IHS Towers revenue rises 8% as diesel, merger costs squeeze profits

In the sweltering heat of Nigeria's dry season, diesel prices skyrocketed from an average of ₦1,361.57 ($0.999) per litre in January to ₦3,277.47 ($2.41) in May. This meteoric rise in fuel costs had a ripple effect on IHS Towers, Africa's largest independent telecommunications tower infrastructure company. As the company's CEO prepares for the proposed takeover by MTN Group, the increasing diesel prices have put an unrelenting strain on IHS's profitability, making cost control a pressing concern.

IHS Towers' financial report for the first half of 2026 paints a picture of a company grappling with rising costs. Revenue from continuing operations rose 8.2% to $844 million in the six months to June, compared with $780.3 million a year earlier. However, this growth was overshadowed by the 38.4% year-on-year decline in operating income. Net income, on the other hand, rose 10.3% in the first half compared with H1 2025. The discrepancy highlights the impact of diesel costs on IHS's bottom line. Diesel prices fed directly into the company's power costs, leading to a significant increase in expenses. IHS spent $205.4 million on power generation, primarily diesel, in the first half, up from $165.4 million a year earlier.

For companies like IHS Towers, the consequences of rising diesel prices are far-reaching. The strain on profitability can have a direct impact on the employees, customers, and shareholders. As the company navigates the challenges of the proposed takeover by MTN Group, the pressure to control costs will only intensify. IHS has noted that the increase in diesel prices was partly driven by higher global energy prices and geopolitical tensions. This external pressure highlights the vulnerability of companies like IHS Towers to global market fluctuations.

As IHS Towers prepares for its proposed takeover by MTN Group, the company will need to focus on cost control to mitigate the impact of rising diesel prices. Merger-related expenses also added to the pressure, with IHS recording $83.1 million in accelerated share-based payment and long-term employee incentive expenses during the first half. Despite these challenges, IHS has shown resilience, with adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) rising 2.6% to $514 million.

While the rising diesel prices and merger-related expenses have put pressure on IHS's profitability, there are glimmers of hope. The company benefited from the stronger naira when its Nigerian operations were converted into dollars. The currency movement added $40.7 million to second-quarter revenue and $22.6 million to adjusted EBITDA compared with the same period last year. However, underlying revenue growth was weaker, with organic revenue declining 0.6% in the first half.

As IHS Towers navigates the uncertain waters of the proposed takeover by MTN Group, the company will need to prioritize cost control and adapt to the changing market landscape. The rising diesel prices and merger-related expenses are a sobering reminder of the challenges that lie ahead. As a writer who has witnessed the resilience of Nigerian businesses in the face of adversity, I am cautiously optimistic about IHS Towers' ability to navigate these challenges and emerge stronger.