Q3 2023 IHS Holding Ltd Earnings Call

Participants

Colby Alexander Synesael; EVP of Communications; IHS Holding Limited

Sam Darwish; Chairman & Group CEO; IHS Holding Limited

Steve Howden; EVP & Group CFO; IHS Holding Limited

Brett Joseph Feldman; MD; Goldman Sachs Group, Inc., Research Division

Gregory Bradford Williams; Director; TD Cowen, Research Division

Michael Ian Rollins; MD & U.S. Telecoms Analyst; Citigroup Inc., Research Division

Philip A. Cusick; MD and Senior Analyst; JPMorgan Chase & Co, Research Division

Presentation

Operator

Good day, and welcome to the IHS Holding Limited Earnings Results Call for the 3-month period ended September 30, 2023. Please note that today's conference is being webcast and recorded. (Operator Instructions)
At this time, I'd like to turn the conference over to Colby Synesael. Please go ahead, sir.

Colby Alexander Synesael

Thank you, operator. Thanks also to everyone for joining the call today. I'm Colby Synesael, the EVP of Communications here at IHS. With me today are Sam Darwish, our Chairman and CEO; and Steve Howden, our CFO. This morning, we published our unaudited financial statements for the 3-month and 9-month periods ended September 30, 2023, on the Investor Relations section of our website and issued a related earnings release and presentation. These are the consolidated results of IHS Holding Limited, which is listed on the New York Stock Exchange under the ticker symbol IHS, which comprises the entirety of the group's operations.
Before we discuss the results, I would like to draw your attention to the disclaimer set out the beginning of the presentation on Slide 2, which should be read in full, along with the cautionary statement regarding forward-looking statements set out in our earnings release and 6-K filed as well today. In particular, the information to be discussed may contain forward-looking statements, which, by their nature, involve known and unknown risks, uncertainties and other important factors, some of which are beyond our control that are difficult to predict, and other factors which may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking statements, including those discussed in the Risk Factors section of our Form 20-F filed with the Securities and Exchange Commission and our other filings with the SEC.
We'll also refer to non-IFRS measures, including adjusted EBITDA that we view as important to assessing the performance of our business and ALFCF that we view as important in assessing the liquidity of our business. A reconciliation of non-IFRS metrics to the nearest IFRS metrics can be found in our earnings presentation, which is available on the Investor Relations section of our website.
With that, I'd like to turn the call over to our -- to Sam Darwish, our Chairman and CEO.

