IHS Holding Aktie

Good day, and welcome to the IHS Holdings Limited Third Quarter 2025 Earnings Results Call for the 3-month period ended September 30, 2025. Please note that today's conference is being webcast and recorded. [Operator Instructions]

At this time, I'd like to turn the conference over to Robert Berg. Please go ahead, sir.

Thank you, operator. Thanks to everyone for joining the call today. I'm Robert Berg, Head of Investor Relations here at IHS. With me today are Sam Darwish, our Chairman and CEO; and Steve Howden, our CFO.

This morning, we filed our unaudited condensed consolidated interim financial statements for the 3-month and 9-month periods ended September 30, 2025, with the SEC which can now be found on the Investor Relations section of our website and issued a related earnings release, presentation and supplemental deck.

These are the consolidated results of IHS Holding Limited, which is listed on the New York Stock Exchange under ticker symbol IHS and which comprises the entirety of the group's operations.

Before we discuss the results, I would like to draw your attention to disclaimer set out at the beginning of the presentation on Slide 2, which should be read in full, along with the cautionary statement regarding forward-looking statements set out in our earnings release and 6-K filed as well today.

In particular, the information to be discussed may contain forward-looking statements. By their nature, forward-looking statements involve known and unknown risks uncertainties and other important factors that are difficult to predict and that may be beyond our control, including those discussed in the Risk Factors section of our Form 20-F filed with the Securities and Exchange Commission and our other filings with the SEC.

As a result, actual results, performance or achievements or industry results may be materially different from any future results, performance or achievements or industry results expressed or implied by these forward-looking statements. We'll also refer to non-IFRS measures, including adjusted EBITDA that we view as important in assessing the performance of our business, “ALFCF” that we view as important in assessing the liquidity of our business and consolidated net leverage ratio that we view as important in managing the capital resources of our business.

A reconciliation of non-IFRS metrics to the nearest IFRS metrics can be found in our earnings presentation, which is available on the Investor Relations section of our website.

And with that, I'd like to turn the call over to Sam Darwish, our Chairman and CEO.

Thanks, Rob. Good morning, everyone, and welcome to our third quarter 2025 earnings results call.

I'm pleased to report that we've delivered another quarter of strong results out of expectations with strong performance across all our key metrics, revenue, adjusted EBITDA and ALFCF, while at the same time continuing to delever our balance sheet.

This performance again underscores the effectiveness of our strategy, which is centered on driving organic growth, enhancing efficiency through continued cost control and maximizing cash flow generation.

The operating environment is also providing a tailwind, particularly from favorable foreign exchange movements, but also from a strong fundamental telecom market performance, especially in Nigeria and Brazil. Given the strong year-to-date performance, we are again raising our full year 2025 outlook for revenue, adjusted EBITDA and “ALFCF”. Steve will take you through the details shortly, but the headline is clear.

Our top line momentum is strong. Our focus on profitability is yielding results. Our cash generation is accelerating, and we continue to delever the balance sheet as planned.

Let me walk you through the quarter's highlights. We saw our strongest quarterly financial performance since 2023. Despite a large negative devaluation in quarter 1 '24, and with us selling our Kuwait and Peru businesses over that period. Revenue came at $455 million ahead of plan, with constant currency revenue growth of almost 9%, driven by CPI escalators, colocation, lease amendments and new sites.

Adjusted EBITDA came at $261 million with a margin of 57.5%, an increase of over 6%, reflecting our ongoing commitment to cost control and driving profitability. “ALFCF” came at $158 million, a very strong result driven by targeted actions to enhance cash generation. And total CapEx came at $77 million up 16% year-on-year, reflecting the quarterly phasing of CapEx predominantly in Nigeria.

During the third quarter, we also continued to advance our deleveraging efforts reducing our consolidated net leverage ratio to 3.3x, down 0.6x year-on-year and well within our 3 to 4x target range. This improvement has been further supported by the emission $175 million of proceeds received from the Rwanda disposal shortly after quarter end. Liquidity remains strong, over $950 million again, excluding the Rwanda proceeds received in October, which will take it to well over $1 billion.

So looking ahead, our priorities remain clear. First, maintain our focus on reducing debt while driving continued organic growth across the business. Second, we remain disciplined in how we allocate capital and as we near the lower end of our leverage target, consider introducing dividends and/or share buybacks.

Third, accelerate efficiency gains by integrating more technology and AI into our operations. Fourth actively identify and pursue the most attractive organic growth opportunities in response to strong customer demand, prioritizing opportunities with the highest returns.

And finally, further disposal activity remains under consideration, and we are continuing to assess additional value-creative disposal opportunities.

We remain excited by the substantial opportunities for organic growth across our markets, especially Brazil and Nigeria. Our expanded partnership with TIM in Brazil up to 3,000 new sites highlights how well positioned we are to take advantage of the ongoing rollout of 5G within our footprint.

In Nigeria, carrier tariff hikes and strengthening Naira are underpinning our growth story with robust demand across our footprint were set for sustained growth and strong returns.

As we move forward, we'll stay disciplined, building the business, boosting free cash flow and strengthening the balance sheet, all with a clear focus on delivering shareholder value, while we continue to grow. With this in mind, we expect to share a comprehensive update on our capital allocation priorities at the full year 2025 results. So we look forward to sharing that with you soon.

And with that, I'll hand it over to Steve.

Thanks, Sam, and hello, everyone. Let's take a look at Slide 8, where we show our 3Q '25 performance. We're really pleased with our third quarter results, which again came in ahead of expectations with positive operating and financial progress, supported by the continued favorable macroeconomic environment in Nigeria.

As we look at the results, please note the year-over-year comparisons are impacted by some items. Firstly, the Kuwait disposal in December 2024 means there's no meaner contribution this year. For context, Kuwait added $13 million of revenue and $8 million of adjusted EBITDA in the third quarter of last year.

Secondly, we saw tenancy churn of 2,576 sites, following an updated agreement with our smallest key customer in Nigeria, 9mobile. Under this agreement, they began vacating sites in the third quarter of 2025 and in exchange for a contractual commitment to settle portions of their historic overdue balances through till July 2027. To be clear, we expect this to have only a limited financial impact over the coming years.

And then thirdly, there is the ongoing impact of the near-term site churn linked to the renewed and extended contracts with MTN Nigeria in August of last year.

In terms of the results, year-over-year towers and tenants both decreased approximately 4%, reflecting the impact of the Kuwait disposal, while tenant count also reflects the 9mobile tenancy churn we just addressed. Excluding the impact of these 2 items, we added 1,652 net new tenants year-on-year. Lease amendments increased by more than 2,800, driven by continued incremental demand for ancillary services.

On a reported basis in the third quarter, revenue was 8.3% up, despite a 3% inorganic revenue headwind from the Kuwait disposal. Organic growth was approximately 7%, driven by almost 9% constant currency growth and favorable movements in FX as the Naira continued to appreciate against the dollar.

As a reminder, the Naira average FX rate was “NGN” 1,601 to the dollar in the third quarter of 2024 and was “NGN” 1,523 to the dollar in the third quarter of 2025. Following the end of the quarter, the Naira's continued to appreciate ranging between approximately “NGN” 1,430 and “NGN” 1,470 to the dollar.

As previously mentioned, adjusted EBITDA came in ahead of our expectations, increasing more than 6% year-on-year, despite no longer owning our Kuwait asset, which contributed $8 million back in the third quarter of last year. Adjusted EBITDA margin was down 100 basis points year-over-year, reflecting a now normalized [indiscernible] cost level in our Sub-Saharan African segment and higher power generation costs albeit the margin was up 20 basis points versus last quarter.

