Nigeria term line was fully prepaid using local naira cash.
Steve: This naira term loan carried a high interest rate and is in line with our focus to reduce debt, particularly high interest debt.
Steve: Cash and cash equivalents were $629 million as of March 31, bringing our total liquidity to $929 million.
Steve Howden: In terms of where that cash is held, approximately 29% was held in Naira at our Nigeria business, but as I just explained, some of that local Naira cash was used to pay down debt post quarter end. Consequently, while our consolidated net debt was relatively flat at $3.3 billion, quarter over quarter, our consolidated net leverage ratio of 3.4 times at the end of Q1 was down 0.3 times versus the end of December 2024. And as Sam previously highlighted, the 3.4 times leverage does not reflect any proceeds from the Rwanda disposal. We expect leverage to remain within the bottom half of our target, three to four times net leverage ratio in 2025, supplemented by the cash proceeds from the Rwanda disposal once it closes and any other further disposal.
Steve: In terms of where that cash is held approximately 29% was held in naira and Nigeria business, but as I. Just explained some of that local naira cash was used to pay down debt post quarter end.
Steve: Consequently, while our consolidated net debt was relatively flat at $3 $3 billion quarter over quarter, our consolidated net leverage ratio of three four times at the end of Q1 was down North 0.3 times versus the end of December 2024.
Steve: And as Sam previously highlighted the three four times leverage does not reflect any prices from the Rwanda disposal.
Steve: We expect leverage to remain within the bottom half of that target three to four times net leverage ratio in 2025 supplemented by the cash proceeds from the <unk> disposal once it closes and any other further disposals.
Steve Howden: Moving to slide 15, given that the first quarter has been in line with our expectations, we're maintaining our 2025 guidance. As a reminder, our guidance shows further growth in 2025 versus 2024 in our revenues when excluding the impact of the Kuwait disposal and growth in adjusted EBITDA and ALFCF. A couple of points I'd like to further highlight. Firstly, we had a strong first quarter of ALFCF with $150 million generated in the quarter. This phasing of ALFCF through the year was expected and known to us when we set our guidance at the Q4 results. And as I mentioned earlier, the majority of our interest is paid in 2Q and 4Q.
Leading to slide 15 gives.
Steve: Given that the first quarter has been in line with our expectations, we're maintaining our 2025 guidance.
Steve: As a reminder, our guidance shows further growth in 2025 versus 2024, and our revenues when excluding the impact of the Kuwait disposal and growth in adjusted EBITDA and E. L. F C F.
Steve: A couple of points I'd like to further highlight our.
Steve: Firstly, we had a strong first quarter of E. L. F C F with $150 million generated in the quarter.
Steve: Is phasing of LFC up through the year was expected and known to US when we set our guidance at the Q4 results.
Steve: And as I mentioned earlier the majority of our interest is paid in two key and for key.
Steve Howden: And given this and the timing of maintenance CapEx plans, we continue to expect to step down in ALFCF in the second quarter, leaving us on track for our 2025 outlook of $350 to $370 million. And secondly, we continue to assume a full year of contribution from Rwanda in our guidance. However, we expect to close the disposal of our Rwandan operations announced today, during the second half of 2025. And should we need to update our outlook for a lower contribution during this year, we will do so following the completion of the transaction.
Steve: And given this and the timing of maintenance Capex plans, we continue to expect to step down in <unk> in the second quarter, leaving us on track for our 2025 outlook of $350 million to $370 million.
Steve: And secondly, we continue to assume a full year contribution from Rwanda, and our guidance. However, we expect to close the disposal of Arrow ended operations announced today during the second half of 2025.
Steve: And we and should we need to update our outlook for lower contribution during this year, we will do so following the completion of the transaction.
Robert Berg: This now brings us to the end of our formal presentation. We thank you for your time today.
Steve: 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.
Operator: And operator, please now open the line for questions. Thank you. We now begin the question and answer session.
Steve: Thank you well now begin the question and answer session.
Operator: As a reminder if you'd like to ask a question please press star followed by one on your telephone keypad. If you'd like to remove your question that's star followed by two.
Steve: I wonder if you'd like to ask a question. Please press star followed by one on the telephone keypad.
Speaker Change: Terrific question that star felt like say.
Jim Schneider: Our first question for today comes from Jim Schneider of Goldman Sachs. The line is now open, please go ahead. Good morning. Thank you for taking my question. I just wanted to... sort of confirm that the Q1 performance, which is quite strong relative to the street estimates, was indeed sort of in line or roughly in line with your expectations. Maybe anything that you think was a little bit better than you expected in the quarter, I think maybe some of the Sub-Saharan Africa results were a little bit below expectations, but otherwise quite strong across the board. And maybe just kind of as you think about the outlook for 2025, significant beat relative to the street, how would you sort of encourage us to think about any risks to the remainder of the year?
Speaker Change: Our first question for today comes from Jim Schneider of Goldman Sachs. Your line.
Steve: Let's now open. Please go ahead.
