Tower infrastructure company IHS Holdings reported
revenue of $359.4 million from Nigeria in the third quarter ended September
2026, a 34.1 per cent increase from $268 million a year earlier. Nigeria, the
group's biggest market, contributed 73.3 per cent of the group's $490.5 million
quarterly revenue.
According to a corporate filing with the US Securities
and Exchange Commission (SEC) containing the group's Q3 2026 results, adjusted
EBITDA rose 26.8 per cent year-on-year to $215.0 million, giving an adjusted
EBITDA margin of 59.8 per cent. The increase reflected higher revenue, partly
offset by higher cost of sales and administrative expenses.
Fuel costs weigh on operations
Operating costs in Nigeria rose, driven mainly by a
year-on-year increase in power generation costs to $38.8 million. Diesel
currently retails for between ?1,800 and ?1,900 per litre in Nigeria, and
towers run mostly on diesel for much of the day because of unreliable grid
supply. IHS attributed the fuel price increase to higher global power prices,
including the conflict in the Middle East. Telecom operators routinely spend 30
to 40 per cent of their operating budgets on powering base stations, which limits
funds for network upgrades, maintenance and expansion.
For IHS Nigeria, the rising fuel costs were offset by
higher revenue from power pass-through and indexation mechanisms. Other cost
increases came from staff costs ($3.8 million) and tower repair and maintenance
($2.4 million). The naira's appreciation, to an average of ?1,352 per dollar in
Q3 2026 from ?1,523 a year earlier, led to a 15.2 per cent non-core increase to
$40.7 million.
Tower tenants grew by 120 year-on-year, with 497 from
colocation and one from new sites, partly offset by 378 churn. Lease amendments
rose by 5,768 during the quarter.
Group results
The group reported a loss of $8.2 million for the
quarter, against income of $147.4 million in Q3 2025, a 105.6 per cent decline.
IHS attributed this to a $48.2 million increase in cost of sales and $88.4
million in administrative expenses, stemming from accelerated share-based
payments and long-term employee benefit payments linked to the proposed
acquisition by MTN Group. Revenue from continuing operations rose 21.4 per cent
to $490.5 million, excluding $17.6 million from the Latam segment in discontinued
operations, despite a 3.5 per cent inorganic headwind from the sale of the
Rwanda division.
"We delivered a strong third-quarter performance,
with revenue growth and higher Adjusted Levered Free Cash Flow (ALFCF)
underpinned by operational and financial discipline and the strength of our
business model," said Chairman and CEO Sam Darwish. He said the proposed
$2.2 billion acquisition of IHS by MTN continued to advance during the quarter
and is expected to close in 2026, subject to remaining conditions.
In its nine-month 2026 financial statement, MTN said
it is awaiting regional regulatory approvals from the Economic Community of
West African States (ECOWAS) and the Economic and Monetary Community of Central
Africa (CEMAC). The South African Competition Tribunal is also reviewing the
deal's impact on competition.
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