Meanwhile, ALFCF increased by more than 80% versus third quarter 2024 with the comparison again distorted by a very different interest rate profile quarter-to-quarter in 2025 versus 2024, which emanates from the November 2024 bond refinancing.

As a reminder, following that refinancing, our bond interest payments are now primarily due in the second and fourth quarters of the year, whereas in 2024, they were more evenly spread.

A level of CapEx investment increased by approximately 16% in the quarter, largely driven by our Nigeria segment, reflecting the phasing of maintenance CapEx and augmentation CapEx for colocation and lease amendments.

Finally, our consolidated net leverage ratio is 3.3x, down 0.6x versus the third quarter of last year. And as Sam mentioned, we're well within our target range of 3 to 4x and expect to be at the low end of the range by the end of 2025. The 3.3x does not yet reflect the sale of our Rwanda business that closed this past October, and therefore, excludes the initial payment of $175 million that we received post quarter end.

Slide 9 shows the components of our 3Q 2025 revenue on a consolidated basis, where you can see how the business delivered organic growth of almost 7% with more than 8% growth on a reported basis, despite the impact of the Kuwait disposal.

From a constant currency perspective, revenue grew approximately 9% driven primarily by CPI escalations, new colocations, new lease amendments and new sites. -- continued positive signs of the fundamental underlying tenancy growth continuing across our key markets.

Our revenue from power index cession declined due to falling diesel prices during the period, the associated fall in diesel costs largely offset this impact, resulting in minimal effect on our adjusted EBITDA and cash flow, and that was more than offset by FX tailwinds mostly from Nigeria.

The right side of the page shows the organic growth rates of each of our segments for the quarter with our Nigeria segment having grown 5%, despite the near-term churn from MTN Nigeria after last year's renewal, and LatAm growing more than 11%, which is mostly Brazil.

As Sam mentioned, we recently signed a new site agreement with TIM that aims to build up to 3,000 sites over 5 years in Brazil with an initial minimum deployment of 500 sites over 2 years across multiple regions of the country. an exciting development, which will help underpin our growth in the LatAm segment over the coming years.

On Slide 10, you can see our consolidated revenue, adjusted EBITDA and adjusted EBITDA margins for 3Q '25, as we've already discussed. And specifically, in 3Q '25, our adjusted EBITDA was $261 million, and our adjusted EBITDA margin was 57.5%, continuing the trend of higher margins we've seen in recent quarters.

On Slide 11, we show our adjusted leverage free cash flow. In the third quarter, '25, we generated ALFCF of $158 million, an 81% increase year-over-year, reflecting actions taken to improve free cash flow generation and the lower interest payment in the quarter as previously said. Our ALFCF cash conversion rate was 60.4%.

On to CapEx. And in the quarter, CapEx of $77 million increased 16% year-on-year, primarily reflecting the phasing of maintenance CapEx and augmentation CapEx in Nigeria, and as Sam said, we will update you on our next phase of capital allocation strategy at the full year 2025 results.

On the segment review on Slide 12, and I'll start with Nigeria. Revenue in the Nigerian segment was $268 million in the quarter. During the quarter, we added over 220 new co-locations and lease amendments continue to be an important driver of growth as we integrated over 1,750 new lease amendments since the end of June, with our customers continuing to add additional equipment to our sites.

This helped lead to organic growth of 5% year-on-year despite an approximate $8 million reduction in revenue from the approximately 510 vacated tenants and 980 vacated lease amendments related to the ongoing 1,050 MTN Nigeria site churn.

On a reported basis, revenue increased approximately 11% year-on-year, driven by a combination of healthy MNO activity and FX tailwinds. Third quarter '25 segment adjusted EBITDA in Nigeria was $170 million, a 7% increase from a year ago, primarily reflecting the increase in revenue I just mentioned.

Segment adjusted EBITDA margin was down 230 basis points to 63.3%, primarily reflecting an increase in cost of sales and admin expenses reflecting an adjustment associated with the updated agreement with 9mobile as well as increases in the cost of diesel and electricity with costs also enhanced by the appreciation of the naira.

From a macroeconomic perspective in Nigeria, trends remain encouraging. The Naira continued to preshare against the dollar, including post quarter end, and USD liquidity remains available. Inflation ease for the sixth consecutive month to 18%, its lowest level in more than 3 years, and real GDP grew again in the second quarter of 2025, both year-on-year and quarter-on-quarter, and the Central Bank cut interest rates by 50 basis points to 27%.

These are all positive signs that monetary policy is gaining traction, though still more work remains. Nigeria's FX market was a tailwind for our business through the quarter with an average naira to dollar rate of NGN 1,523 although current levels are lower.

Overall, the country continues to make macroeconomic progress and investor confidence appears to be returning. In our Sub-Saharan African segment, revenue increased 13%, while segment adjusted EBITDA decreased just over 1% year-on-year. This revenue growth was driven by new tenants and colocations and partially offset by lower revenues from FX resets.

The year-over-year decline in adjusted EBITDA reflects an increase in cost primarily driven by increases in regulatory fees and that's due to a regulatory fee cost accrual release in the third quarter of 2024 compared to a more normalized cost level in the third quarter of this year.

In our Lat Am segment, towers and tenants grew by 6% and 8.9%, respectively, versus third quarter '24 as we added over 300 colocations and 280 new sites during the year, which helped lead to 11% organic growth year-on-year.

On a reported basis, revenue increased by over 13% year-on-year, driven by the continued tenant growth and lease amendment activity as well. In Brazil, our second largest market with 8,586 towers, macroeconomic conditions were favorable in the third quarter as the Brazilian real appreciated against the U.S. dollar, and the Brazilian Central Bank held rates steady with the benchmark Selic rate at 15%.

Moving to LatAm profitability. Segment adjusted EBITDA increased by almost 22%, while segment adjusted EBITDA margin increased 560 basis points versus the third quarter of 24%, which mostly reflects a reduction in expenses from various cost-saving initiatives.

On Slide 14, our capital structure and related items. At September 30, 2025, we had approximately $3.9 billion of external debt and IFRS 16 lease liabilities and that's broadly stable with last quarter. Of the $3.9 billion, approximately $2.2 billion represents our bond financings. And our weighted average cost of debt remained 8.3% and following the 100 basis point reduction we saw last quarter, stemming from the high interest debt that we paid down in Nigeria and Brazil.

Following the end of the quarter, we closed the Rwanda transaction and therefore, our 3 key balance sheet and consolidated net leverage do not yet reflect the $175 million of initial proceeds that we have received.

Cash and cash equivalents was $651 million as of September 30, bringing our total liquidity to $951 million, of which $300 million is the undrawn group RCF.

In terms of where that cash is held, approximately 18% was held in Naira at our Nigeria business, though we have continued to upstream since the quarter end.

Consequently, our consolidated net debt was less than $3.3 billion at the end of September. Our consolidated net leverage ratio was 3.3x down 0.1x since the end of June and down 0.6x year-on-year. We expect leverage to be at the low end of our target 3 to 4x net leverage ratio by the end of the year with our position now supplemented by the cash proceeds that we received from the Rwanda disposal post quarter end.

And on to Slide 15. And as Sam mentioned at the beginning, given the strong performance across our business in the third quarter and our continued positive view on the remainder of the year we're again raising our full year 2025 guidance.