Speaker Change: Okay.
Speaker Change: Good morning, Thanks for taking my question.
Speaker Change: I just wanted to.
Speaker Change: Sort of confirm that the Q1 performance, which was quite strong relative to the street estimates was indeed sort of inline or roughly in line with your expectations. Maybe anything that you think was a little bit better than than you expected in the quarter I think maybe some of the sub Saharan Africa results were a little bit.
Speaker Change: Our expectation, but otherwise quite strong across the board and maybe just kind of as you think about the outlook for 2025.
Speaker Change: <unk>.
Speaker Change: Significant beat relative to the street.
Speaker Change: How would you sort of encourage us to think about.
Speaker Change: Any risk to the remainder of the year is there anything in the underlying business that gives you pause or do you think about the 2025 guidance reiteration as more conservatism. Thank you.
Jim Schneider: Is there anything in the underlying business that gives you pause, or do you think about the 2025 guidance reiteration as more conservatism? Thank you.
Jim Schneider: Hi Jim and Steve. Thanks for the question. So yeah, you're right, we had a good beat in Q1. You'll notice from the comments that we made a few moments ago that it was in line with our expectations. So to answer the very first part of your question, yes, the quarter was plus minus as we expected, it was a good strong start to the year. I think a few things just to pull out from what I said a few moments ago in terms of some of the reasons for that. So from a revenue perspective, we carried a bit of a tailwind from an FX point of view, particularly in Nigeria in Q1, given how the Naira was moving as we exited Q4, it appreciated into Q1, which meant that our contracts reset at a slightly higher rate than the average actually turned out to be in the quarter.
Speaker Change: Hey, Jamie safe and thanks for the question so yeah, you're right.
Speaker Change: We had a good date in Q1.
Speaker Change: You'll notice from the comments that we made a few moments ago that it was in line with our expectations say to answer the very first part of your question, Yes, the quarter was a plus or minus as we expected. It was a good strong start to the year and I think she things just to pull out from what I said, a few moments ago in terms of some of the reasons for that from a revenue perspective.
Speaker Change: We carried a bit of a tailwind from an FX point of view, particularly in Nigeria in Q1.
Speaker Change: Given how the naira was moving as we exited Q4.
Speaker Change: <unk> hit into Q1, which meant that our contracts reset at a slightly higher rate than the average actually turned out to be in the quarter.
Jim Schneider: So that then normalizes when we get into Q2. So there's a bit of positivity that we're carrying in Q1 from that. What else would I say? In terms of the 1050 tenancies that are churning from MTN Nigeria, and that was a little bit slower than we had originally planned, still on track, but that continues to be a little bit of a tailwind in Q1. In terms of carrier performance, which is obviously kind of an indicator on health of the industry, and we're continuing to see strong fundamentals from our key customers, particularly if you look at someone like Nigeria, where the 50% subscriber increase in tariff that they were allowed to pass in Q1, that's now starting to take effect, and we've seen in recent weeks a number of our big customers there report really positive Q1s, and also, you know, significantly positive outlook for 2025.
Speaker Change: So that then normalizes when we get into Q2, and so there's a bit of the positivity that we're carrying in Q1 from that.
Speaker Change: What else would I say in terms of the $10 50, tenancies that are churning from MTN, Nigeria and that was a little bit slower than we had originally planned.
Speaker Change: Still on track, but.
Speaker Change: That continues to be.
Speaker Change: A little bit of a tailwind in Q1.
Speaker Change: In terms of carrier performance, which is obviously kind of an indication of health of the industry and we're continuing to see strong fundamentals from our key customers, particularly if you look at someone like Nigeria, where the 50% add a subscriber increase in tariffs that they were allowed to pass in Q1, that's now starting to take effect and we've seen in <unk>.
Speaker Change: Some weeks.
Speaker Change: A number of epic customers that report at where its positive Q1s.
Speaker Change: Eli significantly positive outlook for 2025 site.
Jim Schneider: So yeah, all in all, in good shape. Probably the only other thing, just to reiterate again, I mentioned it a few moments ago, in terms of ALFCF on the beat, a big chunk of that is to do with interest payment timing. We pay semi-annual coupons on our bonds, they've rephased this year. We pay much more interest in Q2 and 4 than in Q1 and 3, so that's also the reason for that, but again, exactly in line with the full year and as expected. And then... That's a call, thanks. And maybe... Oh.
Speaker Change: Yes, all in all in good shape and probably the only other thing just to reiterate again I mentioned, a few moments ago in terms of Lf CF on a date.
Speaker Change: A big chunk of that has to do with interest payment timing and we pay semi annual coupon without bottoms that re phase this year and we pay much more interest in Q2 and four than in Q1 and three so that's that's what we said the reason for that but again exactly in line with the full year and as expected.
Speaker Change: Yes.
Speaker Change: And then color thanks again.
