IHS (US:IHS)2025-08-12 13:30Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $433 million, representing an 11% organic growth driven by colocation, lease amendments, new sites, and CPI escalators [7][12] - Adjusted EBITDA was $248.5 million with a margin of over 57%, stable year-on-year, indicating continued financial discipline [7][19] - ALFCF was $54 million, reflecting a 19% decrease year-on-year due to a different interest rate profile following the November 2024 bond refinancing [15][19] - Total CapEx was $46 million, down 14% year-on-year, attributed to more disciplined capital allocation [7][19] Business Line Data and Key Metrics Changes - In Nigeria, revenue was $260 million, with strong organic growth of over 10% year-on-year despite a reduction in revenue from vacated tenants [20][21] - The Sub-Saharan African segment saw an 18% increase in revenue, while adjusted EBITDA decreased by 4% year-on-year due to higher costs [24] - The LatAm segment experienced 6% organic growth year-on-year, with towers and tenants growing by 7% and 9.7% respectively [25] Market Data and Key Metrics Changes - The Nigerian naira depreciated year-on-year, impacting reported revenue but remaining stable in 2025 [14][23] - The average FX rate for the naira was $15.81 to the dollar in 2025, compared to $13.92 in 2024 [14][23] - Macroeconomic indicators in Nigeria showed positive trends, including a drop in inflation and an increase in crude oil production [22][23] Company Strategy and Development Direction - The company is focused on organic growth, efficiency, and cash flow, with plans to prioritize debt repayment while exploring growth opportunities [10][11] - There is an ongoing assessment of potential asset disposals to enhance shareholder value, with a focus on maintaining growth [10][52] - The company aims to leverage technology and AI to unlock further efficiencies [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macroeconomic environment and telecom market performance, particularly in Nigeria [6][11] - The full-year 2025 outlook has been raised across all key metrics due to strong performance and improving conditions [10][29] - The company expects to continue reducing net leverage and is considering introducing dividends or share buybacks as it approaches the low end of its leverage range [10][29] Other Important Information - The company repaid $154 million of high-interest debt, lowering the weighted average cost of debt by 100 basis points [8][27] - The consolidated net leverage ratio was 3.4x, down from 3.9x a year ago, with expectations for further reduction by year-end [8][29] - Liquidity remains strong at over $830 million, even after debt repayments [10][28] Q&A Session Summary Question: What is driving the strong performance in new lease amendments and colocations? - Management indicated that the strong performance is primarily driven by normal activity in Nigeria and Brazil, with expectations for continued strength through the year [36][37] Question: Can you elaborate on the expected ramp in CapEx for the second half of the year? - Management confirmed that the CapEx guidance is loaded for H2, primarily due to rollout projects in Brazil and other parts of Sub-Saharan Africa [38][39] Question: How do you expect organic growth to trend heading into 2026? - Management anticipates continued strength in collocations and lease amendments, particularly in Nigeria and Brazil, with expectations for higher numbers than last year [42][44] Question: What is the rationale for considering additional asset sales? - Management stated that further disposals would be considered if they drive shareholder value, with a focus on maintaining growth while returning capital to shareholders [48][52] Question: What is the outlook for interest costs moving forward? - Management is focusing on repaying expensive debt and optimizing the balance sheet, but did not provide specific forecasts for interest rates [74][79]