We now expect revenue in the range of $1.72 billion to $1.75 billion, and that's a $20 million uplift from our previous guidance. We expect adjusted EBITDA in the range of $995 million to $1.015 billion. That's a $10 million uplift.

We expect ALFCF in the range of $400 million to $420 million, and that's a $10 million uplift as well. While total CapEx remains unchanged in the range of $240 million to $270 million, including an assumption of 600 new sites.

Our consolidated net leverage ratio target of 3 to 4x still remains unchanged as of now. Our guidance continues to show solid revenue growth in 2025 versus 2024, especially when excluding the impact of our disposals as well as very strong growth in adjusted EBITDA and ALFCF.

Our year-to-date performance has been ahead of expectations driven by strong operating and financial performance. and new guidance factors in strong constant currency growth assumptions and now reflects a more favorable FX environment.

The new guidance implies an organic revenue growth rate of 10% at the midpoint. The stronger FX assumptions, I'll outline shortly, provide translation tailwinds that support our reported numbers. However, this benefited partly offset by a lower contribution from FX resets, which is reflected within organic revenue.

We are also now assuming a lower benefit from power indexation, driven by lower diesel prices. Although as a reminder, given our power prices will also fall, these movements will have limited impact on our adjusted EBITDA and ALFCF.

Our guidance is inclusive of the contribution from the company's Rwanda operations up until the completion of its disposal on October 9, 2025.

Moving to FX. The bottom of the slide shows the average annual FX rate assumptions used in our 2025 guidance. For the full year, we're now assuming a rate of “NGN” 1,535 to the U.S. dollar compared to our previous assumption of “NGN” 1,595 to the dollar, and that includes an assumption of “NGN” 1,500 flat for the fourth quarter.

We are also now using stronger FX assumptions to varying degrees for other FX rates on this slide, helping to support our expected 2025 overall financial performance. This now brings us to the end of our formal presentation. We thank you for your time today.

And operator, please now open the line for questions.

[Operator Instructions] Our first question for today comes from Richard Choe of JPMorgan.

I wanted to ask about your carrier customers in Nigeria. Now that they have been able to have a few quarters of the tariff increases and hitting their financials what are there -- or have they communicated to you their kind of CapEx plans for the long-term with the new rates in place.

Richard. So a few points on that. So firstly, what we're seeing from the likes of MTN Nigeria from Airtel Nigeria, and is really strong financial results, as you might expect, having passed through the 50% carrier increase or carrier a tariff increase.

So MTN Nigeria reported a couple of weeks ago, they're 63% up on revenue, EBITDA even more than that and they're at a 53% margin now. Airtel Nigeria are not too far behind, 56% of revenue growth and a 57% margin. So both those carriers really strong, really healthy.

In terms of CapEx, they both spent a reasonable amount over the past few quarters, and particularly around densification, coverage and quality of service. They're starting to say that some of that CapEx has now been spent and it moderated a little bit into Q4, but we've obviously seen quite a tick up in business. We've had a good number of quarters in terms of colocations.

You'll see from our earnings material, we put on another 1,700 lease amendments in Nigeria as well. And you'll remember that we're still pushing through the big Airtel rollout that we agreed 18 months or so ago.

So -- we have seen some of that benefit, and we'll continue to see a bit of that benefit as we exit the year. and some into next year as well.

In terms of the longer-term plans, not at this stage, but obviously, we're pretty familiar with what they're thinking about for next year, given it -- goes to our plans, and we'll obviously cover the impact of that on guidance at our year-end call, but that's -- we're pleased with where we are.

And not trying to look too far ahead, but it seems like the opportunity in Brazil is pretty significant. But I guess also kind of keeping in mind wanting to be mindful of the capital allocation. How much should we expect kind of the firm's willingness to invest in Latin America as the growth driver over the next few years?

Yes. Definitely right to call that out and something that we've obviously put a little bit of spotlight on throughout the pullback on capital allocation over the last couple of years, Brazil, particularly on the tower side, was one area that we really wanted to continue growing. That thesis very much continues.

People will have seen the announcement around our new rollout with TIM. That's 500 sites in the next couple of years, but up to 3,000 sites in totality. So I think that really underpins growth forecast that we've always had with that market. We hope to add some more around that as well.

And Brazil will continue to be an avenue for growth CapEx for us, particularly on the tower side. So we're really positive about that market.

Okay.

Richard, this is Sam. If I may add, we've never frozen the growth in Brazil. And at the moment, despite global headwinds, Brazil's economy remains solid, in GDP is up 2.3%. The real is stronger today at 5.3% to the dollar, and the telecom sector is growing 6% to 7% year-on-year with margins nearing 50%. I mean it's an amazing performance even stronger than what we have here in the United States in terms of growth and margins, with again, currency strengthening against the dollar.

And as the carriers densify 5G networks and grow their coverage, our infrastructure sites sit at the center of that growth. They're benefiting from both volume expansion, higher tenancy efficiency. Again, this is evidenced by what we just announced, the 3,000 tower build with TIM over the next few years. and potentially other rollout projects that could be announced in the future. So we are very excited about Brazil. I mean, we have been and we remain excited about Brazil.

Is going to be a great market longer term.

Our next question comes from Michael Rollins of Citi.

I wanted to follow-up on your comments about maybe updating capital allocation and possible returns to shareholders with the year-end results. Can you give us an update on how you're thinking about dividends versus buybacks versus financial leverage?

And within that context, I don't believe you've shared a number, but where does leverage sit pro forma for the completed transactions that were done early in the fourth quarter, but not included in the end leverage ratios. I may have one other follow-up.

Mike. So I'll take that all together. The last point on pro forma leverage is about 0.1 down, so 0.1 reduction on leverage. And as we've been saying for a quarter or 2 now, we expect our leverage to be 3x to 3.1x by the end of the year. So we're very much on track to deliver that.

That obviously goes into the wider capital allocation question, which we said earlier on the call, we will update fully at the year-end results in terms of what we intend to do. Just to put a little bit more color around that.

So we're really thinking in 3 buckets. We just started on the previous question to talk about some growth CapEx. So we're looking at that as to whether we think there's some really attractive return opportunities across our markets. I would expect us to possibly do a little bit more growth CapEx in the last couple of years, but moderately so.

Keeping in mind our focus continues to be on profitability and cash flow generation. But we are seeing lots of potentially good growth around the business. So potentially moderately -- moderate change to that portion.

Debt, as just said, will be at 3x plus or minus by the end of the year. we think that's a pretty good jump-off point to be thinking about different types of capital allocation. That may include reducing our 3 to 4x target range, but we'll cover that at the year-end.

From a debt perspective, we're pretty focused on some nearer-term dollar maturities. And we've got some bonds due at the end of next year, some bonds due at the end of the following year, and a bilateral USD term loan due 2027 as well. So that's kind of in our thinking around debt.

But we feel pretty good about the balance sheet where it's going to be by the end of the year and then continuing to delever organically, if you like, after that.

And all of that leaves kind of plenty of opportunity, let's say, to think through some direct shareholder returns. And whether that's dividends or share buybacks. So I don't want to go into that at this stage. We'll cover that at the year-end results. But certainly, there's ample room for that, given the cash generation of the business.

And then probably just a final point. To be clear, we are not assessing outbound acquisition opportunities at this point in time. So we won't be buying anything.

That's very helpful. And just one more if I could. For investors that are trying to compare your financial prospects with other tower companies around the world. Can you give us an update on just how to think about the annual financial algorithm in terms of the underlying organic top line that you would expect your business to deliver on average in any given year, and how that can translate into EBITDA and ALFCF per share growth?