Sam Darwish

Thanks, Colby, and welcome, everyone, to our third quarter 2023 earnings results call. We are reporting a solid quarter of performance across our KPIs with revenue and adjusted EBITDA in line or ahead of our expectations, notwithstanding the recent current devaluation. While CapEx was meaningfully below, as everyone should know from our prior earnings call, these Q3 results are the first full quarter of results post a significant devaluation in the Nigerian currency, the Naira. As a reminder, the Naira devalued by 59% from 472 in mid-June to 753 at the end of Q2. And in Q3, average 768 versus 431 last year to 78% devaluation that drove a 10.4% reduction in our reported dollar revenue.
The ForEx protection mechanism in our revenue contracts have begun to resell and we will see more evidence of this resetting in our Q4 results. Overall, the business continues to perform well, driven by solid organic growth of 30.6% with contributions across each of our segments that reflects robust secular demand and the quality of our contract structures. The reduction in CapEx reflects an increasingly more balanced approach we are taking to growth and cash generation in light of what remains a challenging macroeconomic environment across the world, but particularly in Nigeria, and we now expect to be towards the low end of our CapEx guidance range for the year.
On a quarter-over-quarter basis, the [Naira] represented a negative $139 million impact to revenue, driven by the devaluation that began in mid-June. Positively, we expect to see a notable sequential setup in revenue in Q4 as we see the full benefit of our contractual ForEx resets kick in. As a reminder, 53% of our revenue is started to hard currency, of which really over USD contracted revenue resets quarterly or sooner, and nearly all of our revenue has an annual contractual escalator of which most occurred in January. Given these expectations, we are maintaining our 2023 guidance for revenue, adjusted EBITDA and CapEx.
I'd also like to point out that we stopped reporting RLFCF or recurring leveraged free cash flow and have replaced it with ALFCF or adjusted levered free cash flow, which better reflects our liquidity position. We maintain the same range for ALFCF that we had for RLFCF, but Steve will outline the slight change in definition between these 2 metrics later on. We expect our heightened focus on cash generation to be even more evident in 2024 as we pursue operational efficiencies through productivity enhancements, cost reductions and slowing of CapEx versus recent years.
In addition, we are constantly reviewing our portfolio of markets and assets, and will continue to focus our capital allocation on what we believe to be high-growth core markets. We believe these initiatives will help enable IHS to sustain a healthy double-digit organic growth while delivering the meaningful cash generation inherent in our business model. We look forward to sharing our 2024 guidance next quarter.
Stepping to Slide 7. I want to discuss some of our key highlights for the quarter. Starting with Nigeria, as I mentioned earlier, the significant devaluation that began in mid-June in addition to access to ForEx remain a challenge. We are, however, encouraged by the appointment of a new governor of the CBN in September and more recently reported efforts to clear approximately $1 billion of the ForEx backlog. These represent positive development, but there is still much more for the government to do. We have not upstream from Nigeria since the $65 million completed in H1 2023, but we will continue to assess opportunities for upstreaming as they arrive in the remainder of 2023.
I would like to remind our audience that we have operated in Nigeria, in particular, for over 22 years. And over that period, we've gone through other outside devaluations, including most recently in 2016. And each time our business continued to grow thereafter, and we have confidence we will do so again this time. For example, the Naira divided from approximately [197 to $1 to 305] in 2016, a devaluation of 55%. Back then, we saw a similar next quarter negative impact to revenue and profitability as we are seeing now. But then we saw revenue and profitability built back over the next few quarters as our ForEx reset and escalation mechanisms kicked in. Leading to the Nigeria business delivering revenue growth of 22% in dollar terms the year after 2017, an indication of how resilient our business was to devaluation as contract resets and escalations kicked in.
Moving on first to Brazil and then to South Africa. In Brazil, we remain focused on our sizable build-to-suit program. And during the quarter, we built 294 towers in LatAm and remain on target to achieve our goal of 750 or more beds for the year. We also refinanced our existing TowerCo term loan via the issuance of local debentures as we continue our focus on raising more debt in local currency to better align our debt profile with our revenue profile. The Brazilian Central Bank again reduced interest rates by 50 basis points in early November, the third consecutive time over the past few months.
Now to South Africa, while we are encouraged by the improvement we have seen in the level of load shedding since last quarter, we continue to evaluate our power Managed Service business with MTN and others. We will update you as appropriate and if necessary.
On stock liquidity, on October 16, we freed up another 180 million shares, and therefore, all of the share that have been subject to lockup under our shareholder agreement are now freely tradable. Albeit, certain holders remain subject to Rule 144 requirements. The expiration of the lockup over the past 18 months appears to have had a positive impact on our trading liquidity, which has more than tripled from 122,000 to over 400,000 shares per day on average. During the third quarter, we also repurchased nearly 950,000 shares and spent $4.8 million as part of our up to $50 million share buyback program that expired in August 2025.
Shifting to our balance sheet. We have over $850 million of available liquidity between cash and undrawn facilities plus various undrawn facilities at the [OpCo] level. This reduction by $100 million from last quarter is because we have reduced the undrawn portion of our 2022 term loan by $100 million to $130 million, but extended the availability period of the undrawn balance from October 2023 to April 2024. Additionally, derisking our capital structure remains a focus of ours, and we have successfully extended the maturity of our $300 million group revolver from March 2025 to October 2026. With net leverage of 3.2x, we are still comfortably within our target range of 3 to 4x. And please remember that we have no meaningful debt maturities until Q4 2025. We feel good about our balance sheet position, but we continue to monitor the market and evaluate ways to further strengthen our position as we have again recently done.
Lastly, regarding shareholder considerations. We continue to engage in constructive dialogue with Wendel and are making progress towards our mutual goals. We also continue to engage with MTN Group to better align on various commercial and governance matters and will provide additional updates at the appropriate time.
With that, I will turn the call over to Steve.

