CONSOLIDATED HIGHLIGHTS – FIRST QUARTER 2024

• Revenue of $417.7 million decreased 30.7% (or increased 35.5% organically) reflecting a $399.1 million year-on-year foreign exchange ("FX") headwind largely as a result of the 64.9% devaluation of the Nigerian Naira ("NGN") when comparing the first quarter, 2024 to the first quarter, 2023 average FX rate
• Adjusted EBITDA of $185.2 million (44.3% Adjusted EBITDA Margin) decreased by 44.8%, reflecting a $182.5 million year-on-year FX headwind largely as a result of the devaluation of the NGN when comparing the first quarter, 2024 to the first quarter, 2023 average FX rate
• Loss for the period was $1,557.3 million of which $1,398.7 million relates to unrealized FX losses
• Cash from operations was $93.0 million
• Adjusted Levered Free Cash Flow ("ALFCF") was $43.1 million
• Total Capex was $53.1 million
• Reiterating 2024 guidance for revenue of $1,700-1,730 million, Adjusted EBITDA of $935-955 million, ALFCF guidance of $285-305 million, Capital expenditure ("Total Capex") of $330-370 million and net leverage ratio target remains 3.0x-4.0x

LONDON--(BUSINESS WIRE)--IHS Holding Limited (NYSE: IHS) ("IHS Towers" or the "Company"), one of the largest independent owners, operators, and developers of shared communications infrastructure in the world by tower count, today reported financial results for the first quarter ended March 31, 2024.

Sam Darwish, IHS Towers Chairman and Chief Executive Officer, stated, "We're reporting solid performance across our key metrics when considering the further significant devaluation of the Nigerian currency – the Naira – that took place during the second half of 2023 and continued into the first quarter of 2024. Results were broadly in-line with our expectations while ALFCF meaningfully outperformed due to timing. We expect to see more positive momentum in the second quarter as our contract resets kick-in post the devaluation in Q1'24. As such, we are maintaining our 2024 guidance, including our FX assumptions.

We've made strong commercial progress since the beginning of the year across our African business. Organic growth for the quarter was 35%. Groupwide, we added 270 tenants and 523 lease amendments and built 216 towers, including 158 in Brazil. We previously announced the signing of a new 3,950 tenant multi-year roll-out agreement with Airtel in Nigeria in February, which also included a three-year contract extension. We have renewed our master lease agreement with MTN in Zambia for a further 10 years and also just extended our MLA with MTN South Africa by another two years until 2034.

For the remainder of the year, we expect an acceleration in our KPIs as the underlying trends driving our business remain healthy and the impact of our FX resets that are associated with the Naira devaluation that occurred this quarter start to meaningfully benefit our Adjusted EBITDA margins.

During the quarter the average FX rate for the U.S. dollar to the Naira was 1,316 and was in-line with our guidance of 1,315. This, however, compares to 815 in Q4'23 and 461 a year ago, and equates to a $133 million headwind quarter-over-quarter and a $392 million headwind year-over-year. We however have seen the Naira appreciate vs. the peak rates we saw in March, although it remains volatile. We've also seen a material improvement in U.S. dollar availability in Nigeria and have upstreamed $61 million to Group since the end of the quarter.

Regarding our strategic review, we continue to look at all options through a value creation lens with a goal of maximizing the value of our assets and therefore value for shareholders over the near, medium and long term. There are a number of areas of focus here. First, increasing our operating profitability and substantially reducing our capex to increase cash flow generation, which is reflected in our 2024 guidance and implies a notable step-up in Adjusted EBITDA margins for the remainder of the year and a significant reduction in capex year-over-year. Second, we continue to review our portfolio of markets to determine the right composition for IHS going forward. This is expected to include the disposal of certain markets with a target of raising $500 million to $1 billion over the next 12 months. And third, capital allocation of increased cash flow and disposal proceeds raised are expected to be primarily utilized to reduce debt. However, we will also consider deploying excess proceeds through share buybacks and / or introducing a dividend policy. To be clear, these initial targets do not rule out further initiatives to continue increasing shareholder value, which we continue to assess in parallel.

