Good day, and welcome to the IHS Holding Limited Earnings Results Call for the three-month period ending June 30, 2022. Please note that today's conference is being webcast and recorded. If you would like to ask a question, please press star and then one on your telephone keypad at any time. At this time, I'd like to turn the conference over to Colby Synesael. Please go ahead, sir.
Thank you, operator. Thanks also to everyone for joining the call today. I'm Colby Synesael, the SVP of Communications here at IHS. With me today are Sam Darwish, the Chairman and CEO of IHS, and Steve Howden, CFO. This morning, we published our financial statements for the three-month and six-month periods ended June 30, 2022 on the investor relations section of our website and issued a related earnings release and presentation. These are the consolidated results of IHS Holding Ltd., which is listed on the New York Stock Exchange under the ticker symbol IHS and which comprises the entirety of the group's operations.
I'd also like to note that this morning we have filed with the SEC an amended annual report on Form 20-F/A, which includes a restatement of the company's consolidated financial statements and related notes for the year ended December 31st, 2021, which updates the financial statements for an error in the provisional business combination accounting for the company's November 2021 acquisition of 51% controlling interest I-Systems. the error resulted in an overstatement to goodwill, an understatement to non-controlling interest, and an overstatement to other reserves on our balance sheet, and an understatement of exchange differences on translation of foreign operations on our income statements. Please refer to the explanatory note at the beginning of the Form 20-F/A for further detail.
Further, we'd like to point out that the restatement has no impact on previously reported revenue, operating profit, loss for the year, Adjusted EBITDA, cash from operations, or Recurring Levered Free Cash Flow, nor does this correction affect the company's underlying business operations. Before we discuss the results, I would like to draw your attention to the disclaimer set out at the beginning of the presentation on slide two, 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 for Form 20-F/A filed with the Securities and Exchange Commission and other filings with the SEC. We'll also refer to non-IFRS measures that we view as important in assessing the performance of our business. 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 Sam Darwish, our Chairman and CEO.
Thanks, Colby, and welcome everyone to our second quarter 2022 earnings results call. We had a solid quarter despite what continues to be a volatile macro environment across the world, seeing continuous double-digit organic revenue growth excluding one-time items. Although the higher cost of diesel impacted Adjusted EBITDA, while RLFCF benefited from a favorable withholding tax impact and some timing on maintenance CapEx. Demand continues to track expectations, and based on our H1 results and our expectations for the back half of the year, we are raising our 2022 guidance for revenue by $10 million at the midpoint and reiterating our guidance for Adjusted EBITDA, RLFCF, and capital expenditures.
Steve will take you through the results in greater detail, but before doing so, I'm going to discuss our growth strategy, including a focus on revenue, Adjusted EBITDA and RLFCF, provide an overview of IHS following our recent acquisition of the MTN South Africa portfolio, and lastly, provide a strategic update on other key topics. On slide four, we again show our revenue, Adjusted EBITDA, and RLFCF results over the past five years that generated organic revenue growth of 18.2%, Adjusted EBITDA growth of 15.1%, and RLFCF growth of 14.1% compounded annually during this time. Given our short existence as a public company, I think it's important to again highlight our long and established track record of generating attractive risk-adjusted growth.
We believe this attractive growth is a function of the key elements of our strategy, namely the strong demand trends in our markets, the inherent benefits of the colocation model, thoughtful and prudent M&A, and a broadening focus on other communication infrastructure solutions, including fiber, all with a focus on driving attractive profitability and ultimately ROI for our shareholders over time. The charts on slide five are similar to those on slide four, except they focus on the past five quarters as opposed to five years. You can see we delivered double-digit growth for reported revenue, while organic revenue growth of 10% was impacted by the one-time benefits we highlighted last year. Right in line with the expectations we communicated last quarter.
These one-time benefits to revenue last year, as well as additional one-time benefits to Adjusted EBITDA last year, also impacted our Adjusted EBITDA growth, which would have otherwise also grown double digits. While RLFCF was further impacted by the timing of interest payments, following our bond raise late last year. On slide six, you can see that including the 5,691 towers we acquired in South Africa on May 31st, IHS owns nearly 40,000 towers across 11 countries, making us the third largest independent multinational tower company by tower counts in the world. This geographical scale helps both further diversify our revenue stream, having initially been founded as a Nigerian tower company, but also positions us in some of the largest emerging markets in the world by GDP, including Nigeria, Brazil and South Africa.