Steve Howden

Thanks, Sam, and hello, everyone. Turning to Slide 9. As Sam mentioned, we're pleased to show our Q3 performance was in line or better than expected, considering the backdrop of the significant currency devaluation in Nigeria, which I'll reference at various points today. As you see here, towers are up almost 1% and tenants up more than 2% in the third quarter '23 versus third quarter of 2022, while lease amendments again increased by double-digit percentages.
On a reported basis, revenue and adjusted EBITDA declined in the quarter, consistent with our prior expectation and guidance that the full impact of the June devaluation would not be reflected in our results until this Q3. Specifically, in Q3, revenue declined by 10.4%, adjusted EBITDA by 15.5%, and ALFCF-fell by 11.2% in each case on a reported basis and driven largely by the impact of the devaluation more than offsetting the continued strong organic activity across our markets.
However, it's worth noting that the period-on-period comparison is a bit distorted by the presence of some one-off revenue and adjusted EBITDA in the third quarter of 2022, and as we noted last quarter, we did see some pull forward of anticipated Q3 '23 revenue into our Q2 results. Our adjusted EBITDA margin decreased by 49.7%. Again, I draw your attention to what Sam said earlier about having seen a similar devaluation in Nigeria in 2016, and the build back of our earnings the following quarters as our contractual protections kicked in.
You also see total CapEx fell by nearly 40% in the quarter, largely due to lower capital expenditure for Nigeria and the SSA segments, partially offset by an increase in LatAm, all of which I'll discuss shortly. As Sam mentioned, we have taken a sharp look on CapEx for the remainder of this year and into next year, focusing on the projects that we believe price the highest returns and are the most strategic. Finally, our consolidated net leverage ratio was 3.2x at the end of Q3, essentially flat with last year and a 0.1x increase versus Q2 2023. Again, this is consistent with the expected increase we flagged last quarter due to devaluation, albeit still within our 3 to 4x range as we had guided.
Turning to our revenue on a consolidated basis. You can see how the devaluation turned a quarter of strong organic growth into a 10.4% reported decline in consolidated revenue for the third quarter. Organic revenue growth of 30.6% was driven primarily by FX resets, CPI escalations and lease amendments. Power-related revenues slightly increased due to increased power pass-through in South Africa. On the right-hand side, you can see the organic growth rates of each of our segments for the quarter with Nigeria delivering 36% organic growth. Inorganic growth for Q3 was less than $1 million, primarily due to the fifth and sixth stages of our Kuwait acquisition.
On Slide 11, you can see our consolidated revenue, adjusted EBITDA and adjusted EBITDA margins for Q3 '23. As we've discussed, the Nigeria devaluation drove a 10% decrease in reported revenue in the third quarter, despite quarterly organic revenue growth of over 30% and again demonstrated the continued strong top line growth trends of the business, led by Nigeria in particular. In Q3, '23, reported revenue now reflects a full quarter's impact from the Nigeria devaluation and includes $139 million headwind versus rates last quarter, albeit with a $2 million tailwind versus the [NGN 775 to $1 FX rates and $3 million] when including all FX assumptions assumed for last quarter in our guidance.
While our quarterly FX resets from the U.S. dollar-denominated portion of our Nigeria contracts did kick in on the 1st of July as expected, we have previously noted that some of these resets are calculated using the average rate of the prior quarter and therefore, wouldn't yet fully make up for the mid-devaluation in these third quarter results but will be reflected in our Q4 results. Furthermore, the comparison is distorted a bit due to the $18 million of one-off revenue and adjusted EBITDA in the third quarter of 2022. In Q3 '23, adjusted EBITDA are of $232 million decreased 15.5% and adjusted EBITDA margin was 49.7%, down from the prior year. The year-over-year changes in adjusted EBITDA and margin for the third quarter primarily reflect the decrease in reported revenue I've already discussed and the absence of the one-off items alongside an increase in administrative expenses.
Power generation cost of sales decreased by almost $24 million, driven by a $35 million diesel cost decrease, primarily due to a 38% decrease in the price and a 5% decrease in consumption of diesel in Nigeria. It was offset by an $11.6 million increase in electricity costs, including as a result of Project Green. As previously highlighted through Project Green, we continue to prioritize alternative sources of power to reduce our dependency on diesel.
On Slide 12, we first review our adjusted levered free cash flow or ALFCF, which, as Sam pointed out, replaces the RLFCF metric. The primary differences from RLFCF is that when reconciling from cash from operations, ALFCF only includes the cash cost of business combination transaction costs, other costs and other income. ALFCF also excludes the reversal of movements in the net loss allowance on trade receivables or bad debt and impairment of inventory. This better reflects the liquidity position in each period.