While it's only been two months, we're off to a good start, with significant work already completed by us and our advisors to identify and analyze these various opportunities. We will continue providing updates as we progress.

Lastly, on governance, as previously disclosed in January 2024, we reached a settlement agreement with Wendel reflecting a commitment to strong corporate governance and constructive shareholder engagement. IHS' Board of Directors are supportive of the proposals being put forward by Wendel and recommends investors vote to approve these changes at our next AGM which is expected to occur in June. Should shareholders support these proposals, we will have better aligned our governance policies with that of mature U.S. listed companies, which was an important goal we set at the time of our public listing."

RESULTS FOR THE FIRST QUARTER 2024

The table below sets forth select financial results for the quarters ended March 31, 2024 and March 31, 2023:

* Re-presented to reflect the remeasurement period adjustments, as required by IFRS 3, in respect of updates to the accounting for the MTN SA Acquisition in May 2022.

Impact of Nigerian Naira devaluation

In mid-June 2023, the Central Bank of Nigeria implemented steps to unify the Nigerian FX market by replacing the old regime of multiple exchange rate segments into a single Investors and Exporters ("I&E") window within which FX transactions would be determined by market forces and which was subsequently renamed NAFEM (Nigeria Autonomous Foreign Exchange Market) in October 2023. The Group uses the USD/NGN rate published by Bloomberg for Group reporting purposes.

As a result, the Naira devalued 37.3% between the period immediately prior to the announcement and the month end rate as of June 30, 2023, from ₦472.3 to $1.00 as of June 14, 2023 to ₦752.7 to $1.00 as of June 30, 2023. The Naira continued to devalue by a further 17.4% in the second half of 2023 and closed at a rate of ₦911.7 to $1.00 as of December 31, 2023.

In January 2024, there was a further significant devaluation of 37.4% in the Naira to ₦1,455.6 to $1.00 as of January 31, 2024, with the Naira closing at a rate of ₦1,393.5 to $1.00 as of March 31, 2024. Due to the Naira devaluation, Revenue and segment Adjusted EBITDA were negatively impacted by $392.1 million and $178.5 million, respectively, in the first quarter of 2024, based on an average rate used of ₦1,315.9 to $1.00 when compared to the average rate of ₦461.4 to $1.00 used in the first quarter of 2023. This negative impact on Revenue and segment Adjusted EBITDA was partially offset by $173.0 million in contract resets during the same period. In addition, the Naira devaluation resulted in an impact on finance costs, specifically related to unrealized FX losses on financing of $1,369.2 million in our Nigeria segment. This is due to the USD denominated historical internal shareholder loans from Group entities to Nigeria and USD denominated third party debt. As the functional currency of the Nigeria businesses is NGN, these USD balances have been revalued in NGN using the rate as of March 31, 2024 resulting in an increase in unrealized loss on FX.

Results for the three months ended March 31, 2024 versus 2023

During the first quarter of 2024, revenue was $417.7 million compared to $602.5 million for the first quarter of 2023, a decrease of $184.8 million, or 30.7%. Organic revenue⁽¹⁾ increased by $213.7 million, or 35.5%, driven primarily by FX resets and escalations. Aggregate inorganic revenue growth was $0.7 million, or 0.1%, for the first quarter of 2024, which related to the sixth stage of the Kuwait Acquisition. The increase in organic growth was more than offset by the non-core impact of negative movements in FX rates of $399.1 million, or 66.2% of which $392.1 million was due to the devaluation of the NGN.

Adjusted EBITDA was $185.2 million for the first quarter of 2024, compared to $335.5 million for the first quarter of 2023. Adjusted EBITDA margin for the first quarter of 2024 was 44.3% (first quarter of 2023: 55.7%). The decrease in Adjusted EBITDA reflects the decrease in revenue as discussed above partially offset by the decrease in cost of sales. The reduction in cost of sales was primarily driven by lower diesel pricing and consumption of $31.4 million, alongside a decrease in tower repairs and maintenance costs, security cost, electricity costs and site regulatory permit costs of $12.3 million, $5.0 million, $4.9 million and $3.4 million, respectively. These decreases were partially offset by an increase in net FX losses on cost of sales of $32.4 million.