Jim Schneider: Yeah, sorry, Jim, I was gonna say second bucket of questions in terms of the rest of 2025. What do we think about in terms of an essential risk? and therefore are we being conservative? Look, I think it's not long since we set guidance, so we're in that period of year where we're obviously monitoring a lot of factors to see how the year pans out. No doubt we're seeing strength in a variety of elements of our business. The macro in our markets is performing better than we had expected. It's probably a bit early to adjust for that, but that continues to be a positive.
Speaker Change: Yes, sorry, I was going say second bucket. Your question in terms of the rest of 2025, what do we think about in terms of any potential risks.
Speaker Change: And therefore, we're being conservative.
Speaker Change: I think it's not long since we set guidance say and we're in that period, where we're always seeing monitoring a lot of a lot of factors to see how the year pans out.
Speaker Change: We're seeing strength in.
Speaker Change: Variety of elements of our business and the macro market is performing better.
Speaker Change: Than we had expected, it's probably a bit early to adjust for that but that continues to be a positive.
Jim Schneider: But as we know, and I'll answer your question on risks we see, you know, we continue to live in an uncertain world globally from a macroeconomic perspective and that does impact all corporates. And we just have to keep watching that kind of broader macroeconomic environment and how that filters into our country. So, you know, we're in a reasonably fortunate position in our business that we don't have any sort of direct linkage to any kind of trade or tariff situations that we've seen in the last six weeks or so. But obviously, you know, the global macro can be impacted.
Speaker Change: But as we know and I'll answer your question on risks we see.
Speaker Change: We continue to live in an uncertain world globally from a macroeconomic perspective.
Speaker Change: Does impact all corporates.
Speaker Change: And we just have to keep watching that kind of broader macroeconomic environment and how that's filtered into our country site.
Speaker Change: We're in a reasonably fortunate position in our business that we don't have any sort of direct linkage to any kind of trade with tariffs.
Speaker Change: Situations that we've seen in the last six weeks to say.
Speaker Change: But obviously the global macro can be impacted so that's probably the thing that we're looking out for life.
Jim Schneider: So that's probably the thing that we're looking out for most. Otherwise, the business is in pretty good shape. It's helpful, Culler. Thank you.
Speaker Change: Otherwise the business been pretty pretty good shape.
Speaker Change: That's helpful color. Thank you.
Jim Schneider: I just wanted to follow up. Regarding the asset sale program, congratulations on the agreement for Rwanda. But maybe can you give us a sense, I think, Sam, in your commentary, I think the language changed a little bit in terms of evaluating if other asset sales are warranted or would be attractive. So should I imply from that, infer from that, that you've sort of done the initial tranche of what you initially had intended to do, and then anything else from here would be opportunistic, or are you still aggressively pursuing other options? Thank you.
Speaker Change: I just wanted to follow up regarding the asset sale program congratulations on.
Speaker Change: The agreement for for Rwanda, but maybe can give us a sense I think Sam in your commentary I think the language changed a little bit in terms of evaluating if other asset sales are a warrant tender would be attractive so should I imply from that infer from that that.
Speaker Change: You sort of done the initial tranche of what you initially had intended to do and then anything else from here will be opportunistic or are you still aggressively pursuing other options. Thank you.
Sam Darwish: Hi, Jim. Look, we have made material gains towards our strategic goals, as established last year. And we continue to kind of like, take action, including organic action. And I think they're beginning to show in the results. Now, we still believe, however, that the share price is undervalued. So we will definitely continue to consider other options, alternatives, strategic, potentially even disposals, as well. Among other things, to unlock and return shareholder value. So that's a continuous program. I think just to add to that, Jim, we're still, you know, still focused on the same pillars, right. So profitability and cash flow generation within the business, the asset disposals, yes, we've kind of done what we initially set out to do.
Speaker Change: Hi, Jim.
Speaker Change: We have made material gain towards our strategic goals.
Speaker Change: Last year, and we continue to kind of like a take action, including organic actions and I think they are beginning to show in the result.
Speaker Change: Now we still believe however that the share price is undervalued. So we will definitely continue to consider other options alternatives are strategic.
Speaker Change: Potentially even disposals among other things.
Speaker Change: To unlock and return shareholder value. So that's a that's a continuous program.
Speaker Change: I think just to add to that Jim we're still it's still focused on the same pillars, right say profitability and cash flow generation within the business and the asset disposals, yes, we've kind of done with what we had initially set out to do but that doesn't mean, we won't keep looking.
Sam Darwish: But that doesn't mean we won't keep looking. And we've streamlined the group, right. So we're in a more focused position now as a company. And, you know, what it all kind of leads towards, excuse me, leads towards is, you know, revisiting our capital allocation, probably towards the end of this year, into early next year in terms of, you know, what's next for us, we're continuing to make progress around the balance sheet, which is exactly what we said we wanted to do. So we're sort of heading into the direction we wanted to be in a bit more execution over the next quarter or two or three.
Speaker Change: And we've streamlined the great right. So we're in a more focused position now as a company.
Speaker Change: And what it all kind of leads to was it maybe late towards us.
Speaker Change: Revisiting our capital allocation.