In fact, assuming a full quarter impact from South Africa, our largest market, Nigeria, now accounts for approximately 66% of total revenue versus 76% just before we entered SA. That's despite what continues to be outsized growth in Nigeria. Separately, please note we now disclose revenue by our top customers in our appendix on page 22. Turning to slide seven, as I just mentioned, we have now closed the additional acquisition of 5,691 towers from MTN South Africa and are now the largest independent towerco in the country. Our South Africa team is led by Sandile Msimango out of our new office in Johannesburg. I've known Sandile for some time, as he previously worked with MTN, where he led the strategic M&A and disposals across MTN's entire footprint for the company's passive infrastructure.
As Africa's most industrialized market, South Africa represents a huge opportunity for IHS. Having established a strong foundation in our other African markets, the entry into South Africa is timely. South Africa has a young and growing population of 60 million people who are increasingly data-driven. In March, the country's telecom regulator, ICASA, concluded their multi-band auction of mobile spectrum, which has given MNOs greater scope to invest in their networks. Longer term, we believe this paves the way for 5G, which will require more towers and technological innovation. We are already seeing the first seeds of this, with South Africa's 5G population coverage having increased from 0.7% in 2020 to 7.5% in 2021.
In 2021, MTN South Africa became the first MNO to reach over 1,000 5G sites in any country on the African continent, and announced their target to cover at least 25% of South Africa's population with 5G by the end of 2022. Indeed, by 2026, it's estimated that 21% of South Africa's SIMs will be 5G. These trends offer IHS a unique commercial opportunity from the onset. In addition, our provision of power managed services on approximately 13,000 sites for MTN is a key differentiator. This solution, which today is largely focused on battery backup, is expected to drive attractive returns in line with our colocation business. Given the elevated levels of load shedding occurring in the country of late, the need for alternative solutions to the grid are increasing, and we are working with MTN to help further solve for their power requirements.
In due course, we'll also broaden this service to benefit other MNOs who also face the same challenges resulting from power cuts. I also want to acknowledge recent news that MTN and Telkom SA have announced they have entered into discussions for MTN to acquire Telkom, subsequently followed by Rain's announcement of its interest in merging with Telkom instead. We await to see what ultimately occurs. However, we stand ready to support all of our customers and believe the opportunity for IHS in South Africa remains highly attractive. Turning to slide eight, starting with M&A, we are happy with our current geographical footprint, and as we noted last quarter, our current focus on M&A is in our existing markets with a particular focus on South Africa and Brazil as we look to leverage our cost structures that are already in place.
As part of our M&A strategy, we have been evaluating opportunities across fiber, tower and data centers. While we expect towers to represent the overwhelming majority of our revenue streams for the foreseeable future, given fiber and data center infrastructure is less mature in our markets, we believe our overall value proposition will increase with a broader and more varied solution set. Regardless of the specific asset though, any transaction we do aims to be accretive to our long-term value and returns thresholds only increase as cost of capital increases. In addition, while we are willing to increase our leverage for the right opportunity, we expect to remain within our three to four target range. Moving on to upstreaming. We upstreamed $147 million in Nigeria throughout second quarter 2022.
Given the outsized level of upstreaming we have already completed this year, as of June 30, we had approximately $67 million in cash in Nigeria, of which $45 million was held in Naira and the remainder in USD. It's important to note, though, that despite the challenging macro environment, we have strong relationships with our local banking partners, that we do not speculate on forex movement, and that we will continue to upstream prudently when needed as we have a long track record of doing so. Shifting to our stock liquidity.
As you will recall, in May, our board exercised its right to waive the registered offering requirement for the first block of shares subject to the lock-up arrangement under our shareholders agreement, which block included upwards of 78 million shares, which would effectively be available to be sold in the discretion of their holders, subject to the applicable securities laws. We will continue to evaluate options that we believe will enhance the value of the company, while at the same time we continue to focus on delivering against our publicly stated fundamental objectives and establishing a track record with investors. Lastly, I'd like to conclude my remarks on page eight by discussing our planned Project Green announcement this fall. As many of you know, in many of the places we operate, grid connectivity has been unavailable or unreliable.