In Q3 '23, we generated ALFCF of $80 million, an 11% decrease versus Q3 of 2022 due to a combination of factors, including the decreased revenue and adjusted EBITDA we've discussed already and increases in net interest paid and income taxes paid, all partially offset by decreases in maintenance CapEx withholding tax and lease payments made. However, as a reminder, the ALFCF growth rate includes the $18 million of one-off revenue in the third quarter of 2022. ALFCF cash conversion rate increased to 34.3% versus the prior year's quarter.
Turning to CapEx. In Q3 '23, CapEx of $105 million decreased nearly 40% year-on-year. This decrease was primarily driven by a lower capital expenditure for our Nigeria and SSA segments of $72 million and $22 million, respectively, partially offset by an increase in capital expenditure of $25 million for our LatAm segment. The decrease in Nigeria was primarily driven by decreases related to maintenance capital expenditure, Project Green and New Sites capital expenditure, while the decrease in the SSA segment is primarily driven by decreases related to New Sites capital expenditure and some other capital expenditure we had. The increase in LatAm is primarily driven by increases related to New Site CapEx. Our spending for Project Green was $8.3 million during the third quarter of 2023, and the year-to-date spend was $83 million, while we have spent a total of $187 million since we began the project versus the original $214 million total CapEx forecasted.
On the segment review on Slide 13, I'll first walk through our Nigeria business. The Nigeria macro environment remains complex as we discussed on our prior earnings calls this year. We are still encouraged by the swift initial actions taken by the new government, although it is clear that more work needs to be done. We remain in close contact with our key customers, 2 of which have again recently published healthy top line results in their businesses, albeit also showing the impacts from the Nigeria devaluation. We also continue to work closely with various regulators, our vendors and our local banking partners to continue to best position IHS.
While we remain cautiously optimistic, U.S. dollars continue to be difficult to source with FX reserves in the country having decreased to $33.2 billion at the end of September 2023 from $34.1 billion at the end of June 2023. Market participants continue to believe that the CBN will need to step in at some point to inject liquidity into the system and clear the backlog of FX transactions, and they have been published stories recently regarding potential government actions already underway. Meanwhile, the price of both oil and ICE Gasoil have increased recently. Looking at ICE Gasoil, it was $911 per ton in Q3 of '23, up from $687 per ton in Q2 of '23.
Moving to real GDP growth. It expanded by 2.3% in the quarter, but with a now lower projected full year 2023 growth rate of 2.9%. Inflation jumped to 26.7% this September versus 20.8% in September '22, with the removal of the petrol subsidy, a large factor therein. Overall, however, we continue to believe the business remains well positioned for long-term success and to endure the continuing macroeconomic challenges.
To this point, our Nigeria business once again delivered strong organic results in the third quarter, tracking well on all key metrics. Revenue of $271 million decreased 24% year-on-year on a reported basis but increased 36% on an organic basis, in each case reflecting the devaluation over the quarter and the other items we've discussed. Organic growth was driven primarily by FX resets, escalations and lease amendments and the negative FX impact was $213 million or 59.9% due to the devaluation.
Our tower count decreased by 3%, and our total tenant count increased by 0.3% each versus the third quarter of '22, largely reflecting the planned decommissioning discussed earlier this year, which does not impact revenue. Our colocation rate consequently improved to 1.58x, up from 1.53x in the third quarter of '22. Lease amendments continued to be a strong driver of growth with these increasing by 14.3% quarter-on-quarter as our customers added additional equipment to our sites, particularly 5G upgrades.
Q3 '23 segment adjusted EBITDA in Nigeria was $158 million, a nearly 25% decrease from a year ago, and segment adjusted EBITDA margin was down 90 basis points to 58.2% in each case, largely driven by the Naira devaluation impacting revenue, partially offset by an overall decrease in cost of sales. In our Sub-Saharan African segment, towers and tenants increased by 1.6% and 2.7%, respectively, versus the third quarter '22. Revenue increased by 16%, of which organic revenue grew 21%, driven primarily by escalations, New Sites, colocations and FX resets, while FX was a 4.4% headwind.
Segment adjusted EBITDA increased by 4.4%, driven primarily by the increased revenue, partially offset by increases in cost of sales and administrative expenses. Segment adjusted EBITDA margin decreased to 49.7% from 55.3% in Q3. We continue to monitor the macro environment in South Africa, particularly the ongoing power load shedding by the national utility, which appears to have moderated recently, and as previously discussed, we'll continue to evaluate our power managed services offerings.
In our LatAm segment, towers and tenants grew by 6.6% and 5.2%, respectively, whereas revenue and segment adjusted EBITDA increased by 23% and 27%, respectively, in all cases versus Q3 '22. In Brazil, our second largest market was 7,388 towers, macro conditions were largely positive as FX rates held steady and interest rates came down. While inflation did go up Q-on-Q, [we saw it take back down] again in October. In our LatAm segment, overall, Q3 '23 organic revenue increased 15%, driven primarily by an increase from ISystems fiber deployment and escalations. Segment adjusted EBITDA grew by 27% in the quarter with a segment adjusted EBITDA margin of 73.6% a 240 basis point increase.