Speaker Change: And probably towards the end of this year into early next year in terms of whats next for US we're continuing to make progress around the balance sheet, which is exactly what we said we wanted to today.
Speaker Change: So we're sort of heading into the direction, we want it to be in a bit more execution in the next quarter or two or three and.
Jim Schneider: And, you know, we're in, as I said, we're in pretty good shape. Thank you very much. Thank you.
Speaker Change: As I said, we're in pretty good shape.
Speaker Change: Thank you very much.
Speaker Change: Okay.
Michael Rollins: Our next question comes from Michael Rollins of City.
Speaker Change: Thank you our next.
Speaker Change: Next question comes from Michael Rollins of Citi. Your line is now open. Please go ahead.
Michael Rollins: Your line is now open, please go ahead. Thanks for taking the questions and good morning. So. On the sale of Rwanda.
Michael Rollins: Thanks for taking the questions and good morning. So.
Speaker Change: <unk>.
Speaker Change: On the sale of Rwanda.
Michael Rollins: Can you give us a sense of what the annual organic growth is in that portfolio relative to how you perceive growth in the rest of your portfolio, just to kind of appreciate the characteristics of that asset versus what's left within the company? And then related to that, if we can extrapolate that a little bit in terms of the algorithm. So as you look out on a multiyear you know, how would you describe the annual financial growth algorithm? So, you know, what organic revenue growth, you know, should be on average over a multi-year period, how that translates to EBITDA, and then to the AALFCF per share growth rate.
Speaker Change: Can you give us a sense of what the annual organic growth is in that portfolio.
Speaker Change: Relative to how you perceive growth.
Speaker Change: In the rest of your portfolio just to kind of appreciate.
Speaker Change: The characteristics of that asset versus what's left within the company and then related to that.
Speaker Change: We can extrapolate that a little bit in terms of the algorithms. So as you look out on a multiyear basis.
Speaker Change: How would you describe the annual.
Speaker Change: Actual growth algorithm, so what organic revenue growth should be on average over a multiyear period, how that translates to EBITDA and then to the E. L. F C S per share growth rate.
Michael Rollins: Thank you so much.
Speaker Change: You so much.
Michael Rollins: Hey, Mike. So in terms of Rwanda, obviously, you know, we're bound a little bit by what we have and haven't disclosed. But to give you an idea, that business is about a 2.05 lease up rate. So just over two unique tenants on each tower. And it's a market with really sort of two to three key carriers, right? So it's reached a point where a lot of the growth has happened. ALFCF, continue to target to get our business itself into the mid 40s. And at some point, hopefully we break the 50% margin level. So those are kind of the ways we think about the business as a whole.
Mike: Hi, Mike.
Speaker Change: So in terms of the Rwanda.
Speaker Change: Say rebound a little bit by what we have and haven't disclosed but to give you an idea.
Speaker Change: <unk> business is.
Speaker Change: About a 2.5 lease up right.
Speaker Change: So just over two unique tenants on each tower and it's a market with.
Speaker Change: Really sort of two to three key carriers right.
It has reached a point where a lot of the growth has happened. There is certainly still growth ahead of it in that market.
Speaker Change: That's a pretty forward thinking.
Speaker Change: Economy, they're looking a lot of digitization and they're looking at a lot of <unk> and <unk> rollout site that there is still some room to grow that.
Speaker Change: It came against the backdrop of us wanting to realize that range strategic initiatives.
Speaker Change: We feel like we've got a pretty good deal done there.
Speaker Change: So a good partner in paradigm.
Speaker Change: No the African continent, very well.
Speaker Change: So it was really a.
Speaker Change: A meeting of the minds in terms of achieving all the things we wanted to do and how does that compare to other segments in SSA.
Speaker Change: Said previously that.
Speaker Change: If we walk through the SSA segment, you have countries like everyone does Zambia, countering kind of law and there are more growth oriented businesses, where I would expect to see kind of double digit growth year on year, South Africa was a bit slower than that we've always said that that is probably more of a single digit grow each year.
Speaker Change: So that's kind of the outlook in terms of that particular segment more broadly around the group.
Speaker Change: We continue to reiterate what we've said before we want to be growing revenue double digits, certainly organically preferably in dollar terms.
Speaker Change: That is obviously not.
Speaker Change: Within our guidance for this year given.
Speaker Change: The variety of things that the company is moving through including some of the churn and we've disposed businesses, which means the.
Speaker Change: Base is smaller this year than it was last year, but when you look through our guidance, we've got an implied 12% organic growth.
Speaker Change: At a revenue level and we have a higher implied growth at EBITDA level, and we haven't even higher.
Speaker Change: <unk> growth at <unk> level.
Speaker Change: That's how we kind of want to be looking at this business organically, yes, we want to grow revenue, but we want to grow EBITDA quicker than we're growing revenue wanted to NFC quicker than we're growing EBITDA such that we're a growth profitable cash generative infra.