Thus, in order to provide connectivity, a service that is increasingly being regarded as a human right across the globe, we and our MNO customers have had to historically rely on diesel run generators to power our sites. While we have historically worked to augment our use of diesel with alternative solutions, including the use of batteries and solar, with 20% or 28% of our towers in Africa still run fully on a generator as of year-end 2021, we feel we can do more.
Our team and I personally have been busy the last few months analyzing the various opportunities across many of the countries we operate in to reduce our consumption of diesel and our greenhouse gas emissions by the combination of connecting more sites to the grid, which just a few short years ago was not an option in many locations, and adding more battery and solar solutions. At this point, we are finalizing our plans, but it's time to share these with you before we report earnings next quarter. While being cautious as to how much I can discuss now, we expect to start investing in Project Green in the second half of this year, which means at the time we announce Project Green, we expect to be raising our 2022 CapEx guidance. We expect the return to be attractive and to give you a sense of the opportunity.
In Q2 2022, we spent $94 million on diesel, plus last year we spent approximately $69 million on diesel generator maintenance. Combined, this equates to nearly $450 million of annualized spend and represents the opportunity set from which we will extract savings. Lastly, you see on page nine, we published our 2021 sustainability report in May. This was our fourth sustainability report and serves as our second Communication of Progress, COP, for our commitment to the United Nations Global Compact. As I have said many times, sustainability is the core to who we are and to our business. First and foremost, we believe that our business model is inherently sustainable in that we deliver shared infrastructure solutions in emerging markets that promote digital connectivity and inclusion and improve the lives of the communities we serve.
This encourages greater access to things like education, healthcare, and financial services, while the infrastructure sharing reduces the environmental footprint of the telecom landscape in our geographies. With Project Green, it is hoped that our drive to reduce the role of diesel in our business will further improve the environmental impact of the communications infrastructure that we operate and upon which our MNO customers and their customers depend. Furthermore, the initiatives you see on the slide here are but a few of the many in ways in which IHS seeks to make a difference in our community. With that, I will turn the call over to Steve.
Thanks, Sam, and hello everyone. Turning to slide 10, as Sam mentioned, we are pleased with how the business performed in Q2 2022 and are excited to have entered the South African market in a lease position. You will note that towers, tenants, and lease amendments, as well as consolidated revenue, have all increased by double-digit percentages versus Q2 last year, driven by both organic and inorganic activity across our markets. Before we delve into the financial performance, I want to remind everyone of the one-time $24 million of revenue in the second quarter of 2021 and the associated one-time $61 million of Adjusted EBITDA and RLFCF in that same second quarter 2021.
This performance last year obviously impacts the comparability with performance this quarter in 2022, so we will draw out these differences over the next number of slides so you can understand the true performance of the business this quarter. Q2 this year, we delivered 16% growth in consolidated revenue versus last year. A quarter last year that included that $24 million of one-time revenue, whereas Q2 2022, Adjusted EBITDA and Recurring Levered Free Cash Flow appear lower due to those one-time items in Q2 of last year, as well as factors that I'll address momentarily. Our Adjusted EBITDA margin was 51.1%. Our level of investment in CapEx to grow the business increased by 93% in the second quarter, and our consolidated net leverage ratio increased to 3.1x as we had mentioned last quarter.
In both instances, largely due to the South African and Brazilian acquisitions in recent quarters. Turning to our revenue on a consolidated basis, slide 11 shows the components of that 16.4% reported consolidated revenue growth. Organic revenue growth of 9.9% in Q2 2022 was driven primarily by CPI escalations, lease amendments, power indexation included within other and FX resets, as well as new sites and new colocations. The level of escalations you see reflects our contract protections in the current inflationary environment, and together with FX resets, offset the negative FX impact by 520 basis points. In terms of the other categories, power indexation contributed $8 million and the Nigerian fiber business I-Systems together another $5 million.
This was more than offset by the absence of the $24 million of one-time revenue in Q2 2021 that I just mentioned, and a reduction in revenue recognition from a slowdown in payments from our small ICT customer in Nigeria. On the right, you can see the organic growth rates of each of our segments, which I will talk about on the next slide. Inorganic growth was 8.7% in Q2 2022, primarily reflecting the South African acquisition in the quarter, GTS SP5 in Q1 2022, I-Systems in Q4 last year. Turning to the segment review on slide 12. First, I'll walk through the Nigeria business and then highlight the other segments.