Yes. So in each of our quarters, we try to provide something that we think is helpful to focus from a top line perspective, which is our growth bridge. And we show on that -- it's Page 9 in this quarter's investor press. And that gives us a headline growth. It gives you what we call organic growth, and it gives you a constant currency growth as well.

And the reason [indiscernible] Operator, are we lost Mike, can you hear me? Sorry, I think we lost some sound there.

I can.

Sorry, I'm not -- where did we lose you? Sorry, I was on a monologue about our growth bridge. Where did I lose you?

On EBITDA.

Okay. So yes, power obviously doesn't pass through to EBITDA. So we just highlight that and the difference is around that in revenue. So that gives people a lot of different ways that they can look at our revenue.

And then in terms of how that flows down into EBITDA, really the only, I would say, nuances between the revenue growth and EBITDA growth from a mechanism point of view is the power item I just mentioned, which doesn't affect EBITDA because it's 1 for 1. It's a pass-through.

And then obviously, FX, if it affects revenue to some extent, it will affect EBITDA, which is smaller to a smaller extent. But otherwise, people just track our EBITDA margins as a good way to flow through to EBITDA.

And then moving on to ALFCF probably the only other area of difference other than just tracking through is our interest rate profile, which we've spoken about quite a bit this year, it's low interest in Q1 and Q3 and high interest in Q2 and because of the way our bond interest is phased. But other than that, nothing out of the ordinary.

Our next question comes from Gustavo Campos of Jefferies.

Yes, thank you very much for the presentation and congrats on the results. I had -- just a few questions here. If I talk -- if I just do some rough calculations here on the Rwanda sale, if I understood correctly, it's $275 million cash payment, and then you obviously need to make an adjustment on the underlying EBITDA, given, I think, like Rwanda has historically contributed $30 million to $40 million EBITDA on an annual basis. I thought it would be a 0.2x effect on the capital structure pro forma on your net leverage, do you I get to these [indiscernible]?

Yes. So the consideration is coming in over a period. So we've received $175 million in October. And the balance $100 million is due to come in over the next couple of years. So in the pro forma impact I gave you, I'm talking about today's pro forma impact using $175 of proceeds. The balance will come in later and will be additive, and that's the difference between your 0.2 and mine 0.1.

Okay. Understood. Yes. And when are you expecting the additional $100 million?

So it's up to 2 and 3 years away, there's 2 tranches. You'll see it written in all of our disclosure last quarter and this quarter. So 70-odd of it comes in the next 2 years, the balance comes in 3 years. It could come sooner. Those are out to date.

Understood. Understood. I also wanted to clarify here on your guidance review, is it correct to -- is my understanding correct that the guidance was only because of FX basically? Or was there some other factors to be incorporated here? Are you just assuming stronger local effects for the end of the year?

Yes. I mean it's obviously year-to-date performance through Q3, but then yes, for the balance of the year, effectively, it's FX.

Okay. Okay. And also, I just wanted to clarify on your debt reduction strategy. You mentioned that you are focused on the front-end bonds and maybe your dollar term loan, are you planning to call the '26 and the '27 bond? We understand that for example, the '27s are already callable and the '28 are already callable from December 2025, right? So should we be thinking about this callable date? Or should we think about maybe some redemption closer to maturity? Any visibility on your 3 front and bonds would be very helpful here and how we should think about your capital allocation strategy?

Yes. So you're right. Some are callable now. Some are not callable yet. That mix of timing, obviously goes into our thinking in terms of what we end up doing. So I don't want to comment on things we haven't done at this point in time, especially on the bond side of things.

But you're right in your thinking around the different time periods and the different instruments that we are focused on. So you will hear from us on that as soon as it's ready.

Okay. Yes. I was -- final clarification from my side. Could you please give some quick review again on why did your sites in Nigeria dropped by 500 towers quarter-over-quarter. I understand that there was like -- I think you mentioned on the call the MTN site churn. And you also mentioned the 9mobile. I'm just trying to understand how much of an impact those 2 factors had? And should we expect maybe more materialization of this impact in the future? Or that's like the one-off?

Yes. So we said earlier in the call that the MTN churn impact is about $8 million in the quarter versus this time last year. So that gives you an idea of where we're up to with them.

As and when we churn tenants, we will assess whether we think that the sites have a good opportunity for other colocations or other tenants to go on them. So you will see an element of us rationalizing towers if we think that, that's not the case. And that's really what we'll see there. So as we go through the MTN churn and a bit of -- and the 9mobile churn, we will tidy up the tower base as well. That's obviously so that we save the cost and running CapEx of monitoring -- of operating those towers if we haven't got a tower on.

Gustavo, this is -- I mean this MTN churn is part of -- it's a onetime thing part of the renewal of the MLAs that we have done with them last year. I mean, it was announced last year with details in terms of how many sites are they moving from as part of kind of like long-term consolidation for them. So this just happened as we renewed the MLAs by another 8, 9 years, if I remember correctly.

One more thing I do want to add about Nigeria is that Nigeria is also firing on a lot of cylinders at the moment as a country. The current Nigerian administration has done in our opinion, a great job in stabilizing and improving the economic outlook of the country, as they've increased reserves and they strengthen the currency, while reducing [indiscernible] pay for businesses, among other fundamental actions. So we are also upbeat about Nigeria at the moment.

Understood. And thank you very much for the recap here. So you we should basically be done here with like reduction of sites in this quarter. Like this was like kind of like the last quarter where we saw some reduction in sights. Is that correct?

It's part of the number that was agreed with them last year.

Our next question comes from Stella Cridge of Barclays.

And there is just a couple of follow-ups. So actually, you received the render proceeds, the cash balance would be quite high. I was just wondering, going forward, what you reckon would be the kind of cushion that you would like to maintain in terms of how much headroom you've got to actually reduce gross debt with the cash that would be great. And I just want to get a sense in terms of capital structure. Your bonds recently have made up quite a chunk of the overall capital structure, but over 2/3. Is that kind of the right level for you? Or would you like to kind of have a bit more of an equal balance between bonds and bonds. Just great to get some color on that.

So on the cash balance that we really look at the group cash balance as being the key sort of, let me say, cash buffer that we're always monitoring. And there, we like to see it was $150 million to $200 million at any one time at the group level. We're actually materially higher than that at the moment, but that's kind of how we monitor it and otherwise within the businesses themselves, the opcos, we run them based on their own working capital and CapEx requirements. So it's mainly the one at group that we focus on. So that's kind of how we think about things.

And your second question on bonds. To be honest, we like to have term loans and bonds at any one time. There are periods in time as we go through cycles, where the bond markets are open and doing well, there are periods when they're not open and not doing so well. And so we like to keep a balance of both of those types of instruments within our capital structure.

So we have, I think, a good track record and history with our bondholder community, and we also have a really strong pool of banking relationships as well. So we'd like to have both. But in terms of the absolute mix, to be honest, that isn't something that we necessarily think too much about. It's more around what's the denomination of the debt, and I guess, closer to the bond part of the question is how much is fixed or floating.

And as we said before, we want to get our currency nomination back close to our revenue, which is more like 61%, 62% hard currency at this point in time. So we want to get that 85% dollar-denominated debt back close to 6%. And then fixed floating, we're just over 2/3 fixed at the moment and fixed is obviously more preferable providing the rates are good.

Thank you. That brings us to the end of the IHS Holding Limited Third Quarter 2025 earnings results call. Should you have any more questions, please contact the Investor Relations team via the e-mail address, [email protected]. The management team, thank you for your participation today and wish you a good day. You may now disconnect your lines.