Loss for the period was $1,557.3 million for the first quarter of 2024, compared to an income of $7.8 million for the first quarter of 2023. The loss for the period reflects the decrease in revenue due to negative movements in FX rates discussed above and an increase in net finance costs, specifically related to the increased unrealized FX losses on financing of $1,347.0 million. This is coupled with a decrease in revenue and an increase in administrative expenses, partially offset by a decrease in cost of sales.

Cash from operations and ALFCF for the first quarter of 2024 were $93.0 million and $43.1 million, respectively, compared to $251.9 million and $154.9 million, respectively, for the first quarter of 2023. The decrease in cash from operations reflects a decrease in operating income and working capital of $148.6 million and $10.3 million, respectively. The decrease in ALFCF was primarily due to the decrease in cash from operations as discussed above, and the increase in net interest paid of $15.3 million, partially offset by a decrease in maintenance capital expenditure, revenue withholding tax and net movement in working capital of $34.0 million, $20.0 million and $10.3 million, respectively.

Segment results

Revenue and Adjusted EBITDA by segment:

Revenue and segment Adjusted EBITDA, our key profitability measures used to assess the performance of our reportable segments, were as follows:

* Re-presented to reflect the remeasurement period adjustments, as required by IFRS 3, in respect of updates to the accounting for the MTN SA Acquisition in May 2022.

(a) Unallocated corporate expenses primarily consist of costs associated with centralized Group functions including Group executive, legal, finance, tax and treasury services.

Nigeria

Revenue for our Nigeria segment decreased by $197.2 million, or 46.4%, to $227.7 million for the first quarter of 2024, compared to $425.0 million for the first quarter of 2023. Organic revenue increased by $194.9 million, or 45.9%, driven primarily by FX resets and escalations. The decrease in revenue was primarily driven by the non-core impact of negative movements in FX rates of $392.1 million, or 92.3%. Revenue for the first quarter of 2023 included non-recurring revenue of $48.1 million. Year-on-year, within our Nigeria segment, Tenants increased by 479, including 541 from Colocation and 137 from New Sites, partially offset by 199 Churned, while Lease Amendments increased by 2,915.

Segment Adjusted EBITDA was $102.9 million for the first quarter of 2024, compared to $271.9 million for the first quarter of 2023, a decrease of $169.0 million, or 62.2%. The decrease in segment Adjusted EBITDA primarily reflects the decrease in revenue discussed above, partially offset by an overall reduction in cost of sales of $25.2 million. This reduction in cost of sales was primarily driven by lower diesel pricing and consumption of $32.0 million, alongside a decrease in maintenance cost, security cost and permits and other fees of $11.3 million, $4.1 million and $3.3 million, respectively, partially offset by an increased FX loss of $31.8 million included within other cost of sales.

SSA

Revenue for our SSA segment increased by $9.2 million, or 7.5%, to $131.3 million for the first quarter of 2024, compared to $122.2 million for the first quarter of 2023. Organic revenue increased by $18.4 million, or 15.1%, driven primarily by escalations and FX resets. The increase in revenue was partially offset by the non-core impact of negative movements in FX rates of $9.2 million, or 7.6%. Year-on-year, within our SSA segment, Tenants increased by 605, including 338 from Colocation, 215 from New Sites and 52 Churned, while Lease Amendments increased by 1,042.

Segment Adjusted EBITDA was $69.7 million for the first quarter of 2024, compared to $65.5 million for the first quarter of 2023, an increase of $4.2 million, or 6.4%. The increase in segment Adjusted EBITDA primarily reflects the increase in revenue discussed above, partially offset by an increase in cost of sales of $4.6 million. The increase in cost of sales was primarily driven by higher power generation of $6.0 million, partially offset by a decrease in maintenance costs of $1.3 million.

Latam

Revenue for our Latam segment increased by $2.1 million, or 4.7%, to $47.8 million for the first quarter of 2024, compared to $45.6 million for the first quarter of 2023. The increase in revenue was driven by the non-core impact of positive movements in FX rates of $2.3 million, or 5.0%. Revenue growth was offset by a decrease of $6.4 million relating to a change in Oi customer contract terms in the first quarter of 2024. Year-on-year, within our Latam segment, Tenants increased by 626, including 951 from New Sites, 207 from Colocation and 9 from acquisition of tenants, partially offset by 541 Churned, while Lease Amendments increased by 131.

