IHS Holding's Q2 2025 Earnings Call: Unpacking Contradictions in CapEx, Asset Sales, and Market Trends

CapEx guidance and rationale, asset sales and capital allocation, capital expenditure strategy, lease amendment growth drivers and expectations, and carrier environment and market trends are the key contradictions discussed in IHS Holding Limited's latest 2025Q2 earnings call



Strong Financial Performance Across Key Metrics:
- IHS Holding reported revenue of $433 million for Q2 2025, ahead of expectations with 11% organic growth.
- Adjusted EBITDA was $248.5 million, with a margin over 57%, and ALFCF was $54 million.
- The growth was driven by colocation, lease amendments, new sites, and CPI escalators, supported by disciplined capital allocation and improving macroeconomic conditions.

Debt Reduction and Balance Sheet Strengthening:
- IHS repaid $154 million of high-interest debt, lowering the blended group interest cost by 100 basis points.
- The company ended the quarter with a consolidated net leverage ratio of 3.4x, down from 3.9x a year ago.
- The debt reduction and improved leverage ratio were achieved through disciplined capital allocation and strategic balance sheet management.

Leverage Goals and Capital Allocation:
- IHS aims to reduce net leverage to the low end of their 3x to 4x target range by the end of 2025.
- As leverage targets are approached, consideration is being given to introducing dividends and/or share buybacks, alongside continued debt reduction.
- The focus on balance sheet management is part of a broader strategy to enhance shareholder value and maximize capital efficiency.

Nigeria Market Performance and Operational Efficiency:
- The Nigerian segment reported revenue of $260 million, with over 10% organic growth despite headwinds from currency depreciation.
- Segment adjusted EBITDA was $171 million, with a margin up 190 basis points to 65.5%.
- Improvements in Nigeria were driven by operational efficiencies, cost savings, and continued demand from customers, supported by a stabilizing macroeconomic environment.