Good day, and welcome to the IHS Holding Limited Second Quarter 2025 Earnings Results Call for the 3-month and 6-month periods ending June 30, 2025. Please note that today's conference is being webcast and recorded. [Operator Instructions]

At this time, I'd like to turn the conference over to Robert Berg. Please go ahead, sir.

Thank you, operator. Thanks to everyone for joining the call today. I'm Robert Berg, Head of Investor Relations here at IHS. With me today is Sam Darwish, our Chairman and CEO; and Steve Howden, our CFO.

This morning, we filed our unaudited condensed consolidated interim financial statements for the 3-month and 6-month periods ended June 30, 2025, with the SEC, which can also be found on the Investor Relations section of our website and issued a related earnings release, presentation and supplemental deck. These are the consolidated results of IHS Holding Limited, which is listed on the New York Stock Exchange under the ticker symbol IHS, and which comprises the entirety of the group's operations.

Before we discuss the results, I would like to draw your attention to the disclaimer set out at the beginning of the presentation on Slide 2, which should be read in full, along with the cautionary statement regarding forward-looking statements set out in our earnings release and 6-K filed as well today. In particular, the information to be discussed may contain forward-looking statements.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other important factors that are difficult to predict and that may be beyond our control, including those discussed in the Risk Factors section of our Form 20-F filed with the Securities and Exchange Commission and our other filings with the SEC. As a result, actual results, performance and achievements or industry results may be materially different from any future results, performance or achievements or industry results expressed or implied by these forward-looking statements.

We'll also refer to non-IFRS measures, including adjusted EBITDA that we view as important in assessing the performance of our business ALFCF that we view as important in assessing the liquidity of our business and consolidated net leverage ratio that we view as important in managing the capital resources of our business. A reconciliation of non-IFRS metrics to the nearest IFRS metrics can be found in our earnings presentation, which is available on the Investor Relations section of our website.

And with that, I'd like to turn the call over to Sam Darwish, our Chairman and CEO.

Thanks, Rob. Good morning, everyone, and welcome to our second quarter 2025 earnings results call. I'm pleased to share that we've delivered another quarter of strong results ahead of expectations with strong performance across all our key metrics, revenue, adjusted EBITDA and ALFCF. And we've done it while also spending less total CapEx. This evidences that our strategy is working. We're driving organic growth, efficiency and cash flow.

And the environment is moving in our favor. We're seeing an improving macroeconomic and ForEx backdrop as well as fundamental telecom market performance, especially in Nigeria. With all of that, we are raising our full year 2025 outlook across every single key metric. Steve will take you through the details shortly, but the headline is we're operating better, we're more profitable, and we're strengthening our balance sheet as we had planned.

Let me walk you through the quarter's highlights. Revenue came at $433 million, ahead of plan with 11% organic growth driven by colocation, lease amendments, new sites and CPI escalators. Adjusted EBITDA came at $248.5 million with a margin over 57%, stable year-on-year, showing continued financial discipline. ALFCF came at $54 million as expected, reflecting the rephrased interest payments following our November 2024 bond refinancing.

And total CapEx came at $46 million, down 14% year-on-year, thanks to more disciplined capital allocation. In Q2, we repaid $154 million of high interest debt. That lowered our weighted average cost of debt for the whole company by 100 basis points, and that's tangible progress towards our debt reduction and free cash flow goals.

On net leverage, we ended the quarter at 3.4x, down from 3.9x a year ago, right in the middle of our target range. We expect net leverage to continue to decrease between now and year-end, and that's irrespective of the proceeds from our Rwanda sale signed during the quarter, which we expect to close in the second half and further reduce net leverage.

During the quarter, we also refinanced our $300 million group RCF, which remains undrawn until the third quarter of 2028. Liquidity remains strong, over $830 million even after paying down $154 million of debt. So, looking ahead, our priorities are clear. First, continue prioritizing paying down debt while continuing to grow organically. Second, stay disciplined with capital allocation and as we approach the low end of our leverage range, evaluate the introduction of dividends and/or share buybacks.

Third, unlock further efficiencies by bringing more technology and AI into how we work. Fourth, continue assessing growth opportunities with the highest returns given the high level of demand we are seeing from our customers. And finally, further disposal activity remains under consideration, and we are continuing to assess additional value-creative disposal opportunities.

We see significant potential across our markets. The ongoing rollout of 5G across our biggest markets, the MNO tariff increases in Nigeria and of course, the stable Naira. We believe all of these set the stage for sustained growth and strong returns. We'll keep focusing on building the business, increasing free cash flow and strengthening the balance sheet with discipline, all with a firm eye on driving shareholder value.

And with that, I'll hand it over to Steve.

Thanks, Sam, and hello, everyone.

Let's take a look at Slide 8, where we show our second quarter 2025 performance. Our results came in ahead of expectations with positive operating and financial progress supported by the continued stable macroeconomic environment in Nigeria. As we look at the results, please note the year-over-year comparisons are impacted by some items in 2024.

Firstly, the December 2024 Kuwait disposal, meaning no MENA contribution in 2025. And as a reminder, Kuwait contributed $11 million and $6 million to revenue and adjusted EBITDA, respectively, in the second quarter of 2024. Then secondly, changes in our agreements last year with MTN South Africa relating to the provision of power managed services, which resulted in a one-off reduction of $14.5 million in the second quarter of last year to both revenue and cost of sales, but no impact on adjusted EBITDA.

And then thirdly, the impact of the renewed and extended contracts with MTN Nigeria signed last August 2024, including the near-term associated site churn. So in terms of the results, year-over-year towers increased approximately 1.5% and tenants increased approximately 2% in each case, excluding distorted the impact of the Kuwait disposal, while lease amendments increased by almost 4%.

On a reported basis, in the second quarter, revenue was broadly stable year-on-year, but was up 2% when adjusting for the impact of the Kuwait disposal. Organic growth was more than 11%, which was partially offset by the 9% impact from the movement of foreign exchange rates, including the Nigerian Naira versus the U.S. dollar.

As a reminder, the Naira average FX rate was NGN 1,392 to the dollar in Q2 of 2024 and was NGN 1,581 to the dollar in Q2 of 2025. Hence, our 2Q reported revenue came in flat compared to last year despite those FX headwinds. Although the Naira has depreciated year-over-year, the currency has remained largely stable so far this year and continues to hover in the 1530 to NGN 1550 Naira to the dollar levels post quarter end.

Our adjusted EBITDA performance was also pleasing, increasing 1.5% year-on-year, excluding the impact of the Kuwait disposal. Adjusted EBITDA margin was broadly stable year-over-year and our robust adjusted EBITDA performance despite currency depreciation highlights our continued cost control and resilience of the financial model through contract resets.

Meanwhile, ALFCF decreased by approximately 19% versus 2Q last year. But remember, the comparison is distorted by a very different interest rate profile quarter-to-quarter in 2025 versus 2024. This emanates from the November 2024 bond refinancing. And as a reminder, following that refinancing, our bond interest payments are now primarily due in the second and fourth quarters of the year, whereas in 2024, they were more evenly spread.

Our level of CapEx investment decreased by almost 14% in the quarter, largely driven by the pullback in CapEx as we continue to focus on improving cash generation. Finally, our consolidated net leverage ratio is 3.4x, down 0.5x versus the second quarter of last year. As Sam mentioned, we are well within our target range of 3 to 4x and expect to be at the low end of the range by the end of 2025. All of this is before the sale of our Rwanda business, which we continue to expect to close in the second half of this year.