In the MENA segment, towers and tenants grew by 10.1% and 10.6%, respectively, in Q3 '23 and revenue grew by 13%, including 7.4% organic revenue growth. Segment adjusted EBITDA grew by 35% in the quarter with a segment adjusted EBITDA margin of 50.2%, reflecting the increased revenue and the decrease in cost of sales.
On to Slide 14, and I'll briefly highlight our KPIs. As of September 30, our tower count was 39,739, up 0.9% from the same period last year, driven primarily by ongoing New Sites in LatAm and Sub-Saharan African segment. As you can see in the chart on the top right, collectively, we built over 400 towers during the third quarter of 2023, and as we continue to see the ramp-up in build through the quarters of 2023 to achieve the full year target of approximately 1,250 new build sites. Total tenants grew 2.3% with the colocation rate of 1.49x, up slightly versus last year. We continue to point out that lease amendments are a significant factor for us, particularly in our Nigerian segment, given the historic 4G and now increasing 5G activity we are seeing. These amendments increased by almost 17% year-on-year.
On Slide 15, we look at our capital structure and related items. At September 30, 2023, we had approximately $4.14 billion of external debt and IFRS 16 lease liabilities. Of the $4.14 billion of debt, $1.94 billion represents our bond financings and other indebtedness increased $370 million that we drew down in 2022 from the [$600 million 3-year] bullet term loan at the IHS Holding Limited level. However, in October, we reduced the available undrawn commitments, as Sam mentioned, under this term loan by $100 million now down to $130 million and extended the availability period of this undrawn balance to April 2024.
Capacity under the group RCF has increased from $270 million to $300 million in the quarter. And in November, we extended the maturity of this facility from March 2025 to October 2026. There are currently no amounts outstanding under either the group RCF or the local currency RCF we have in Nigeria. Additionally, during the quarter, in Brazil, we issued debentures for BRL 1.2 billion, approximately $238 million that amortized semiannually until maturity in August 2031. The proceeds of the issuance of the debentures were used to repay in full the existing principal debt of BRL 714 million, which is approximately $142 million as well as for general corporate purposes. This Brazilian local currency refinancing extended the maturity of the outstanding debt and reduce the interest rate versus the prior debt.
Cash and cash equivalents was essentially flat at $425 million at September 30. And in terms of where that cash is held approximately 15% of the total cash was held in Naira at our Nigeria business. Consequently, from all these moving elements, at the end of Q3 '23, our consolidated net debt was approximately [$3.7 billion], and our consolidated net leverage ratio was 3.2x, up 0.1x from June and still at the low end of our net leverage target range of 3 to 4x, further demonstrating our strong balance sheet. However, similar to what we said last quarter, I would note that in the light of the Nigeria devaluation, we do expect leverage to tick up slightly more into the first half of 2024.
Moving to Slide 16. We are maintaining our guidance for revenue, adjusted EBITDA and CapEx. However, we are replacing our FCF guidance with ALFCF. Although we have retained guidance in absolute terms, we have reduced our expectations for the Naira for the fourth quarter to [NGN 775 to $1 from the previous NGN 750 to $1]. As a result, we now expect to be at the low end of the range for adjusted EBITDA. We also expect to be at the low end of the range for CapEx, but this is more a reflection of proactive decisions we are making to curtail our spend, and that will continue into 2024.
Our ALFCF guidance is the same range we previously had for RLFCF. However, it includes an approximate $8 million benefit in terms of the difference in calculation, which offsets the otherwise FX headwind we expect to see in adjusted EBITDA. As a reminder, we expect to see a step-up in revenue in Q4 '23 as we see the full benefit of our FX resets [high] to the Nigerian devaluation that began in mid-June.
Guidance also continues to include approximately $25 million in power pass-through revenue in South Africa, of which we have recognized $13 million through Q3. I do want to again caution that timing of such moves is difficult to predict and could be delayed, although we do not anticipate that this would impact adjusted EBITDA or ALFCF. For the year, we now expect to build approximately 1,250 towers. This includes an additional [50 towers] in Nigeria versus our previous guidance.
And on Slide 17, on the top, you can see revenue by reporting currency for Q3 '23, whereas on the bottom, we provide the breakout of revenue based on contract split. The right side shows the average annual FX rate assumptions used in our 2023 guidance and has been updated since last quarter. This equates to $11 million downside for the year versus rates assumed last quarter.
And that now brings us to the end of our formal presentation. We thank you for your time today. And operator, please now open the line for questions.