Nigeria macro environment in Q2 2022 saw increased volatility quarter-on-quarter, with real GDP growth expanding by 3.1%, bringing the full-year 2022 growth rate to 3.4%, while inflation increased to 18.6% this past June, versus 17.8% in June last year. The NAFEX currency rate ended the quarter at 425 Naira to the dollar, while FX reserves marginally decreased to $38.9 billion from $39.3 billion at March 31. Brent crude oil averaged approximately $114 per barrel in Q2, up approximately two-thirds from the same period last year.
We have recently begun to see an increased premium applied to the importation of refined products like diesel into Nigeria that weaken the historical correlation we've seen between global price of oil and local price of diesel. This emanates from the reduction in global supply of refined products as a consequence of the Russia-Ukraine situation. Telecommunications remains an important part of the Nigerian economy, accounting for around 12.6% of GDP in Q4 last year. We continue to monitor economic conditions in Nigeria closely, particularly in light of the cascading effects of the Russia-Ukraine situation and the upcoming presidential election in Nigeria in February 2023. Of course, we remain in close contact with our key customers, of which two have recently published healthy top-line results in their businesses.
Against this backdrop, our Nigerian business once again delivered strong results in the second quarter, tracking well on our key metrics. Top line growth was driven primarily by CPI escalators, lease amendments, power indexation, and FX resets. Our tower count grew by 1.3% inclusive of some planned decommissioning. Our total tenant count increased by 4.4% versus prior period, and the colocation rate was up at 1.53x . These amendments continue to be a strong driver of growth, with these increasing by 44% year-on-year as our customers added additional equipment to our site, particularly 4G upgrades. The improved operational performance is reflected in our Nigeria financial results. Q2 2022 revenue of $321 million increased 8.3% year-on-year on a reported basis, and 10.4% on an organic basis.
Remembering the $24 million one-time revenue in the second quarter of last year within the Nigerian segment and therefore holding its growth percentage down. The revenue growth reflects increased activities from two of our key customers, partly offset by approximate $4 million decrease in revenue from a smaller key customer, which stems from a decrease in revenue recognition due to a delay in payments. Q2 2022 Adjusted EBITDA in Nigeria was $184 million, a 24% decrease from a year ago. Adjusted EBITDA margin was 67.2%, reflecting in part an increase in power generation costs of $37 million, and the absence of that total $61 million of one-time benefit in Q2 of 2021.
In Q2 this year, Adjusted EBITDA in Nigeria was additionally impacted by that reduction in revenue recognition from our smallest key customer in the market, as I just mentioned. Let me now summarize the results of our other segments. Our African segment now reflects the inclusion of our South African business, and consequently, towers and tenants increased substantially versus last year. Q2 2022 revenue of $95 million increased by 13%, of which organic revenue grew by 4.6%, primarily through CPI escalators, new sites and colocation. Inorganic revenue contributed $10.7 million, driven by the one-month contribution from the South African acquisition, while the negative FX impact was $3.6 million. Adjusted EBITDA increased by 15%, again driven primarily by the increased revenue included from South Africa, offset by increases in maintenance fees on security costs.
The Adjusted EBITDA margin increased to 55.8%. Turning to our Latam segment, towers, tenants, revenue, and adjusted EBITDA all increased substantially due to the meaningful inorganic growth which continued this year with the GTS SP5 acquisition. In Brazil, our second largest market overall with 6,869 towers, macro conditions were somewhat mixed as FX rates, interest rates, and inflation all appreciated. In our Latam segment overall, towers increased by over 50% and tenants by over 70% due to the acquisition. Q2 this year revenue basically tripled, with organic revenue increasing 28% driven by CPI escalations, new sites and colocation, with inorganic revenue increasing by 164% from the acquisition. There was also a + 9% FX impact. Adjusted EBITDA also tripled with a margin of 72.2%.
In MENA, towers grew by nearly 18% and tenants by nearly 19% in the quarter, and revenue grew by 24%, including 13.5% organic revenue growth and Adjusted EBITDA grew by nearly 35%. In all of these cases, mainly as a result of closing the fourth tranche of the Kuwait acquisition and from new site construction. The Adjusted EBITDA margin increased to 47%. Turning to slide 13. I'll discuss our KPIs. As of June 30, our tower count was 39,052, up by nearly 9,000 sites over 29% from Q2 2021. This was driven largely by our South African and GTS SP5 acquisitions, as well as ongoing new site builds in Nigeria, Latam, and SSA.