Segment Adjusted EBITDA was $33.8 million for the first quarter of 2024, compared to $31.2 million for the first quarter of 2023, an increase of $2.7 million, or 8.6%. The increase in segment Adjusted EBITDA primarily reflects the increase in revenue discussed above and a decrease in allowance for doubtful debt of $2.9 million, partially offset by an increase in employee costs and cost of sales of $1.3 million and $0.8 million, respectively.

MENA

Revenue for our MENA segment increased by $1.2 million, or 12.1%, to $10.9 million for the first quarter of 2024, compared to $9.7 million for the first quarter of 2023. Organic revenue increased by $0.6 million, or 6.0%, driven primarily by New Sites and escalations and grew inorganically in the period by $0.6 million, or 6.5%. Year-on-year, within our MENA segment, Tenants increased by 141, including 109 from tenant acquisition, 44 from New Sites, 1 from Colocation, partially offset by 13 Churned.

Segment Adjusted EBITDA was $6.1 million for the first quarter of 2024, compared to $3.7 million for the first quarter of 2023, an increase of $2.4 million, or 65.6%. The increase in segment Adjusted EBITDA primarily reflects the increase in revenue discussed above as well as a decrease in net FX loss included in administrative expenses of $0.8 million.

INVESTING ACTIVITIES

During the first quarter of 2024, capital expenditure ("Total Capex") was $53.1 million, compared to $152.6 million for the first quarter of 2023. The decrease is primarily driven by lower capital expenditure for our Nigeria, SSA and MENA segments of $76.7 million, $22.5 million and $1.2 million, respectively, partially offset by an increase in capital expenditure of $1.6 million for our Latam segment. The decrease in Nigeria was primarily driven by decreases of $35.0 million related to Project Green, $29.9 million related to maintenance capital expenditure, $6.5 million from augmentation capital expenditure, $2.1 million for other capital expenditure and $1.6 million from New Sites capital expenditure. The decrease in SSA was primarily driven by decreases of $13.0 million in refurbishment capital expenditure, $5.2 million related to maintenance capital expenditure and $3.3 million in corporate capital expenditure. The increase in Latam is primarily driven by increases of $8.7 million related to New Sites capital expenditure, $2.5 million from augmentation capital expenditure and $1.2 million related to maintenance capital expenditure, partially offset by a decrease of $6.1 million related to fiber capital expenditure, $2.1 million in corporate capital expenditure and $0.5 million from purchase of land for new or existing sites. The total capital expenditure incurred on Project Green from commencement until March 31, 2024, was $205.6 million, of which a saving of $1.4 million was recognized in the first quarter of 2024.

FINANCING ACTIVITIES AND LIQUIDITY

Below is a summary of key facilities we have entered into, repaid or amended during the first quarter of 2024. Approximate U.S. dollar equivalent values for non-USD denominated facilities stated below are translated from the currency of the debt at the relevant exchange rates on March 31, 2024.

IHS Holding (2022) Bullet Term Loan Facility

In March 2024, the available commitments under the IHS Holding 2022 Term Loan were further voluntarily reduced by $70.0 million.

As of March 31, 2024, $370 million of the IHS Holding (2022) Bullet Term Loan Facility was drawn. The majority of the drawn proceeds have been applied toward the prepayment of the IHS Holding Bridge Facility, the U.S. dollar tranche of the Nigeria 2019 Facility and general corporate purposes.

CIV (2023) Term Loan

In February 2024, €56.1 million (approximately $60.5 million) and XOF 7,109.0 million (approximately $11.7 million) was drawn down under the CIV 2023 Term Loan and the proceeds were applied towards, inter alia, the repayment of the IHS Côte d'Ivoire S.A. Facility.

As of March 31, 2024, an aggregate amount of €56.1 million and XOF 7,109.0 million (approximately $72.2 million) has been drawn down under this facility.

IHS Côte d'Ivoire S.A. Facility

The IHS Côte d'Ivoire S.A. Facility was fully repaid in February 2024 using the proceeds received from the initial drawdown of the CIV 2023 Term Loan.

