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IHS Holding Limited Reports Fourth Quarter and Full Year 2021 Financial Results

LONDON-Monday 21 March 2022 [ AETOS Wire ]

 

CONSOLIDATED HIGHLIGHTS – FOURTH QUARTER 2021

  • Completed $378 million IPO on the NYSE on October 14, 2021

  • Issued $500 million aggregate principal amount of 5.625% Senior Notes due 2026 and $500 million aggregate principal amount of 6.25% Senior Notes due 2028 on November 18, 2021, to refinance the $510 million of 7.125% Senior Notes due 2025 and for general corporate purposes

  • Revenue increased 12.1% (or 14.5% organically) to $415.6 million

  • Loss for the period was $72.3 million

  • Adjusted EBITDA was $216.6 million and Adjusted EBITDA margin was 52.1%

  • Cash from operations was $190.2 million

  • Recurring Levered Free Cash Flow (“RLFCF”) was $87.9 million

  • Signed a partnership agreement with Egypt Digital Company for Investment S.A.E. to obtain a license from the National Telecom Regulatory Authority (“NTRA”) to construct, operate and lease telecom towers in Egypt, completed the acquisition of I-Systems with TIM Fiber and signed agreements to purchase 5,709 towers from MTN in South Africa.

CONSOLIDATED HIGHLIGHTS – FULL YEAR 2021

  • Revenue increased 12.6% (or 16.1% organically) to $1,579.7 million

  • Loss for the period was $26.1 million

  • Adjusted EBITDA was $926.4 million and Adjusted EBITDA margin was 58.6%

  • Cash from operations was $788.1 million

  • Recurring Levered Free Cash Flow was $406.2 million

  • Completed the acquisition of Skysites, Centennial Colombia and the Centennial Brazil.

(BUSINESS WIRE) -- IHS Holding Limited (NYSE: IHS) (“IHS Towers” or the “Company”), one of the largest independent owners, operators and developers of shared telecommunications infrastructure in the world by tower count, today reported financial results for the fourth quarter and full year ended December 31, 2021.

Sam Darwish, IHS Towers Chairman and Chief Executive Officer, stated, “I am pleased to be reporting our results today for the fourth quarter and full year 2021, as IHS delivered continued, strong financial and operational performance while accomplishing many actions that further strengthen our position.

In addition to listing on the New York Stock Exchange in October, IHS executed a $1 billion bond offering and refinancing, entered the Egyptian market through a licensed partnership, closed the TIM Fiber transaction to create I-Systems, a leading fiber company in Brazil, and announced agreements to acquire MTN’s portfolio of 5,709 towers in South Africa, which we expect will make IHS the leading independent tower company in South Africa upon closure.

We ended 2021 as the fourth largest independent multinational tower company with over 31,000 towers spanning nine countries on three continents and, in January 2022, we announced the acquisition of the GTS SP5 portfolio of 2,115 towers in Brazil, after which IHS will become the third largest towerco in Brazil. I am delighted to say that, following consummation of the South African and GTS acquisitions, IHS will become the third largest independent multinational towerco globally by tower count, with over 38,000 towers.

As we have shown, we have deepened our commitment to Africa while also pursuing our diversification strategy, building upon our entrance into Latam and the Middle East, and continuing our strong investment in organic growth, including in ancillary technologies such as small cells, DAS and fiber. We remain excited about the digital infrastructure opportunities available to us in emerging markets, where our critical infrastructure and approach to sustainability helps connect underserved communities to bridge the digital divide. We look forward to more opportunities in 2022 as several of our key markets such as Brazil and Nigeria begin to rollout 5G technologies.”

RESULTS FOR THE FOURTH QUARTER AND FULL YEAR 2021

The table below sets forth select financial results for the quarters ended December 31, 2021 and December 31, 2020 and financial results for the full years ended December 31, 2021 and December 31, 2020:

 

 

Three months ended

 

 

Twelve months ended

 

 

 

Dec 31,

 

 

Dec 31,

 

Y on Y

 

 

Dec 31,

 

 

Dec 31,

 

 

Y on Y

 

 

 

2021

 

 

2020

 

Growth

 

 

2021

 

 

2020

 

 

Growth

 

 

 

$’000

 

 

$’000

 

%

 

 

$’000

 

 

$’000

 

 

%

 
 

Revenue

 

415,614

 

 

370,727

 

12.1

 

 

1,579,730

 

 

1,403,149

 

 

12.6

 

(Loss)/profit for the period

 

(72,280

)

 

50,230

 

(243.9

)

 

(26,121

)

 

(322,682

)

 

(91.9

)

Adjusted EBITDA(1)

 

216,649

 

 

214,674

 

0.9

 

 

926,396

 

 

819,014

 

 

13.1

 

Cash from operations

 

190,184

 

 

139,613

 

36.2

 

 

788,073

 

 

656,699

 

 

20.0

 

RLFCF(1)

 

87,902

 

 

147,723

 

(40.5

)

 

406,160

 

 

374,842

 

 

8.4

 

(1) Adjusted EBITDA and RLFCF are non-IFRS financial measures. See “Use of Non-IFRS Financial Measures” for additional information and a reconciliation to the most comparable IFRS measures.

The financial results for the quarters ended December 31, 2021 and December 31, 2020 and the financial results for the full year ended December 31, 2021 are unaudited. The financial results for the full year ended December 31, 2020 are extracted from the audited financial statements for the year then ended.

