Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| As Sam mentioned, we're pleased to share our FY 2023 and fourth quarter 2023 results were in line or better than expected against a challenging macro backdrop in Nigeria throughout the year |
| The value and long-term growth prospects of the Latin America business are also very strong |
| Our results reflect the continued strong secular trends we are seeing across our business, including growth in lease amendments, new tenants, new sites, or build-to-suit and targeted fiber roll-out |
| So that's another upside to the business |
| And lease amendments continue to be a strong driver of growth, increasing 12.5% year-on-year as our customers added additional equipment to our sites, particularly 5G upgrades |
| While the naira devaluation drove the decline, organic revenue growth of 48% reflects the contribution from our FX resets and CPI escalators, as well as the strong secular growth trends of the business |
| These strong growth trends should continue in 2024 as evidenced by our recently announced deal with Airtel in Nigeria that extended Airtel's contract to 2031 and included a commitment to add 3,950 new tenancies over the next five years, much of it front-loaded to 2024 and 2025 |
| These strong fundamental trends are occurring against a challenging backdrop |
| Despite the currency headwinds in Nigeria, we believe in the underlying strength of our business and believe our equity is undervalued, given Africa's perceived place in the global markets |
| The fiber business grew at 30% last year from a renewable perspective and the towers just a little bit less than that, but still growing strong |
| The business, as you've seen, is reporting solid numbers and it's been reporting solid numbers quarter after quarter |
| We're reporting a strong quarter of performance across our key metrics with revenue, adjusted EBITDA, and ALFCF in line or ahead of our expectations, despite the meaningful Nigerian currency devaluation that began in June, while CapEx was meaningfully below expectations |
| Segment adjusted EBITDA grew by nearly 80%, mainly as a result of the revenue growth and a decrease in cost of sales |
| Our improved 2023 ROIC reflects, amongst other things, growth in cash flow, a first full year contribution from the MTN South Africa and GTS SP5 acquisitions completed in 2022, the first year in numerous years when we have not deployed capital on M&A transactions and, of course, the impact of the naira devaluation |
| We are very excited about the potential of this mutually beneficial partnership |
| For the full year, our revenue grew by 8%, adjusted EBITDA by 10% and ALFCF by 19% all on a reported basis |
| So we're again sitting at a point where we hope there's a positive outlook, certainly in terms of US dollar liquidity, but let's see |
| The business has shown its resilience in FY 2023, posting good results, but it's clearly not immune to such significant FX headwinds as we've seen in 2023 and continue to see in Nigeria in the early part of 2024 |
| So, it is our duty, in addition to running the business well in a good and solid manner, it is our duty to leave no stone unturned basically to try and unlock value for shareholders |
| As you can imagine, we are pleased to have completed these initiatives which further de-risk the balance sheet and increased our financial flexibility |
| In Brazil, our second largest market, with 7,663 towers, macro conditions were largely positive as FX rates marginally strengthened, interest rates came down, and inflation stayed relatively flat |
| Segment adjusted EBITDA increased by 31%, leading to a 75.6% segment-adjusted EBITDA margin, a 400 basis point increase versus Q4 2022 |
| For full year 2023, we delivered over $2.1 billion of revenue, an 8% increase, while organic revenue increased by almost 37% |
| Groupwide, we added 1,041 colocations and 4,929 lease amendments, and we surpassed our expectations for new sites, having built 1,329 new towers, mostly in Brazil with 812 in the country as we continue to prioritize organically growing our asset base in that market |
| In MENA, towers and tenants grew by 9.2% and 9.7% respectively, while revenue increased by 13%, including 6% organic revenue growth, that driven primarily by new sites and escalations |
| So that is certainly the positive |
| This has helped stabilize the currency over the past few weeks |
| The trend in mobile phone adaptability and usage is irreversible and is showing through our growth and also through the massive growth in the underlying numbers of our key customers in Nigeria despite the forex headwinds |
| For the full year, adjusted EBITDA was $1.1 billion, a 9.9% increase versus the prior year and adjusted EBITDA margin was 53.3%, up 70 basis points from full year 2022 |
| In our LatAm segment, towers and tenants grew by 9.3% and 6.6% respectively versus Q4 2022, revenue increased by 24%, of which organic revenue growth was 17%, driven primarily by an increase in fiber, escalations, and those new sites |
| Statement |
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| For IHS, Q4 2023 revenue in Nigeria of $321 million decreased 10% year-on-year on a reported basis, reflecting the devaluation in the quarter that increased 66% organically |
| In fourth quarter 2023, IHS generated $510 million in reported revenue, a 3.1% decline versus the prior year |
| Segment adjusted EBITDA margin decreased to 50.3% from 56.6% in Q4 2022 as a result of higher power generation costs, permit and fees, and diesel costs |
| On a reported basis, in the quarter, revenue declined and adjusted EBITDA increased modestly, both metrics impacted by the devaluation in the naira in 2023 |
| At the moment, to be honest, the only thing I would say is that everyone has seen from MTN's most recent announcement from our clients numbers in Nigeria that they're under pressure |
| Segment adjusted EBITDA decreased by 6.3%, which primarily reflects an increase in cost of sales, partially offset by the increase in revenue |
| This massive negative movement of the currency, which is roughly 250% negative in almost 14 months, is definitely taking its toll on them |
| For years, we've been operating this infrastructure which has a lot of challenges in terms of logistics, diesel delivery, feed maintenance, given the complex nature of what we operate now |
| 2023 was challenging, no doubt, in terms of sourcing of dollars and therefore upstreaming, although we did we did get $65 million out earlier in the year in 2023 |
| Fourth quarter 2023 reported revenue includes a $25 million FX headwind versus FX rates of last quarter and a $16 million headwind when including all FX assumptions that were assumed in our guidance |
| But, obviously, we have to caution that we want to see it continue for a period of time |
| The strategic evaluation is largely because we feel the frustration of shareholders |
| The negative FX impact was $267 million or 75.3% due to the devaluation |
| The naira continues to devalue at levels that sadly are offsetting much of these strong secular trends |
| And as Sam mentioned, it's expected to be a $535 million year-on-year headwind to revenue after adjusting for the impact of FX resets |
| In the latter part of the year, we started to pull back our capital allocation for growth CapEx in certain markets like Nigeria, which was one of the reasons our FY 2023 total CapEx of $586 million was lower than our $610ml to $650 million CapEx guidance |
| Meanwhile the price of both oil and ICE gas oil have decreased recently |
| From January to December 2023, the naira suffered a 98% unfavorable movement |
| We continue to monitor the macroenvironment in South Africa, particularly the ongoing power load shedding by the national utility, which did moderate versus the previous quarter |
| Our tower and tenant count decreased 3.5% and 0.8% respectively versus Q4 2022, which continued to reflect the planned decommissioning that occurred in Q1 2023 with no impact on revenue |
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