Speaker Change: Infrastructure play continue to target, 60% plus EBITDA margin that will take some number of years, but we continue to move forward with that IL FCS continues to target to get our business itself into the mid Forty's and at some point hopefully breaking 50% margin.
Speaker Change: Level. So those are kind of the way, we think about the business and as a whole.
Michael Rollins: And as you think about returns of capital to shareholders, what's your sense on timing for an update there? And how are you thinking about? IBACs versus dividends versus just reducing your debt levels much further and getting that down as much as you can over the next few years. Yeah, so maybe I'll take those in reverse order. So, you know, we've been very public and very consistent with the first part of our initiatives, which was to increase profitability, increase cash flow generation, raise some disposal proceeds from asset sales, and pay down some debt. Okay, and we're obviously still executing against that.
Speaker Change: And as you think about returns of capital to shareholders. What's your sense on timing for an update there and how are you thinking about.
Speaker Change: Buybacks versus dividends versus just reducing debt levels much further.
Speaker Change: Getting that down as much as you can over the next few years. Thanks.
Speaker Change: Yes.
Speaker Change: Those in reverse order to say, we've been very public and very consistent with the.
Speaker Change: The first part of our initiatives, which was too.
Speaker Change: Increased profitability increased cash flow generation race and disposal proceeds from asset sales and pay down some debt, okay, and we're obviously still executing against that and we've announced today that Rwanda agreement and Thats going to move through the process to completion and obviously utilization of those proceeds.
Michael Rollins: And we've announced today the Rwanda agreement, and that's got to move through the process to completion and obviously realization of those proceeds. So, you know, debt pay down continues to be a key focus for us. One of the things which is within the disclosure today, it didn't happen in the quarter, it happened just after the quarter, we've paid down approximately $86 million of the term loan that we had in Nigeria. That was our highest interest bearing facility in the group. So we paid that down post quarter end just with excess local cash. So all of the balance sheet initiatives continue at a pace, and we feel pretty good about those.
Speaker Change: So debt Paydown continues to be a key focus for us.
Speaker Change: One of the things, which is within the disclosure today didn't happened in the quarter happened just after the quarter, we paid down approximately $86 million term loan that we had in Nigeria that was our highest interest bearing facility in the group.
Speaker Change: So we pay that down post quarter end, just with excess cash.
Speaker Change: So all of the balance sheet initiatives continue to pace and we feel pretty good about that.
Michael Rollins: Leverage, you know, should be down towards the end of the year. And then as it goes to wider capital allocation, and maybe taking a different route, you mentioned things like share buybacks, like dividends, absolutely on our radar. And that's, that's kind of a topic that we're looking at, as we get a little bit further into the execution of all the in the background.
Speaker Change: And leverage should be down towards the end of the year.
Speaker Change: And then as it goes to why the capital allocation and maybe taking a different route you mentioned things like share buybacks <unk> dividends.
Speaker Change: Really on our radar.
Speaker Change: That's kind of a topic that we're looking at as we get a little bit further into the execution of all the initiatives and maybe a quarter or two's time.
Speaker Change: We will be assessing that in the background.
Michael Rollins: And, and let's see, let's see towards the end of this year. Thanks very much.
Speaker Change: And let's say, let's say towards the end of this year early next year.
Speaker Change: Thanks very much.
Speaker Change: Yeah.
Gustavo Campos: Our next question comes from Gustavo Campos of Jeffreys.
Speaker Change: Thank you. Our next question comes from Gustavo <unk> of Jefferies.
Gustavo Campos: The line is now open, please go ahead. Yes, thank you very much. And congratulations on the results. Yeah, I had a few questions here. First of all, do you still expect to see any growth, EBITDA growth from Nigeria that would be related to the catch up effect of your FX resets? Or do you think that recovery growth driver is over now? And then that growth would be driven by start starting to be more driven by other factors like organic? That's my first question. Thank you. I mean, the FX research Gustavo operate on a quarterly basis, right?
Speaker Change: Your line is now open. Please go ahead.
Speaker Change: Thanks.
Speaker Change: Yeah.
Speaker Change: Yes, Thank you very much and congratulations on the results Yeah I had a few questions here first of all.
Speaker Change: Just curious you expect to see any growth EBITDA growth from Nigeria that would be related to the catch up effect of your FX resets or do you think that recovery growth driver.
And it's over now.
Speaker Change: And then that growth would be driven by Scott starting to be more driven by other factors like organically.
Speaker Change: That's my first question. Thank you.
Speaker Change: I mean, the FX resets Gustavo operate on a quarterly basis I'd say it very much depends on what's happening with the currency movements.
Gustavo Campos: So it very much depends on what's happening with the currency movement. against the dollar. So every quarter we look at what the Naira is to the dollar and we update our currency resets according to that. So I'd like to say that the Naira was going to be stable going forward. It has been really for this year within a range. It's moved around between sort of 1525 at the lows in Q1 and it's been 1600 levels for a little while now. So you know hopefully it's more stable. But yeah, the FX resets are really just a factor of what's happening with the currency.