Collectively, these new build programs accounted for most of the 240 towers built during the second quarter, as you can see in the chart on the top right. In addition to the new sites reported in 1Q and 2Q of this year, we also have a significant number of rural new sites under development in Nigeria that we expect to go live in the second half of 2022. Total tenants grew over 26% year-on-year to 67,381, with the colocation rate at 1.47x down 0.04x versus last year. Two things to continue to point out related to our colocation rate, which we define as total number of tenants across the portfolio divided by total number of towers at a given time.
Thirdly, lease amendments, which are a significant factor in our Nigeria segment, and again, grew substantially, are not included. Secondly, when you're a significant acquirer and builder of towers as we are, then you are typically adding to the denominator period on period, even as we continue to lease up our portfolio. For example, our South African acquisition has a 1.2x colocation rate, which of course, is lower at conception than our portfolio average. We continue to see no reason why we can't get 2x or greater on our overall portfolio over the long term, and our more mature portfolios of towers are at or above that rate. Lease amendments increased by 43% year-on-year as our customers added equipment to their sites, particularly 4G upgrades in Nigeria. On slide 14, you can see our consolidated revenue, Adjusted EBITDA, and Adjusted EBITDA margins.
In Q2 2022, IHS generated $468 million in reported revenue, a 16% increase versus Q2 last year. While organic revenue growth was around 10%, each demonstrating the continued strong top-line growth trends of the businesses led by Nigeria and Latam in particular. Moreover, reported revenue growth was nearly 24% and organic growth nearly 17%, after excluding the $24 million of additional non-recurring revenue from Q2 last year. Overall, we continue to grow well in line with our stated objectives of seeking double-digit revenue growth on an annual basis. Regarding our Adjusted EBITDA and Adjusted EBITDA margin in Q2 2022, Adjusted EBITDA of $239 million decreased 13% versus the prior year, but increased almost 12% after excluding the non-recurring items from last year.
Adjusted EBITDA margin was 61.1% down from Q2 of last year. The year-over-year changes in Adjusted EBITDA, excluding the one-time benefits last year, primarily reflect the increase in revenue we've discussed, partially offset with year-over-year increase in cost of sales, mainly due to higher diesel costs, as well as increased SG&A associated with being a public company. Our generation cost of sales increased by $38 million, primarily in our Nigeria segment, as we note higher local cost of diesel in Nigeria given global reduction in refined products. Although these increased costs were partially offset by an $8 million increase from power indexation year over year. I'll speak more about the diesel impact in Nigeria shortly during our guidance section. We also try to increasingly prioritize alternative sources of power solutions to reduce the dependency on diesel.
As I mentioned, we expect to unveil the details of our diesel and carbon emission reduction plan, Project Green, later this year. On slide 15, we review our Recurring Levered Free Cash Flow, which we report in a manner consistent with our U.S. peers. We generated RLFCF of $88 million in Q2 2022, down versus Q2 2021, primarily due to a combination of factors, including again that $61 million of non-recurring items from Q2 last year that made the prior period appear higher. Also, the inclusion of $30 million of interest costs in the quarter this year due to a change in timing of our bond coupon payments post our November 2021 bond refinancing, and also a favorable withholding tax impact in Nigeria.
Excluding the non-recurring items from last year and normalizing for the new Q2 2022 interest costs, our RLFCF would have increased by approximately 5%. Our RLFCF cash conversion rate was 36.6%, down on the year, but up almost 100 basis points from last quarter. As you think about your models for the second half, given the positive impact from timing of maintenance CapEx we've seen in 2Q 2022, we expect to step up the maintenance CapEx spend in 3Q 2022. Additionally, there will be higher interest expense than in Q2, given new South Africa related financing and bond coupon phasing. That will reduce our RLFCF quarter-over-quarter, but RLFCF in 4Q 2022 should be similar to this second quarter.
Turning to CapEx in Q2 2022, CapEx of $147 million increased 93% year-on-year, primarily due to increase in Latam following I-Systems and GTS SP5 acquisitions, increased CapEx in connection with the South Africa acquisition and the license renewal in Cameroon, as well as increased CapEx in Nigeria relating to new site CapEx. On slide 16, we look at our capital structure and related items. At June 30, 2022, we had approximately $3.7 billion of external debt and IFRS 16 lease liabilities, up from almost $3.1 billion at the end of March 2022.