Slide 9 shows the components of our 2Q '25 revenue on a consolidated basis, where you can see how the business delivered organic growth of more than 11% despite being broadly stable on a reported basis, given the impact of the Kuwait disposal and Naira devaluation.

From a constant currency perspective, revenue grew approximately 10%, driven primarily by CPI escalations, new lease amendments, new colocations and new sites.

Positive signs of the fundamental underlying tenancy growth continuing across our key markets. This strong constant currency revenue growth of 10% was supplemented by the benefits from our FX resets and was partially offset by lower revenues linked to power, given the fall in diesel prices over the period, although this has no impact on adjusted EBITDA or cash flow. The right side of the page shows the organic growth rates of each of our segments for the quarter with our Nigeria segment having grown more than 10% despite the impact of the renewed and extended contracts with MTN Nigeria.

On Slide 10, you can see our consolidated revenue, adjusted EBITDA, adjusted EBITDA margins for 2Q '25, as we've already mentioned. Specifically, 2Q '25, our adjusted EBITDA of $248 million and adjusted EBITDA margin was 57.3%, continuing the trend of higher margins we've seen in recent quarters.

On Slide 11, we show our adjusted levered free cash flow. So, in the second quarter, we generated ALFCF of $54 million, a 19% decrease year-over-year, primarily due to the higher interest payments in the quarter, as I mentioned earlier. Our ALFCF cash conversion rate was 21.7%.

On to CapEx. In the second quarter, CapEx of $46 million decreased 14% year-on-year, continuing recent trends. And that decrease was largely driven by lower CapEx in our LatAm segment, reflecting the continued actions we're taking to improve cash generation and to narrow our focus on capital allocation. Nonetheless, we retain a healthy level of new site builds in Brazil.

On the segment review on Slide 12, I'll start as usual with Nigeria. Revenue in our Nigerian segment was $260 million in the second quarter of 2025. During the quarter, we added over 250 new colocations and lease amendments continue to be an important driver of growth as we integrated over 700 new lease amendments since the end of March with our customers continuing to add additional equipment to our sites.

This helped lead to strong organic growth of over 10% year-on-year despite an approximate $5 million reduction in revenue from the approximate 450 vacated tenants and 850 lease amendments related to the ongoing MTN Nigeria site churn. On a reported basis, the over 10% organic growth was offset by the 14% reduction in noncore revenues related to depreciation of the Naira year-on-year.

As a reminder, at the first quarter results, we caution that given how the Naira was moving period-on-period versus our quarterly contract resets, we anticipated a headwind coming into 2Q '25. However, the Nigerian business has outperformed during 2Q, driving a better-than-expected result. Second quarter '25 segment adjusted EBITDA in Nigeria was $171 million.

And although segment adjusted EBITDA margin was up 190 basis points to 65.5%, and that's primarily reflecting a reduction in cost of sales and administrative expenses largely coming from the Naira devaluation and internal cost-saving initiatives. From a macroeconomic standpoint in Nigeria, we continue to see positive progress. The Naira has continued to stabilize, including post quarter end.

USD liquidity is available, inflation is dropping, real GDP was up in the first quarter of this year year-over-year and interest rates continue to be held flat but are forecast to start dropping with some analysts expecting the first rate cut as soon as September. And while the Monetary Policy Committee is expected to maintain their tight monetary policy strategy in the short to medium term, the government does expect inflation to come down as seen most recently with the June CPI print of 22.2% versus 23% in May and down from over 24% in March. This was a positive development as the government continues to eventually target single-digit inflation.

Crude oil production also continues to improve with July's output increasing to 1.8 million barrels per day, surpassing the 1.5 million barrel per day OPEC quota for the first time in months. Nigeria's FX market remains stable, as we mentioned, through the quarter with an average Naira to the dollar FX rate at 1,581. As I mentioned, current levels are more like NGN 1530 to NGN 1550 Naira to the dollar post quarter end. The country continues to make macroeconomic progress and investor confidence seems to be returning.

On another note, following the recent rebasing of GDP, the numbers now show the size of the Nigerian economy to be approximately $250 billion in 2024, and that's approximately 35% larger than initially estimated under the prior 2010 base. As of the previous quarter, Nigeria's real GDP grew 3.1%, of which telecommunications and information services contributed 8.5%, highlighting the crucial role our sector plays in the Nigerian economy.

Moving on to Sub-Saharan African segment, revenue increased 18%, while segment adjusted EBITDA decreased 4% year-on-year. The revenue growth was driven by new tenants and colocations. But as I said earlier, the comparison is also impacted by the one-off 2Q '24 reduction in both revenue and cost of sales following the changes in power managed service agreements with MTN South Africa. The year-over-year decline in adjusted EBITDA reflects an increase in costs, primarily driven by higher power generation and tower maintenance costs.

In our LatAm segment, towers and tenants grew by 7.3% and 9.7%, respectively, versus the second quarter last year as we added over 400 colocations and 600 BTS during the year. This helped lead to 6% organic growth year-on-year, notwithstanding that we've now written down the remainder of our Oi revenue during the quarter.

In Brazil, our second largest market with 8,525 towers, macroeconomic conditions were changeable in the second quarter as the Brazilian real appreciated against the dollar, albeit the Brazilian Central Bank slightly raised rates by 25 basis points, bringing the benchmark Selic interest rate to 15%.In terms of LatAm profitability, segment adjusted EBITDA increased by 0.5% and segment adjusted EBITDA margin increased 260 basis points versus the second quarter last year, which mostly reflects the reduction in expenses from various cost-saving initiatives.

On Slide 14, our capital structure-related items. And -- at 30 June 2025, we had approximately $3.9 billion of external debt and IFRS 16 lease liabilities, down from $4 billion last quarter. Of the $3.9 billion, approximately $2.2 billion represents our bond financings.

As Sam mentioned, during the second quarter, we've taken further actions to strengthen our balance sheet by repaying certain debt of $154 million equivalent, lowering our current blended group interest cost by 100 basis points from 9.3% to 8.3% and extending some maturities. As discussed last quarter, during April, the outstanding balance of approximately $80 million equivalent on the Nigerian term loan was fully repaid using local Naira cash.

This Naira term loan carried a high interest rate and its repayment is in line with our focus to reduce debt, particularly high interest debt. Then more recently, in June, we also redeemed approximately $273 million equivalent of debentures in Brazil using a combination of a new $200 million term loan and group cash. Also in June, we replaced our existing $300 million group revolving credit facility, which was due to expire in October 2026 with a new $300 million revolving credit facility, which remains undrawn.

This new group RCF facility can be increased up to $400 million and is available until the third quarter of 2028. Notwithstanding the $154 million of debt prepayment in the quarter and the 2Q being a high interest quarter for us, cash and cash equivalents was still $533 million as of the 30th of June, bringing our total liquidity to $833 million, of which $300 million is the new undrawn group RCF.

In terms of where that cash is held, approximately 32% was held in Naira at our Nigerian business at the end of the quarter, although we've continued to upstream from there since the end of the quarter. So consequently, our consolidated net debt was $3.3 billion at the end of June.

Our consolidated net leverage ratio was 3.4x, which was broadly stable since the end of March and came down 0.5% year-on-year. We expect leverage to be at the low end of our target 3x to 4x leverage range by the end of 2025, and this will be supplemented by the cash proceeds that we expect from the Rwanda disposal once it closes.

