The news:
- IHS Towers, a telecommunications infrastructure provider, which reported a staggering $1.9 billion loss in 2023 — a 304% increase from the previous year’s losses — has laid off over 100 employees.
- The significant financial downturn was driven largely by the devaluation of the Nigerian Naira and subsequent foreign exchange (FX) losses, which crimped its profit.
- The layoffs, believed to have impacted several departments, primarily affected senior staff and the network surveillance team.
TechCabal reports that many affected senior employees have been with IHS Towers for at least a decade and have received substantial severance packages.
The company reportedly clarified that the layoffs were a necessary response to the prevailing challenging economic environment and not a result of underperformance by the affected employees.
Following its deteriorating financial performance, IHS Towers has faced mounting pressure from investors since 2022.
In a June 2023 letter, one shareholder expressed concerns over the company’s unexplained $1.5 billion in cash used for investing activities, as noted in the company’s cash flow statements.
The company, which employs 1,600 people, lost $409 million due to the naira’s devaluation in the fourth quarter of 2023 alone. Consequently, the loss impacted revenue and led to significant FX losses from US dollar loans.
Despite a slight rebound in its share price to $3.56 in August 2024, the company’s market capitalisation has plummeted to $1.3 billion — a stark contrast to its $6 billion in 2021 when its shares traded at $21.
Operating over 40,000 towers across Africa — approximately 25% of the continent’s entire tower infrastructure — IHS Towers is a crucial player in Africa’s digital economy, leasing its infrastructure to major telcos like MTN and Airtel.
However, rising fuel prices, maintenance costs, inflation, and ongoing FX volatility in Nigeria, its biggest market that accounts for more than half its sales and revenue, have severely strained its operations in recent years.
For example, in the first quarter of 2024 alone, IHS Towers claimed it spent $88.8 million on power, its largest operating expense yet.
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At a conference in August, Gimba Mohammed, the Director of Government and External Relations at IHS Towers, said it cost the infrastructure company over ₦14 billion to repair fibre cuts between 2022 and 2023.
