IHS Towers, Africa's largest independent telecommunications tower infrastructure company, reported an 8.2% increase in revenue for the first half of 2026, though escalating diesel and power costs combined with expenses tied to its proposed acquisition by MTN Group squeezed profitability.

Revenue from continuing operations climbed 8.2% to $844 million in the six months through June, up from $780.3 million in the same period a year earlier. Second-quarter revenue grew 10.4% to $428.6 million, according to the company's H1 financial report.

Operating income fell 38.4% year-on-year, while net income for the first half rose 10.3% compared with H1 2025. However, IHS posted a $7.5 million net loss in the second quarter alone.

A significant factor behind the profitability decline was the surging cost of powering its towers. Diesel prices in Nigeria rose sharply during the first half of the year, climbing from an average of ₦1,361.57 ($0.999) per litre in January to ₦3,277.47 ($2.41) in May in some regions of the country. Nigeria, IHS's largest market, has faced elevated fuel costs since the government removed its long-standing petrol subsidy in mid-2023, and persistent grid instability continues to force tower operators to rely heavily on diesel generators to maintain uptime.

The increase in diesel prices flowed directly into IHS's power costs. The company spent $205.4 million on power generation — primarily diesel — during the first half, up from $165.4 million a year earlier. IHS attributed the rise partly to higher global energy prices and geopolitical tensions. Tower companies typically seek to recover energy cost increases from tenant operators through contractual pass-through and escalation clauses, though such mechanisms often lag behind rapid cost movements.

"We incur capital expenditure in relation to the maintenance of our towers and fiber equipment, which is non-discretionary in nature and required for us to optimally run our portfolio and to perform in line with our service level agreements with customers," the company stated in its report.

Merger-related expenses compounded the financial pressure. IHS recorded $83.1 million in accelerated share-based payment and long-term employee incentive costs during the first half, linked to the proposed MTN acquisition and the company's ongoing asset divestitures.

Despite these headwinds, adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) — a measure of the company's underlying operating performance — rose 2.6% to $514 million. IHS also benefited from a stronger Nigerian naira when converting its Nigerian operations into dollars. The currency movement contributed $40.7 million to second-quarter revenue and $22.6 million to adjusted EBITDA compared with the same period last year.

Underlying revenue growth, however, was more subdued. Organic revenue declined 0.6% in the first half, as gains from new tenants, new sites, and lease amendments were offset by lower foreign exchange-related revenue and site losses. IHS disclosed that approximately 1,050 sites were vacated following the renewal of its contract with MTN Nigeria.

IHS is reshaping its business portfolio ahead of the MTN takeover. Shareholders approved MTN's proposed $8.50-per-share cash acquisition in August. The transaction remains subject to outstanding regulatory and closing conditions. MTN Group, Africa's largest mobile network operator, is already a major tenant of IHS towers across multiple markets, and the proposed deal would bring a significant chunk of that infrastructure relationship in-house.

"The proposed acquisition of IHS Towers by MTN, an important step in the Group's evolution, was recently approved by our shareholders and remains on track to close in 2026, subject to the remaining closing conditions," said Sam Darwish, IHS Towers Chairman and Chief Executive Officer.

As part of its portfolio restructuring, IHS sold its 51% stake in Brazilian fibre company I-Systems to TIM S.A., a Brazilian telecommunications provider, for $183 million in gross cash in May. In August, the company completed the sale of its Brazilian and Colombian tower operations — comprising approximately 9,000 sites — to Macquarie Asset Management for an enterprise value of roughly $952 million.

These transactions mark IHS's complete exit from Latin America, leaving the company concentrated on its African operations. The sharper geographic focus aligns IHS's remaining footprint more closely with MTN's core markets across the continent. As of June 30, IHS operated 37,672 towers across seven countries, a decrease of 1,512 towers from a year earlier, primarily attributable to the divestment of its Rwanda operations.

IHS ended June with $1.5 billion in total liquidity, comprising $1.09 billion in cash and $407.1 million in undrawn credit facilities. Total borrowings stood at $3.11 billion.