So, moving on to Slide 15. And as Sam mentioned, given the strong performance across our business in the second quarter and our positive view on the remainder of the year, we're raising our full year 2025 guidance. We're expecting increased revenues driven by a stronger operating performance and positive FX movements and improved profitability and ALFCF cash conversion driven by our continued financial discipline.

To be clear, we would be moving guidance up by more, but in this guidance revision, we're also backing out the Rwanda business contribution on the assumption that disposal completes soon. So, we now expect revenue in the range of $1.7 billion to $1.73 billion. That's a $20 million uplift from our previous guidance. Adjusted EBITDA in the range of $985 million to $1.005 billion, that's a $25 million uplift. And ALFCF in the range of $390 million to $410 million, that's a $40 million uplift. And total CapEx now in the range of $240 million to $270 million, and that's a $20 million reduction from our previous outlook.

Our consolidated net leverage ratio target of 3 to 4x remains unchanged as of now. As a reminder, our guidance shows solid growth in 2025 versus 2024 in our revenues when excluding the impact of our disposals and strong growth in adjusted EBITDA and ALFCF. So, there's a few points I'd like to make here on the guidance upgrades.

So, number one, revenue is impacted by power indexation movements up and down, which do not flow into adjusted EBITDA nor ALFCF. And we are seeing lower power prices for the remainder of the year, which reduces power index revenue but doesn't impact adjusted EBITDA nor ALFCF.

Secondly, given how much we're increasing adjusted EBITDA relative to revenue and increasing ALFCF relative to adjusted EBITDA, you can see the impact of initiatives around profitability, balance sheet and cash flow generation positively impacting our metrics. As mentioned, our guidance raise is now inclusive of an estimated contribution reduction related to our Rwanda disposal, which we continue to expect to close soon in H2.

And to put some numbers to that, our new guidance includes an estimated reduction to 2025 revenue, EBITDA and ALFCF of $20 million, $12 million and $7 million, respectively. And then finally, our guidance implies an organic growth rate on revenue of 11% at the midpoint.

Our new organic growth expectations reflect increased constant currency growth assumptions driven by a better operating and financial performance, but the offset to this is a lower contribution from our FX resets. We're also now assuming a lower benefit from power indexation driven by lower diesel prices.

Then moving to FX and the bottom of the slide shows the average annual FX rate assumption used in our 2025 guidance. For the year, we're now assuming a rate of NGN 1,595 to the U.S. dollar compared to our previous assumption of NGN 1,640. This includes devaluation through the year to 1,730 in December 2025. We are also now assuming stronger FX assumptions to varying degrees for other FX rates on the slide, helping to support our expected 2025 overall financial performance.

So this now brings us to the end of our formal presentation. We thank you for your time today. And operator, please now open the line for questions.

[Operator Instructions] Our first question for today comes from Richard Choe of JPMorgan.

I wanted to ask about the new lease amendments. It was a lot stronger this quarter than it was last quarter, and colocation remains strong. So, can you just give a sense on what is driving it and what it should look like for the rest of the year?

Richard, it's Steve. Yes, so colocations were pretty similar to last quarter, 467 new [indiscernible] in the quarter, which was pretty much in line with Q1, and we see a continuation of that through the rest of the year. Lease amendments to your question, I would say pretty normal activity in this quarter. It was a bit lower last quarter actually in Q1. So that's probably skewed the comp a little bit.

But where it's coming from, Nigeria and Brazil, primarily, and we expect to see that continue through the back end of this year. We're seeing good leasing activity in Nigeria, Brazil, even in other parts of SSA market as well. So, as we sit here today in August, we're on for a pretty strong year at this point in time.

And while you lowered CapEx guidance, you're still implying a pretty big ramp in the second half from what has been spent so far this year. Can you kind of walk through like where the ramp is coming from and what are the chances that might even come under guidance even though you already reduced it?

Yes. We've said for a quarter or so now that the CapEx guide is H2 loaded, and that's based on when our rollout projects will come to fruition. That's a lot of it is in Brazil. There's a little bit of it sat around Sub-Saharan Africa as well. So, we're pretty confident in terms of the new lower guidance range. Obviously, a little bit of that CapEx is impacted by FX moderating as well. But we're pretty comfortable with that now, should be good for the rest of the year. But obviously, we'll update people again if anything has changed by the Q3 results.

Our next question comes from Jim Schneider of Goldman Sachs.

I was wondering if you could just help us think about the impact of a few moving pieces on your organic growth heading into 2026 as we think about the modeling on the forward. Your organic growth guidance is now 11%.

Maybe talk about how you're expecting the impact of CPI and FX resets to trend as we head into next year. And if I sort of back away those things, it seems like your underlying growth organic is about 6.5%. What are some other factors that could be some positive offsets to that, whether it be in terms of lease amendments, colocations or otherwise?

Jim, Well, as you know, we're a little bit early in the year for 2026 guidance, but I'll give you some points in terms of what we can. If we talk about 2025 to begin with because I think it will give you a good indicator of what we're looking at for next year as well.

As I just mentioned in terms of Richard's question, we are expecting continued strength in colocations and in lease amendments. If we're looking now for '25 at places like Nigeria, we're expecting higher colocation numbers than last year. In Brazil, we're expecting higher colocation numbers than last year.

Lease amendments, we're expecting higher lease amendments in Brazil than last year. So, we're really kind of positive about the back end of this year. And then we see that continuing into next year. If we look around our markets, Nigeria and Brazil are kind of two of the biggest bellwethers at this point in time.

And we see a pretty positive carrier environment in both of those markets. Nigeria -- we obviously had the tariff increases for the carriers earlier this year, and we've seen that translate into really positive results for the carriers. The carriers are under pressure on quality of service as well.

So, the businesses are performing well and strong and they're being pushed on quality of service, which ultimately means potential infrastructure for us. And we're continuing to see rollout. So, we've talked publicly about our rollout with Airtel in Nigeria over the last 18 months or so. That continues at pace. So that's really pleasing.

And if we switch sides of the Atlantic over to Brazil, we continue to see a really active pipeline, new build sites, yes, but also colocations and lease amendments as well. Our approximate 500 bps for the year across the entire group, 80% of that is coming from Brazil, and we might even slightly beat that given where the pipeline is coming.

And that's really going to extend into 2026. We see a lot more opportunity there, notwithstanding the fact that the carrier environment is now down to three post all the Oi cleanups, and we're seeing positive momentum there as well.

And so, your question on CPI and the shape of that, we expect CPI and FX resets, obviously, to be more moderate next year. And so hopefully, we'll be seeing a slightly bigger benefit of colocation lease amendments. And BTS, that's really a capital allocation discussion, which we'll be getting into as we get into the back half of the year.

That's helpful. And then maybe just as a follow-up. In terms of capital allocation, I mean, you talked about the fact, Sam, that you're considering additional asset sales, but you're already going to be at the low end of your leverage range, not even -- notwithstanding the Rwanda sale.

So, I'm just trying to understand from here, what would be the rationale for doing more asset sales? Is it -- would it be something that's purely opportunistic based on price? Or are you considering actions that you might actually deconsolidate some of your smaller scale operations and potentially acquire others to give you bigger scale where you already have a lot of it?

I'll start on that one, Jim and Sam can chip in as well. I think specifically as it relates to the disposals that we've done and what we're still considering looking at. So, we said originally, we would sell $500 million to $1 billion worth of assets. We've also spoken about wanting to get the balance sheet down to around 3x leverage and that sort of territory.