Question and Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Greg Williams from TD Cowen.

Gregory Bradford Williams

Great. My questions are really around the migration of MTN over to American Tower. It sounds like it's becoming a reality. And just wondering if you're preparing for this migration and what the impacts would be in the past? I think you noted it's [$45 million a quarter. But back then, the Naira was at 508] and with the deval, just hoping for an update on the exposure, the impact and how it ramps out in sunsets in '25 and beyond.
And the second question is just how practical is it to move 2,500 towers in a short time frame? And the risk is how much further can MTN go as you think about your contracts with d'Ivoire coast and Rwanda and Zambia and the threat they could go further from here.

Sam Darwish

This is Sam. Many questions. Maybe, let me try to dissect into like maybe 2 or 3 categories. I'll start by talking about probably the materiality to the business going forward. I mean look, even if they successfully moved these currencies, which is very questionable, we'll talk about in a second, it is still not material to the business. We have around 60,000 tenants across 40,000 sites of the group. And these 2,500 tenants in Nigeria, [barely] represents 4% of the total towers, maybe 7%, 8% of our group revenue. And the majority of the other renewals with MTN in Nigeria are coming up in 2029 and beyond the average center of our contracts over 7 years out with many beyond 2030. So we feel good about that part. And given our organic growth rate, which has been more than 20% in Nigeria over the past 3 years, we believe that we can make up for the impact of these towers through our various commercial relationships.
Now also, I think it's important to note that the market situation across all our markets, Greg is that they are underserved. It's an important point because, for example, we have more than twice the SIM cards per tower in Nigeria than in mature markets like the United States, thousands of villages remain without even cell phone coverage, this calls for more towers to be built even before we deal with issues like density requirements for 5G, the increasing subscriber demand for capacity, the quality of service, expanding coverage. So we firmly believe that capital and resources will continue to flow to growth and not to swap in towers from one operator to another. So that's in terms of materiality.
Now in terms of other renewals in other markets, look, outside Nigeria, many of our -- I mean, in Nigeria, in particular, I need to highlight that, that we are the largest by far. I mean remember, our closest competitor, we have 16,000 towers. Our closest competitor has 8,000, that's half of our size. Outside Nigeria, many of our other markets even lack a credible case alternative. It may take time and [engage in negotiations], but we feel good about our prospects, given the alternatives or actually lack of thereof to be more accurate. So that's on this matter.
Now in terms of the third matter, do we think that transition or that relocation is practical or pragmatic. Maybe let me start by addressing it from a different perspective. Moving business from one tower operator to another globally is very [rare]. And we have, as a sector, one of the lowest customer churn for good reasons. So to better put this into perspective, maybe let's look at the United States and the situation many of you guys are familiar with during the 2016, 2019 period. AT&T engaged a very public dispute with the TowerCos with public declarations to move towers and legal action threats and this and that, over a 2.5-year period. And after 2.5-year period, if you look at the SEC filings, they only move 500, 600 out of their 65,000 towers from one operator to another under 1%. Now this is the United States with its relatively advanced infrastructure, and this is AT&T and [barely 500, 600] towers were moved in a period of 2.5 years.
Now look at Nigeria by [contrast]. Unlike the United States, 95% of all towers in Nigeria don't have even a connectivity to the grid and need power systems complex to run, complex to build, and of course, producing to the environment. Unlike the United States also, there is a limited local manufacturing and almost all of the materials, Greg need to be built -- to build the towers and power systems will need to be imported into the company. Then unlike the United States, there are significant security, logistical concerns of transporting and building the tower, causing delays, causing additional costs, causing unnecessary headed, then you have the multiple levels of [environmental and regulatory] permits, very complicated permitting framework in Nigeria, by the way.
Then after all this, the process of relocating and optimizing the [ranging] network itself that covers the millions of customers that are being served using these towers and they have to do it after they build these towers. Now remember, again, we are the largest tower provider in Nigeria with 16,000 towers as I said. And the next nearest competitor has 8,000. This means that if you are moving towers, you need to likely build a substantial portfolio of the new tower. I can't just simply co-locate on existing tower locations that you have.
So in a nutshell, Greg, the [resource on AT&T ended up relocating 500, 600] sites over a 2.5-year period in the United States, while this relocation project that is being suggested -- suggests moving 2,500 in almost a year in Nigeria. I mean what about you saying. Look, this is why we are comfortable about where we are, but again, we have to be respectful. We have to be mindful of our client relationships. We continue to engage, and it's important to support our customers in every way possible. We are a service-driven company. We understand that we believe that, and we'll continue to think this way.

Operator

Your next question comes from the line of Philip Cusick from JP Morgan.