Speaker Change: Against the dollar as every quarter, we look at all the <unk>.
Speaker Change: The dollar and we update our currency resets according to that site.
Speaker Change: I'd like to say that the <unk> is going to be stable going forward. It has been a.
Speaker Change: Really for this year.
Speaker Change: Within a range.
It's moved around between sort of 15% to 25% of lives in Q1, and it's been six to 800 levels for a little while now.
Speaker Change: I hate to say it is more stable, but yes, the FX resets.
Speaker Change: I really just a factor of what's happening with the currency.
Speaker Change: Yeah.
Gustavo Campos: Yes, that was very clear.
Speaker Change: Yes that was.
Gustavo Campos: Thank you. But just to clarify, I was thinking about, you know, the catch-up effects from previous quarters. You know, assuming the Naira is stable at around 1600 at around current levels, do you see that there's still like a catch-up effect from the last 12 months given the volatility that we've seen in the Naira? Yeah, no, not from the last 12 months because all of our contracts in Nigeria are either monthly or quarterly resetting. So no, they're really kind of as current from a from a quarterly perspective, anyway, they're as current as they can be. Understood.
Speaker Change: Very clear thank you.
Speaker Change: But just to clarify I was thinking about you know the catch up effects from previous quarters.
Speaker Change: Assuming the naira is stable at around 1600 at around current levels do you see that there is still like a catch up effect from the last 12 months given the development.
Speaker Change: Cummins in Ireland.
Speaker Change: And also in the last 12 months because.
Speaker Change: All of our contracts in Nigeria, either monthly or quarterly reset here.
Speaker Change: So now.
Speaker Change: They are really kind of.
Speaker Change: From a quarterly perspective anyway. There is currently they can be.
Speaker Change: Yeah.
Gustavo Campos: Yeah, thank you. Thank you very much.
Speaker Change: Understood Yeah. Thank you. Thank you very much.
Gustavo Campos: Also, just trying to understand here, on the Rwanda sale, one, how much cash are you expecting to receive from this asset sales? Trying to understand, you know, the debt and leases that may be attached to it. and how much EBITDA was generated on that asset over the last 12 months. So it will be all cash received, so it's $274.5 million enterprise value, but there's no debt within that business, it's debt free. So it will effectively be straight through the proceeds. And the EBITDA was 30, high 30s. over the last 12 months. Understood. And that those proceeds are like after taxes, right?
Speaker Change: Also just.
Speaker Change: Trying to understand here.
Speaker Change: On the Rwanda sale, one how much cash are you expecting to receive from these asset sales.
Speaker Change: I understand.
Speaker Change: That's in the future.
Speaker Change: Great.
Speaker Change: And.
Speaker Change: How much EBITDA was generated on that are on that.
Speaker Change: On the over the last 12 months. Thank you.
Speaker Change: Say it will be all cash received so its $274 $5 million enterprise value, but theres no debt.
Speaker Change: Within that business is debt free.
Speaker Change: So it will effectively be straight through to proceeds.
Speaker Change: And EBITDA was 30 <unk>.
Speaker Change: In the last 12 months.
Speaker Change: Understood.
Speaker Change: And that those proceeds are like.
Gustavo Campos: So we should expect, you know, kind of like immaterial taxing tax from that sale. Correct. All right. Yeah. Thank you very much.
Speaker Change: After taxes right.
Speaker Change: Should expect.
Speaker Change: Kind of like in materials.
The background.
Speaker Change: That's fair.
Speaker Change: Correct.
Speaker Change: Alright, yeah. Thank you very much and then.
Gustavo Campos: And then I was also looking to understand better you had half a billion to a billion. Asset Sales Target. I was wondering if now that you know we've moved forward with this program really well, can we get a sense here on whether you will be targeting perhaps the lower end of that range, closer to half a billion, or do you think there's still opportunity to go to all the $1 billion cash proceeds target? That would be very helpful. Yeah, Gustavo, that was a little bit what Sam was saying a few moments ago. So we kind of got to plus or minus the bottom end of that range, with the disposal of Kuwait and with the disposal of Rwanda.
Speaker Change: Also look into to understand better you had a half.
Speaker Change: Half a billion two 1 billion.
Speaker Change: Net sales target.
Speaker Change: Just wondering if now that you know we moved forward with this program really well.
Speaker Change: Can we get a sense here on whether you will be targeting perhaps.
Speaker Change: Lower end of that range closer to half a billion or where do you see.
Speaker Change: There is still opportunity to grow to $1 billion cash proceeds.
Speaker Change: Alright.
That would be great. Thank you.
Speaker Change: Yeah, I can start with that I was a little bit.
Speaker Change: Or was that was saying a few moments ago, we kind of got to plus or minus the bottom end of that range.
Speaker Change: With the disposal of Kuwait space, So all for Wanda.
