The economic landscape takes a twist as IHS Towers, the world’s fifth-largest independent TowerCo, reveals a $31 million hit caused by the naira’s devaluation in June. While revising expected revenues for the year downwards, the TowerCo stands firm on its spending plans.
Despite a remarkable four quarters of consecutive revenue growth, IHS Towers faced a 9.4% revenue decline in Q2 2023, compared to the previous quarter. The plummeting figures, resulting in a $46 million deficit, were attributed to the naira’s devaluation. Sam Darwish, IHS Chairman and CEO, expressed that the company’s revenue outlook would have surged by $31 million if not for the altered average FX rates.
The naira’s recent devaluation, prompted by policy changes in Nigeria, has significant ramifications. As the country embraces economic transformation, IHS Towers acknowledges the short-term turbulence brought about by the devaluation of the Nigerian Naira in mid-June.
With Nigeria constituting 67% of its Q2 2023 revenue, IHS Towers feels the impact intensely. As the largest market for the TowerCo, Nigeria plays a pivotal role in its operations across 10 other countries, including Brazil, South Africa, Zambia, Egypt, and Kuwait.
While the naira’s devaluation poses challenges, it also presents opportunities. IHS Towers experienced a reduction in debt by $155 million due to the devaluation. However, this positive was countered by a $19 million reduction in the company’s cash balance.
IHS Towers’ quarterly review and reset of exchange rates will provide a clearer understanding of the naira’s trajectory by year-end, shedding light on the potential effects and adjustments moving forward.
Opinion: Navigating Economic Waves in Tower Industry IHS Towers’ rollercoaster ride due to the naira’s devaluation showcases the delicate dance between economic shifts and corporate strategies. As TowerCos adapt to evolving financial landscapes, their ability to weather storms while seizing opportunities becomes paramount. IHS Towers’ resilience and strategic planning offer insights into how TowerCos can navigate turbulent waters and emerge stronger.
(Published by marketnewsng)