Philip A. Cusick

Can you quantify the expected revenue pickup in Nigeria for the contract resets over the next couple of quarters? I understand that it takes a little while on some of the contracts. And what of those are happen quarterly versus an annual maybe a January 1 reset? And then second, you mentioned the improved discussions with Wendel. Can you give us any more update on that relationship? And it seems like you just covered everything you could say on the MTN side.

Steve Howden

I'll take the first part. And so as you [rightly thinking] some of the contracts in Nigeria are resetting different points, and the vast, vast majority, over 93% of the contracts are reset in quarterly, but some of them reset with a spot FX rate at the beginning of the quarter and some take an average of the preceding quarter. So the ones that we've seen reset in Q3 were the ones that reset a spot on, on 1 July. And then we'll see another step up when those that take the average of the last quarter will reset again on the 1st of October, taking into account a full quarter of devalued Naira rate.
We haven't sort of quantified, but obviously being the last quarter of the year, given we posted 9 months results through so far. And you know what our guidance is, and you can pretty much see what the step up is. If I give you an example on the flow-through into EBITDA, we -- when you look at the results we've posted so far through the 9 months and look at the full year, the range is at $1,130 million to $1,150 million, even if we use the bottom of that range, you're looking at EBITDA just mathematically of $259 million. So that's going to be the first [$2 million] we've just posted in this quarter. So that gives you an idea just mathematically straight from our guidance of the sort of step-up that we'd expect to see in next quarter.

Sam Darwish

On the second question, Phil, regarding our shareholders, in particular, the pre-IPO shareholders. Look, we continue to talk. It's very important to talk to engage, to communicate. To note also that we are sticklers, when it comes to the standards of our governance, and we are always keen on ideas to improve the standards of governance and equally important, we're also keen on any idea that could help value creation, value exploration, et cetera, et cetera. So this is a good point of why we decided, by the way, to list our company in the United States under the watchful eye of the United States Securities and Exchange Commission. It's a very high buy a lot of companies or global companies avoid because they don't want to be a health accountable to such high standards, not us. Now having said that, our Board of Directors also that is made of industry bellwether [that also physical duties] to protect and safeguard the interest of our minority investors and our various clients. It's something we are steadfast above.
So again -- but I do acknowledge, and it's important to keep talking in the dialogue and finding solutions with our pre-IPO shareholders, and hopefully, the reason will raise up over time. But having said that, also fell in an environment where the rising and already high interest rates are a problem for everyone, including public equities, including our peers, including our markets, we have to remain focused on our business and the running of the business itself. We believe we have a very resilient business. We believe it's strong. We intend to keep strengthening the business and keep growing it. But the resilient business is also demand alert towards -- alert and focused towards. And we see our job as primarily running the business to the benefit of all shareholders, and we intend to keep most of our focus there.

Operator

(Operator Instructions) And your next question comes from the line of Brett Feldman from Goldman Sachs.

Brett Joseph Feldman

A couple of questions. So you made the comments about a portfolio review. And it sounded like you were discussing it within the context of being more focused on where you would deploy capital. So it's a big capital projects. But I'm curious whether the portfolio review is broader and maybe looks into whether there are assets you could sell or monetize, whether it's markets or just unique pieces of the portfolio? I saw you had some assets held for sale in your Sub-Saharan African markets, and I wasn't entirely sure what the context on that was.
And then regardless of the answer, one way or the other, you would have more excess capital either because you were spending less on capital projects or perhaps generating capital from selling assets. How would you go ahead and prioritize that additional capital? Would it mostly go towards further strengthening the balance sheet? Or could that be something that could fund the buyback program, which still has a lot of capacity under it?

Sam Darwish

Look, Brett, I think the important part is, again, our main focus at the moment, the business, the balance sheet, making sure basically that we remain as a resilient as we've always been. Now having said that, again, we've always said we are extremely mindset of where the share situation is. And this company constantly reviews every option that is out there. I mean there is [no store] that we want to leave unturned, basically to try and get ourselves into a better place in terms of exporting to the world showing how undervalued we believe our share is. And in addition, of course, maintaining and finalize keep moving along the lines of strengthening cash flow generation in our balance sheet. So I can't go into details unless things kind of like get decided and announced. But all options are on the table, to be honest.
And in terms of the extra cash that we will -- we hope to kind of like [show up] and achieve. Again, all options are open. We are constantly reviewing. Remember, we are a growth company at core. So we'll always review and look at potential growth opportunities. But every other option, including potential buybacks, other things are on the table.