Gustavo Campos: And what we're doing now is really, you know, continuing to evaluate, and the share price has performed well this year in relative terms, but for us still undervalued and has got a long way to go. So we're continuing to look at what else we can do as a business to continue providing shareholder value. So yeah, we might be a little bit more opportunistic going forward in terms of disposals. But certainly don't want anyone to think we're not still looking at things because we are. You know, we're still focused on getting the share price up from where we are today.
Speaker Change: And what we're doing now is Rudy.
Speaker Change: Continuing to evaluate the share prices performed well this year in relative terms, but for us still undervalued and it's got a long way to go.
Speaker Change: We're continuing to look at what else, we can do as a business too.
Speaker Change: Continue providing shareholder value.
Speaker Change: Yes, we might be a little bit more opportunistic going forward in terms of disposals.
Speaker Change: But certainly don't want anyone to think we're not still looking at things because we are.
Yes, we're still focused on getting the share price up from where we are today, sorry that can come in lots of difficult.
Gustavo Campos: So that can come in lots of different forms. But the balance sheet, Gustavo, is in a very good shape at the moment with $900 million of liquidity. Leverage has gone down to 3.4 times EBITDA, even without including the proceeds of this accretive transaction, which we have done. So from a balance sheet point of view, we're happy, but we continue again to keep drilling organically on rebalancing growth vis-a-vis cash flow generation. Having said that, Steve's point, and what I tried to say earlier, is spot on. We still believe the share price is undervalued. We're still committed to unlock value to shareholders.
Speaker Change: But the balance sheet Gustavo is in a very good shape at the moment with $900 million of liquidity leverage has gone down to three four times EBITDA.
Speaker Change: Even without including the proceeds of this collective.
Speaker Change: Action, which we have done so from a balance sheet point of view.
Speaker Change: We're happy, but we continue again to keep drilling organically on rebalancing growth vis vis cash cash flow generation, having said that steven's point and what I tried to say earlier is spot on we still believe the share price is undervalued.
Speaker Change: <unk> committed to unlock value to shareholders and we will keep exploring.
Gustavo Campos: And we will keep exploring, looking, considering whether disposals, whether buybacks, whether dividends at the right time. This is a big focus of ours at the moment. Understood. Yeah, that's very clear.
Speaker Change: Looking considering whether disposals, whether buybacks whether dividends.
Speaker Change: Dividends at the right time that this is a big focus of ours at the moment.
Speaker Change: Understood.
Gustavo Campos: And last question, if I may, if you could elaborate here, what was the reduction of the MLAs in Nigeria attributed to? And would you expect that to continue for the rest of the year? That would be my last question. And thanks a lot for all the details. So the only thing that's impacting MLAs, well it's not really MLAs, but tenancies in Nigeria is to do with the 1050 sites that we agreed with MTN would leave us during the course of 2025. So that's all as planned and publicly disclosed, you know, back summer of last year.
Speaker Change: That's very clear and the last question if I may.
Speaker Change: If you could.
Speaker Change: Elaborate here.
Speaker Change: Once the reduction of the Mlps in Nigeria attributed to and would you expect that to continue for the rest of the year.
Speaker Change: That would be my last question and thanks, a lot for all the details.
Speaker Change: So if any thing thats impacting M&A is not really emulate the tendencies in Nigeria is to do with the $10 50 sites that we agreed with MTN would lead us during the course of 2025.
Speaker Change: So thats all goes as planned and publicly disguise displays back somewhat last year.
Speaker Change: Yeah.
Gustavo Campos: Understood. Yeah, got it. Thanks again and congrats on the results.
Speaker Change: Understood Yeah got it.
Speaker Change: Thanks, again and congrats on the results.
Gustavo Campos: Thank you.
Speaker Change: Thank you.
Operator: As a reminder, if you'd like to ask a question, that's star 1 by 1 on your telephone keypad.
Speaker Change: Thank you.
Speaker Change: A reminder, if you'd like to ask a question Thats star one by one on the telephone keypad.
Stella Cridge: Our next question comes from Stella Cridge of Barclays. Your line is now open, please go ahead. Hi there, afternoon all, many thanks for all of the updates.
Speaker Change: Our next question comes from stellar courage of Barclays. Your line is now open. Please go ahead.
Stellar Courage: Hi, good afternoon all.
Speaker Change: The updates and.
Stella Cridge: If I could ask on two areas, just on Rwanda side, could you just say specifically what government and regulatory approvals that you expect there, or you need to get there, sorry, or any other items that need to be kind of tied up before that can close? And when you actually get the cash, what specifically do you have in mind? You know, would you potentially take out some bonds early? So that would be the first question.
Speaker Change: I would ask them to areas and just on Rwanda, Frank could you just say specifically what government in particular to the peripheral effect you would expect that or do you need to get there and.
Speaker Change: Or any other items that need to be kind of tied up before that can close.
Speaker Change: And when you actually get the cash specifically do you have in mind.
Speaker Change: Potentially kicking at some point Ali.
Speaker Change: That would be the first question.
Stella Cridge: And the second one is, I didn't see in the materials anything about upstreaming from Nigeria year to date. Was that because you were keen to accumulate the cash there to pay down the term loan? Or was the market like a little bit more difficult in terms of upstreaming? Any additional colour there would be great.
