IHS Towers cuts H1 Infrastructure spend 16% to save lots of money move

IHS Towers, Africa’s largest infrastructure firm, sharply diminished its infrastructure spending within the first half of 2025, shifting from an aggressive progress posture to a extra measured, cash-flow-driven technique. The transfer comes amid vital portfolio adjustments, main asset disposals, and a deliberate deal with core markets, together with Nigeria, South Africa, and Brazil.

IHS spent roughly $89.9 million on new tower initiatives in H1 2025, down from $106.8 million in the identical interval final 12 months, representing a decline of roughly 15.8%. The drop was felt in each quarters: Q1 capital expenditure, or capex, fell 17.8% year-on-year to $43.6 million, whereas Q2 dropped 13.8% to $46.3 million.

The steepest reductions got here from Latin America, the place funding in new websites and fibre rollouts was scaled again. Nigeria, IHS’s largest market, additionally noticed a notable slowdown—5.5% decrease spending in Q1 and 10.4% decrease in Q2—reflecting diminished upkeep, fibre deployment, and website upgrades.

A part of the decrease spend stems from the corporate’s strategic asset gross sales, such because the December 2024 disposal of 1,672 towers in Kuwait, which diminished the variety of markets needing contemporary funding. In Could 2025, IHS additionally introduced the deliberate sale of 1,465 towers in Rwanda, anticipated to shut within the second half of the 12 months.

Pivot to capital self-discipline

The capex pullback marks a broader shift for IHS Towers from speedy growth towards consolidation, operational effectivity, and stability sheet power. Proceeds from asset disposals have been directed towards paying down high-interest debt, slicing internet leverage from 3.7x on the finish of 2024 to three.4x in Q1 2025.

The corporate has additionally lowered its full-year 2025 capex steerage to between $240 million and $270 million, signalling that the corporate is prioritising margin enchancment and monetary resilience over market share positive aspects at any price. Effectivity programmes—similar to Nigeria’s “Challenge Inexperienced”—have diminished the necessity for upgrades by optimising present infrastructure.

“Our improved outlook displays what we imagine are the advantages of the stable business progress we now have made in addition to our robust deal with monetary self-discipline, which is delivering sustained enhancements in our profitability and money move technology,” mentioned Sam Darwish, CEO of IHS Towers. 

Portfolio streamlining

As of March 31, 2025, IHS operated 39,212 towers worldwide, down from 40,278 a 12 months earlier—a 2.6% decline. By the tip of Q2, the determine was 39,184, with disposals reasonably than attrition accounting for many of the fall.

The technique is obvious: exit smaller or lower-yield markets, cut back operational complexity, and deal with areas with long-term tenancy contracts and better colocation potential. Nigeria stays on the centre of this plan regardless of current tenant losses, whereas South Africa and Brazil are seen as robust progress corridors.

Tenant churn in Nigeria

The largest problem in H1 got here from tenant churn in Nigeria, pushed by contract adjustments with MTN Nigeria, IHS’s largest buyer. In late 2024, each events renewed most of their grasp lease agreements till 2032. Nonetheless, about 1,050 MTN tenancies weren’t prolonged, with MTN awarding these websites to American Tower Company following a aggressive bidding course of.

In Q1 2025, Nigeria’s tenant depend dropped by 420 year-on-year, with new colocations and websites outweighed by churn. By Q2, the online decline had widened to 688 tenants year-on-year, nonetheless largely linked to the MTN shift.

Regardless of this, IHS maintained a Nigerian colocation charge (the worth an information middle costs to host servers or different IT gear in its facility) of 1.52x, matching the typical for rising markets globally and indicating a wholesome stage of infrastructure sharing.

MTN’s strategic shift

MTN’s resolution to diversify infrastructure companions displays its push to modernise networks, minimize prices, and unfold operational dangers. Contracts with IHS and ATC embrace pricing linked to inflation and diesel prices, with a mixture of naira and greenback parts to handle publicity to foreign money volatility.

The churn has been a setback for IHS, however the firm’s retention of the majority of MTN’s enterprise—and its potential to fill websites with different tenants—has helped cushion the impression.

Robust monetary efficiency

Regardless of decrease spending and a diminished asset base, IHS posted resilient leads to H1 2025. Q1 income rose 5.2% year-on-year to $439.6 million, with natural progress hitting 25.6%. Q2 income got here in at $433.3 million, down 0.5% however forward of market expectations.

For the half-year, income totalled about $872.9 million. Adjusted EBITDA reached $252.6 million in Q1 and $248.5 million in Q2, whereas internet earnings improved to $30.7 million and $32.3 million, respectively, in comparison with final 12 months’s loss. The outcomes spotlight the corporate’s potential to generate robust money flows even in a leaner funding cycle. Administration credit disciplined price management, focused reinvestment, and environment friendly contract administration for the efficiency.

Outlook

IHS has reaffirmed its full-year income steerage, indicating confidence that the heaviest impression from MTN’s churn is now behind it. With a leaner portfolio, decrease debt, and a sharper deal with its most worthwhile markets, the corporate believes it’s higher positioned to climate macroeconomic volatility, foreign money headwinds, and aggressive pressures.

The second half of 2025 will take a look at whether or not IHS can maintain this stability between capital self-discipline and progress, however H1suggests that the corporate’s pivot towards effectivity and monetary resilience is already paying dividends.

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