IHS Holding stock falls 2.8% on weak guidance
IHS
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LONDON – IHS Holding Limited (NYSE: IHS), a leading global provider of shared communications infrastructure, reported its fourth quarter financial results, revealing a challenging period marked by currency devaluation impacts and a significant loss. In premarket trading, IHS Holding’s stock price dropped by 2.80%.
The company’s adjusted earnings per share (EPS) for the quarter was -$1.36, falling short of the analyst consensus of $0.00. Revenue for the quarter was $509.8 million, surpassing the consensus estimate of $477.77 million but representing a 3.1% decline from the same quarter last year.
The company’s performance was significantly affected by the devaluation of the Nigerian Naira, which led to a $271.8 million foreign exchange headwind. However, organically, revenue grew by 48.4% compared to the previous year. Despite the currency challenges, IHS Holding’s adjusted EBITDA marginally increased by 0.6% to $274.2 million, reflecting a 53.8% adjusted EBITDA margin.
The loss for the period stood at a substantial $456.8 million, exacerbated by the ongoing devaluation of the Nigerian Naira and its impact on finance costs, particularly unrealized foreign exchange losses. The company’s cash from operations was $162.1 million, with adjusted levered free cash flow (ALFCF) at $118.2 million, indicating a 22% improvement year-over-year (YoY).
Looking ahead, IHS Holding introduced its 2024 guidance, expecting revenue between $1.7 billion and $1.73 billion, which is below the analyst consensus of $1.98 billion. The company’s guidance assumes an average Nigerian Naira rate of NGN 1,610, compared to NGN 638 in 2023, and anticipates a negative $535 million impact on revenue YoY after adjusting for the impact of foreign exchange resets.
Sam Darwish, Chairman and CEO of IHS Towers, commented on the results, highlighting the strong secular trends in the business and the company’s focus on innovation and operating efficiencies. He also acknowledged the significant currency headwinds in Nigeria and the undervaluation of the company’s equity given Africa’s global market perception.
IHS Holding Limited plans to continue its focus on growth and cash generation, with a significant reduction in capital expenditure and a continued drive for productivity enhancements and cost reductions. The company’s strategic review, guided by its Board of Directors and advisors, including JP Morgan, will explore alternatives to unlock shareholder value across its portfolio and capital allocation priorities.