IHS South Africa Overdraft

As of March 31, 2024, ZAR 200.4 million (approximately $10.6 million) has been drawn down under this facility.

Nigeria (2023) Revolving Credit Facility

As of March 31, 2024, NGN 15.0 billion (approximately $10.8 million) has been drawn down under this facility.

IHS Holding (2024) Term Facility

IHS Holding Limited entered into a $270.0 million loan agreement on March 8, 2024 (as amended and/or restated from time to time, the "IHS Holding 2024 Term Facility"), between, amongst others, IHS Holding Limited as borrower and Standard Chartered Bank (Singapore) Limited as the original lender. The loan is guaranteed by IHS Netherlands Holdco B.V., IHS Netherlands NG1 B.V., IHS Towers NG Limited, IHS Netherlands NG2 B.V., Nigeria Tower Interco B.V., INT Towers Limited and IHS Nigeria.

The interest rate per annum applicable to loans made under the IHS Holding 2024 Term Facility is equal to Term SOFR, plus a margin (ranging from 4.50% to 7.00% per annum over the duration of the IHS Holding 2024 Term Facility), based on the relevant margin step-up date). IHS Holding Limited also pays certain other fees and costs, including fees for undrawn commitments.

The IHS Holding 2024 Term Facility is scheduled to terminate on the date falling 24 months from the date of the loan agreement and is repayable in installments.

As of March 31, 2024, $270.0 million of the IHS Holding 2024 Term Facility was drawn down. The majority of the drawn proceeds have been applied toward the repayment of the Letter of Credit Facilities in Nigeria.

Letter of Credit Facilities

As of March 31, 2024, IHS Nigeria Limited has utilized $5.8 million through funding under agreed letters of credit. These letters mature on June 30, 2024, and their interest rates range from 12.00% to 15.55%. These letters of credit are utilized to fund capital and operational expenditure with suppliers.

As of March 31, 2024, INT Towers Limited has utilized $17.5 million through funding under agreed letters of credit. These letters mature on June 30, 2024, and their interest rates range from 12.00% to 15.75%. These letters of credit are utilized to fund capital and operational expenditure with suppliers.

As of March 31, 2024, Global Independent Connect Limited has utilized $1.0 million through funding under agreed letters of credit. These letters mature on June 30, 2024, and their interest rates range from 13.25% to 15.25%. These letters of credit are utilized to fund capital and operational expenditure with suppliers.

FINANCING ACTIVITIES AND LIQUIDITY AFTER REPORTING PERIOD

Below is a summary of key facilities we have entered into, repaid or amended after the first quarter of 2024 up to May 10, 2024.

IHS Holding 2022 Term Loan

In April 2024, $60.0 million in available commitments were drawn down under this loan agreement. As of May 10, 2024, IHS Holding 2022 Term Loan has been fully drawn down in an amount of $430.0 million.

Nigeria (2023) Revolving Credit Facility

As of May 10, 2024, NGN 27.8 billion (approximately $19.9 million) has been drawn down under this facility.

IHS South Africa Overdraft

As of May 10, 2024, ZAR 128.5 million (approximately $6.8 million) has been utilized under this facility.

OTHER ACTIVITIES AFTER REPORTING PERIOD

Peru Share Purchase Agreement

On April 30, 2024, we completed the sale of our subsidiary in Peru, IHS Peru S.A.C., to the affiliates of SBA Communications Corporation. The subsidiary's non-current assets classified as "Assets held for sale" will be derecognized in the second quarter of 2024.

MTN South Africa Power-as-a-Service ("PaaS")

In May 2024, we signed an agreement with MTN South Africa to unwind the power managed services agreement previously entered into with them in 2022. The terms of the agreement provide that, once customary closing conditions precedent have been satisfied, the previously executed power managed services arrangement will be terminated, MTN will buy back power assets, and certain related amendments to our master lease agreement (including a 2 year extension to its term) will take effect.

Media Contacts:

Giles Bethule / Akash Lodh
FGS Global
IHS@fgsglobal.com

OR

communications@ihstowers.com

Investor Contacts:

investorrelations@ihstowers.com