Speaker Change: The second one is <unk>.
Speaker Change: The materials and the thing about up streaming from Nigeria year to date or is that because you have a keen to accumulate the cash there to pay down the term loan or whats the market like a little bit more difficult in terms of kidney and any additional color there would be great.
Speaker Change: Okay.
Stella Cridge: Hi Stella. So in terms of Rwanda on approvals, we need customary approvals, so things like the regulator, which is Rura, and governmental approval for communications infrastructure. So there's nothing out of the ordinary there, just the regular kind of regulatory and government approvals. Otherwise, that's it on CPs. Cash proceeds when it comes, obviously can't talk specifically to bond plans. But you know, things that we're focused on in our maturity waterfall are things like the earlier amounts of bonds, some of them are callable now, some of them will be callable in the coming months towards the end of this year.
Speaker Change: Hi, Stella and so in terms of Rwanda on approvals.
Speaker Change: We need a customer a previous that things like the regulator, which is Laura.
Speaker Change: And governmental approval for communications infrastructure say nothing out of the ordinary that just the regular kind of.
Speaker Change: Regulatory and government approvals otherwise that sit on CP.
Speaker Change: Cash proceeds when it comes I, obviously can't talk specifically to bond funds.
Speaker Change: But things that we're focused on and at maturity waterfall.
Speaker Change: Things like the <unk>.
Speaker Change: Earlier announced bonds some of them are callable now some of them will be callable in the coming months towards the end of this year and we're also looking at our highest interest bearing facilities around the groups I mentioned, a few moments ago around Nigeria, and we have all the higher interest bearing.
Stella Cridge: We're also looking at our highest interest bearing facilities around the group. So I mentioned a few moments ago around Nigeria, and we have other higher interest bearing facilities in places like Brazil as well. So we're kind of mixing around in terms of what we're going to do, but the strategy remains the same, reduce debt, reduce leverage, try and reduce dollar-based debt, and manage the interest expense antenna of whatever is remaining in the group. So that continues to be the plan. And then on upstreaming, no, shouldn't read anything into any change of language. The USD availability remains very good in Nigeria.
Speaker Change: And in places like Brazil, as well and so we kind of mixing around.
In terms of what we're going to do but.
Speaker Change: The strategy remains the same reduce debt reduce leverage.
Speaker Change: <unk> dollar based debt and manage the interest expense antenna.
Speaker Change: Whatever is remaining in the group side.
Speaker Change: That continues to be the plan.
Speaker Change: <unk>.
Speaker Change: And then on upstream ing.
Speaker Change: No you Shouldnt read anything into any change of language and the USD abate a bit you remains very good in Nigeria.
Stella Cridge: We did use obviously a bunch of our local cash post quarter end to pay down that term loan, but we did actually upstream $71 million in the quarter from Nigeria. So yeah, all is good and fine there. To be honest Stella, we feel that Nigeria somehow getting back to business as usual, and this was an extremely important measure when things were tight and things were kind of like unorthodox in that country. Since the removal of the subsidy a while ago and then unification of forex, we feel that the current policies of CBN, Ministry of Finance, and the government are yielding results.
Speaker Change: We did use obviously a bunch of a life of cash post quarter end to pay down that term loan, but we did actually upstream $71 million in the quarter from Nigeria.
Speaker Change: So yes, all is all is good and find that.
Speaker Change: To be honest, we feel that.
Speaker Change: It somehow getting back to business as usual and this was an extremely important measure when things were tight and things were kind of like unorthodox in that country. Since the removal of the subsidy a while ago and then the unification of Forex, we feel that the current the current policies of CBS and Ministry of Finance and the government are yielding results.
Stella Cridge: And that's why we're seeing stability in the country, and hopefully we continue to do that. So we're feeling this is moving into business as usual than anything else. That's the only reason.
Speaker Change: And that's why we're showing we're seeing stability in the country and hopefully we continue to do that so we're feeling this is more moving into business as usual than anything else. That's the only reason.
Stella Cridge: Super. Thanks for all the answers. Thanks all. Thank you.
Speaker Change: Super Thanks for all the answers.
Speaker Change: Thanks Ross.
Speaker Change: Sure.
Operator: That brings us to the end of the IHS Hldg Limited first quarter 2025 earnings results call. Should you have any questions, please contact the Investor Relations team via the email address InvestorRelations at IHSTals.com. The management team, thank you for your participation today and wish you a good day. Thank you.
Speaker Change: Thank you.
That brings us to the end of the IHS holding Ltd. First quarter 2025 earnings results call should you have any questions. Please contact the investor Relations team applies the aim address investor relations at IHS times Dot com.
Speaker Change: My team and I. Thank you for your participation participation today and wish you a good day. Thank you.
Speaker Change: Yeah.
Speaker Change: Uh huh.
Speaker Change: Yeah.
Speaker Change: [noise].
Speaker Change: Okay.