So, we are still thinking through whether to do some more disposals. We're looking at a few bits and pieces. But really, it comes down to value. If we think it's going to drive shareholder value, then we will absolutely do that. And what would we do with that capital? Again, capital allocation discussion.

We're really thinking through in the second half of this year, what we do in terms of potential direct shareholder remuneration. So more on that potentially later in the year. But again, if it's going to generate good value versus where we're trading, then we'll keep looking at it.

Sam, do you want to add anything else you want to add on that?

Jim, the short answer is that we are not discounting further asset disposals. I mean, at the end of the day, the strategic plan has at its core to basically find ways to return capital or return value to shareholders. And we believe at some point in time, if given where our multiples are at the moment, our group multiples, if we find -- if assets of offers are being made for assets that basically are accretive, then why not?

I mean we'll have to be mindful of -- at the end of the day, we are a growth company, and we continue to grow. So, we want to also be able to preserve that. But the short answer is yes, as we consider ways to return that capital, whether it's through dividends or buybacks as we kind of like continue to approach our target comfort zone on net leverage.

Our next question comes from Michael Rollins of Citi.

A couple of questions to follow up. So first, on the guide for 2025. So, you referenced that the constant currency organic growth is now better in the guide for '25 than it was previously. Can you give a little bit more detail of how that specifically evolved within the guidance and where the relative strength is coming from?

And then the second question is just a follow-up on the capital allocation discussion. As you've contemplated what the right leverage is for the business, can you discuss the factors that got you comfortable that 3x or roughly that 3x net debt-to-EBITDA level is the right place to then get to that fork in the road where you're going to decide what to do with capital allocation from there and whether you contemplated sustaining higher or significantly lower leverage as part of those considerations?

Mike. So, on your first question on the guidance, so where are some of those organic elements coming from, so i.e., outside of FX. Really, that's around, from a revenue standpoint, leasing activity, particularly in Nigeria, a little bit in Brazil, but also a little bit in Sub-Saharan Africa.

So, we're seeing positive leasing activity coming through revenue performance in those places. We're also seeing more benefit come through in EBITDA because of a variety of cost-saving initiatives that we've had running. So, this is now away from sort of organic growth rates, which are on revenue, but into the wider guidance. We're seeing a variety of cost benefits coming through.

Those will be recurring going forward. There's nothing one-off in there. That's a recurring benefit that we're going to see through the back end of this year and into next year. And then as we go even further down the cash flow statement, if you like, into ALFCF, on top of those revenue upsides, on top of those cost saving upsides, we're also seeing particularly interest upsides in terms of some of the things that we've been doing on the balance sheet, i.e., paying down debt, particularly paying down high interest debt.

We're also generating more cash, which means we can generate more interest income. And so, all of that is adding to the overall picture of the guidance. That's why you're seeing EBITDA go up by more than revenue and ALFCF go up by more than EBITDA.

So hopefully, that explains a little bit about that. And just to make sure we're clear, I said it earlier in the prepared remarks, but the guidance raise would have been higher, but we're also backing out the contribution from Rwanda for the balance of the year. So just to make sure that everybody is clear on that.

And then why 3x there or thereabouts the right level? Look, I think as we've spent a lot of time assessing our capital structure in the last 18 months post significant Naira devaluation in particular, 3x there or thereabouts is a level that we feel pretty comfortable operating in. The business can certainly go up to somewhere like 4x if we were in kind of acquisitional mode. But we're not there at this point in time. That's not what we're doing.

And so, running the business steady state, we feel like 3x is a pretty good leverage level, risk-adjusted for the markets in which we operate. We all know TowerCos can sustain more leverage than that. But for our markets, 3x feels the right level, not too much, not too little to be ineffective use of capital. What I would say is within that 3x leverage mix, we want to make sure that we are paying the most optimized level of interest expense on that. And that's part of what we're doing at the moment.

As we all know, we've been looking at a lot of things on the balance sheet maturities, currency mix, interest rates as well as absolute amount and therefore, leverage. So, lots of different things going into that. 3x feels pretty comfortable for this business in the formation we're in now.

Our next question comes from Gustavo Campos of Jefferies.

Congratulations on the results. Yes, 2 quick questions for me. The first is whether you have a total debt target for -- towards the end of the year? And secondly, whether you -- I see that your EBITDA contribution is roughly like 65% Nigeria and 35% coming from other geographies? And how do you expect this EBITDA mix from a geographic perspective to change over the medium term? If you have any high-level thoughts around that, that would be much appreciated.

Sure. So, on the first one, no, no specific debt target. As we just talked about quite a bit, the target is really around net leverage of the bottom end of our current 3 to 4x range. So, we want to get the business to 3x. We'll hopefully be close to that by the year-end. And then on EBITDA -- I mean, a lot of the EBITDA contribution statistics will be dependent on any more disposals, obviously, whether those are inside of that perimeter or outside that perimeter being Nigeria.

So we've said historically, we wanted Nigeria to be sub-50% of the business in terms of the contribution. That was before the latest kind of strategic initiatives that we've been executing for the last 18 months or so. So, we don't have a set target at this point in time. We're really just making sure that we execute on profitability, cash flow and balance sheet et cetera, so that we deliver share price value. And we'll be relooking at all of those things as we get into the back end of this year.

Our next question comes from David Lopez of New Street Research.

A couple of quick ones on Nigeria and one on the interest cost. So, in Nigeria, Nine Mobile has reached a roaming agreement with MTN. I was wondering if there is any impact to IHS. I believe it's not going to be big, but yes, is there any impact? And is that included in guidance? Just double checking. And still on Nigeria, could you comment about the upstreaming you have done in H1?

And then the last one on interest cost, just a follow-up. So, you've continued to repay the expensive debt this quarter, as you have mentioned. I was wondering if you are targeting more expensive debt and what is the outlook for finance cost for this year and next year, please?

Okay. Hopefully, I got all those down. You might have to remind me the last one on interest costs, right? So on mobile, yes, you're right, they've reached roaming agreement. The benefit to us is immaterial, very material. Everything is included in guidance. So there won't be any negative impact on that going forward.

Upstreaming, yes, we've continued to upstream from Nigeria. We've continued at pace. We've now done $158 million through the half year. We've done more since the end of Q2. So that market continues to be freely available and accessible in the quantities that we need, which is good news.

And then interest rates, the strategy. So the debt that we repaid, we paid $154 million of net debt, if you like. And the reason we say net debt is because we repaid $273 million equivalent of Brazilian debt with $200 million of new debt and $73 million of cash. So net $73 million repayment of Brazilian debt and roughly $80 million equivalent of Nigerian debt repayment.

Those were our two most expensive facilities in the group. They were both local currency, and we have repaid that. That is the reason why our blended average cost of debt has dropped from 9.3% to 8.3% with that activity. What are we focusing on now? We're now focusing on particularly U.S. dollar debt and whether that's either repaying it through excess cash or potentially refinancing elements of it.

And we're also looking at some of the local currency markets where we can access cheaper local currency debt to potentially refi some of the dollar debt, which is held at the top. So that's the next phase of the balance sheet activity. That's all in line with what we've been saying for the last 18 months, going step by step by step.

So that's all on track as we thought it was going to be. I don't want to give you forecast interest rates for the balance of this year and next year because we're obviously looking to optimize where we can and take advantage of best possible interest rates, but I don't know what those will be yet.

Thank you. That brings us to the end of the IHS Holding Limited Second Quarter 2025 Earnings Results Call. Should you have any more questions, please contact the Investor Relations team via the e-mail address, [email protected]. The management team, thank you for your participation today, and wish you a good day.