Overview

In January 2021, March 2021 and April 2021 we closed and integrated the Skysites Acquisition, Centennial Colombia acquisition and the Centennial Brazil acquisition, respectively. In April 2021 and October 2021, we closed the third and fourth phase of the Kuwait Acquisition, respectively. In October 2021 we listed on the NYSE and entered the Egyptian market through a licensed partnership. In November 2021, the Company closed its previously announced transaction with TIM S.A. (“TIM”) to acquire a controlling interest in FiberCo Soluções de Infraestrutura S.A. (“I-Systems”) and signed agreements to purchase 5,709 towers from MTN in South Africa.

During 2020, we closed the CSS Acquisition in February 2020 and the Kuwait Acquisition, in which the first phase closed in February 2020 followed by the second phase in October 2020. Both acquisitions were fully integrated. In 2020, we also amended the contracts with two of our key customers with respect to currency conversion provisions.

Results/comparison of three months ended December 31, 2021 versus 2020

During the fourth quarter of 2021, revenue was $415.6 million compared to $370.7 million for the fourth quarter of 2020, an increase of $44.9 million, or 12.1%. Organic growth was $53.6 million, or 14.5%. Organic growth was driven primarily by escalations, lease amendments and foreign exchange resets, as well as new sites and new colocations. Aggregate inorganic revenue was $11.9 million for the three month period ended December 31, 2021. The increase in organic revenue in the period was partially offset by a negative 5.6% movement in foreign exchange rates of $20.6 million.

Loss for the period was $72.3 million for the fourth quarter of 2021 compared to profit of $50.2 million for the fourth quarter of 2020. The loss for the period reflects the aggregate impact of the increase in revenue discussed above offset by an increase in cost of sales and administrative expenses resulting from incremental costs associated with our transition to public company status and also higher power generation costs. It is further impacted by an increase in net finance costs of $176.4 million, set off by a decrease in total tax expense.

Adjusted EBITDA was $216.6 million for the fourth quarter of 2021 compared to $214.7 million for the fourth quarter of 2020. Adjusted EBITDA margin for the fourth quarter of 2021 was 52.1%. The increase in Adjusted EBITDA primarily reflects the aggregate impact of the increase in revenue discussed above partially offset by increases in cost of sales and administrative expenses resulting from incremental costs associated with our transition to public company status and also higher power generation costs.

Cash from operations and RLFCF for the fourth quarter of 2021 were $190.2 million and $87.9 million, respectively, compared to $139.6 million and $147.7 million, respectively, for the fourth quarter of 2020. The increase in cash from operations primarily reflects the aggregate impact of the increase in revenue discussed above partially offset by increases in cost of sales and administrative expenses. The decrease in RLFCF is due to the increase in cash from operations offset by higher withholding tax from revenue growth in Nigeria, higher lease payments to support growth, higher taxes due to expiring tax credits and increased interest expense.

Segment results

Revenue:

Revenue for each of our reportable segments was as follows:

 

 

Three months ended

 

 

 

 

 

 

 

Dec-31

 

Dec-31

 

 

 

 

 

 

 

2021

 

2020

 

Change

 

Change

 

 

 

$'000

 

$'000

 

$'000

 

%

 

Nigeria

 

299,792

 

273,069

 

26,723

 

9.8

%

Sub-Saharan Africa

 

87,563

 

82,127

 

5,436

 

6.6

%

MENA

 

8,196

 

6,663

 

1,533

 

23.0

%

Latam

 

20,063

 

8,868

 

11,195

 

126.2

%

Total revenue

 

415,614

 

370,727

 

44,887

 

12.1

%

Nigeria

Revenue for our Nigeria segment increased by $26.7 million, or 9.8%, to $299.8 million for the three-month period ended December 31, 2021, compared to $273.1 million for the three-month period ended December 31, 2020. Year-on-year revenue for the three-month period ended December 31, 2021 increased organically by $46.6 million, or 17.1%, driven by an increase in Tenants of 787, which includes Tenants from 317 net new sites, from 8,986 Lease Amendments added and from increases through contractual CPI escalations and foreign exchange reset mechanisms.

Aggregate increases of $46.6 million in organic revenue were partially offset by the impact of negative movements in the Naira to U.S. dollar foreign exchange rate of $19.9 million.

Sub-Saharan Africa

Revenue for our Sub-Saharan Africa segment increased by $5.4 million, or 6.6%, to $87.6 million for the three-month period ended December 31, 2021, compared to $82.1 million for the three-month period ended December 31, 2020. Revenue increased organically by $4.5 million, or 5.5%, driven by increases through contractual CPI escalations and foreign exchange reset mechanisms, and the addition of 155 Lease Amendments, partially offset by a net decrease in Tenants of 207, which includes the impact of net Churn of 832 Tenants not relating to Key Customers, and the impact of a net increase in new sites of 251. Revenue for our Sub-Saharan Africa segment also grew inorganically in the period by $1.4 million from the acquisition of a tower portfolio in Rwanda in April 2021 which resulted in 162 additional towers and 283 additional Tenants. Revenue in the period was partially offset by the year-on-year negative impact of movements in foreign exchange rates of $0.5 million or 0.5%.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220315005752/en/

 

 


Contacts

Sard Verbinnen & Co
Email: IHS-SVC@sardverb.com

Investor Relations:
InvestorRelations@ihstowers.com

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