Steve Howden

Brett, I'll just add -- I'll just add. Keep in mind, we think about just one bucket of that question, which is the CapEx that we spend each year. And whilst we're not getting into guidance for 2024 at this point in time, just remember that in the last couple of years, we'll have spent in excess of $600 million per year on a variety of projects, growth-oriented, towers, fiber, Project Green. And some of those things will have a different flavor next year. Project Green, as we know, was a heavy spend in 2022 and 2023, and will be a much lighter spend in 2024, purely because of the program that we've announced publicly. Likewise, with towers and fiber, we're really thinking about the trade-off of growth versus cash generation and cash preservation within the business such that we're making the right decisions and again, as Sam said, trying to generate maximum value for shareholders.

Operator

Your next question comes from the line of Michael Rollins from Citi.

Michael Ian Rollins

Two questions, if I could. The first is you mentioned and referenced that you have low churn in the business. I was just curious if you could articulate what those churn rates look like for the company as well as for any of the key geographic regions? And then secondly, just taking a step back, just curious if you can remind us where you have common ground with MTN and Wendel, and where there are differences in perspective? And if any of those differences have evolved, changed over the last few months is we're just trying to appreciate the kind of the background to the situation.

Steve Howden

Mike, so the first one on churn. As you know, we don't include that in our revenue growth, [of course not selling factor] principally, because it's quite small, something that we've been discussing with you and others for a while. Given, obviously in the quarter is gone, it was [70]. So across a base of 60,000 tenants, our churn was [70. In prior quarters, sometimes it's 100, sometimes 150], sometimes it's next to 0. So the churn rates over a blend period of time, and they're sort of 1%, maybe even sub-1%. And then when you look at also who those tenants are, that churn tends to be on what we call the nonkey customers. We define key customers in our disclosure materials the top tier of customers who represent north of 92%, 93% of our revenue base. And actually, the majority of the churn that we do see, albeit small comes out of the nonkey customers.

Sam Darwish

On the second question, Mike. And again, I've spoken about that a few minutes ago. We took our shareholders, in particular, our pre-IPO shareholders Wendel and MTN have been [spoken] about the governance requirements, which on this side, we perceive more efforts to change the balance of influence between them and us and the post IPO shareholders. And given that one of them in particular is a client is actually a large client. This has a substantial complexity to the situation. So their demand, their requirements are clear. It's a complex discussion, and we will report, Mike, as an 1 appropriate.

Michael Ian Rollins

If I could just follow up with one more. In the past and used on this call, you referenced different actions that the company is trying to take to improve shareholder value. Is there a higher level set of goals or principles that you want to bring into the company to continue to create forward progress on that gold improved shareholder value. Is there anything that you've been able to simplify or determine as the best course if you do 1, 2, 3 things that this can have the best results for shareholders.

Steve Howden

Mike, I'll maybe able to get that. I mean, we expect on this call and previously around resolving the matters with MTN and now on the shareholder side. We're very cognizant of that. And we've also been a bit more forthcoming on this quarter around how we're going to look at CapEx and the organic side of capital deployment. And so you're starting to see some things come through that we'll continue to [adding over time] in recognition of where we are as a business within our markets also within the globe within the world in terms of the macroeconomic situation that everybody is facing.
And so those are just a couple of the initial elements of thinking that you're starting to see more of. And we're looking forward to pushing those couple of initiatives forward. And then as we continue progressing, as Sam said a few moments ago, as a company, as a board, we're constantly thinking, and no one's happy with how the company is valued today, and we're constantly thinking about ways that we can look to improve upon that, and we'll communicate on those as and when they become (inaudible).

Sam Darwish

I mean, Mike, so don't forget, we have issues we're dealing with. We have the global macro situation, which is not conducive. We have a concentration in Nigeria, which we're trying to kind of like [sold for our diversify out]. We have relatively some elevated client concentration, which also needs to be addressed. We have -- in addition to all of this, we have a daily trading situation, which I'm happy to say that has improved, has -- as I said earlier, our daily trading volumes have tripled, almost tripled over the past period. So moving in the right direction. But there are multiple issues that we need to deal with. And we are trying to deal with each of it in a different way.
In terms of the trading, for example, we have recently removed all lockups on all shareholders. We announced a potential buyback now advise we just exercised a small part of it. But again, we need to be mindful of how do we allocate our capital. So there are initiatives to address basically the various levels of why do we see the share price is undervalued. And we may come back with other things on different -- on some of these other different challenges. But again, [the Rome] was not built in a day, and we need to be thoughtful and careful, especially navigating this challenging global and shareholder situation.

Operator

That brings us to the end of the IHS Holding Limited Third Quarter 2023 Earnings Results Call. Should you have any questions, please contact the Investor Relations team via the e-mail address, investorrelations@ihstowers.com. The management team, thank you for your participation today and wish you a good day.