This change was driven in large part by increased debt from the $280 million draw down on our bridge loan in connection with as well as the implementation of a local credit facility in South Africa and facility drawn down in Brazil. Of the $3.7 billion of debt, $1.94 billion represent our bond financing, and $332 million of our senior credit facilities are in our Nigeria segment. Our undrawn group revolving credit facility remains at $270 million. Cash and cash equivalents increased to $567 million at the end of the quarter. In terms of where that cash is held, approximately 80% of the total cash was held in Naira for our Nigeria business, and most of the remaining cash was held in the U.S. dollar group level.
In terms of upstreaming, while we intend to disclose the amount we upstream on our fourth Q earnings call each year, on our first quarter 2022 call, we did disclose that we'd already sourced and upstreamed over $100 million in Nigeria. Following and including the completion of that upstream, we have now upstreamed a total of $147 million from Nigeria as of the end of Q2 2022. This upstream satisfied all USD debt obligations for this year, which is one of the objectives of our upstreaming program, as we don't speculate on the currency when we upstream as and when necessary. The conversion rate was at a premium to the current FX rates and meaningfully below the parallel rates.
Our consolidated net leverage was approximately $3.2 billion, with a consolidated net leverage ratio of 3.1x , which now reflects the closing of the South Africa acquisition and the related financing. It is at the low end of our net leverage target range of three to four times and further demonstrates our strong balance sheet. You'll note that we're now highlighting that 77% of our debt is in hard currencies with a fixed-floating ratio of 63%-37% respectively. Our weighted average cost of debt is 7.8% as of June 30, 2022. Now moving to slide 17, you can see we are raising our FY 2022 revenue guidance by $10 million at the midpoint of the range, and that we are maintaining our guidance for Adjusted EBITDA, RLFCF, and CapEx.
Step up in revenue largely reflects upside from the updated FX rates we are now assuming and greater power indexation revenue. As announced, we completed the MTN Nigeria acquisition on May 31, and in the abbreviated quarter, i.e., one month, we did not see any incremental pass-through associated revenue on the 5,691 acquired towers that will come into our revenue and cost in due course. We continue to exclude it from our guidance as we did last quarter. Speaking to Adjusted EBITDA and RLFCF guidance for a moment, we want to acknowledge that the price of diesel in Nigeria is proving more dynamic than initially anticipated as a result of an increased premium being applied to the importation of refined products like diesel into the country.
This is widening the effective spread between global oil price and the local diesel price in Nigeria, although they remain approximately correlated. While we saw some impact of this in Q2, we cautiously assume this may continue for the rest of this year. With oil currently around $100 per barrel as we sit here in mid-August, we are looking at whether we can lock in our diesel price for the remainder of the year. This will supersede our previous statement that every $5 change in oil should equate to an inverse $7 million annualized impact to Adjusted EBITDA. Given all of these dynamics, we feel comfortable with our Adjusted EBITDA and RLFCF range as is, but continue to closely monitor the situation and will update you all at Q3.
Regarding new sites, we have reduced our target to approximately 1,750 from approximately 2,350 towers. This has a minimal impact on our financials and is due to timing delays resulting in part from the current macro environment. As noted earlier, we expect a sizable step-up in the second half, particularly in Nigeria from rural new sites. Overall, we believe the business is proving resilient given the macro headwinds we are facing. Taking all this into account, we believe that revenue for FY 2022 will now range between $1.885 billion and $1.905 billion on a reported basis, which represents a 20% increase at the midpoint of the range versus last year and approximately 15% organically.
Having just lapped the more difficult year-on-year comparisons in the second quarter of 2022 that drove organic growth approximately 10%, we now expect organic growth to rebound back into the high teens in the second half. We continue to believe that Adjusted EBITDA will range between $1.005 billion and $1.025 billion, while we continue to believe that RLFCF will range between $310 million and $330 million. Here, the key point remains that we're carrying $23 million increase in interest costs year-on-year from the bond deal that we didn't make last year, and we are also remaining cautious on the wider interest rate environment around the world impacting our interest rate. Also, clearly, diesel price impact drops straight down to RLFCF.
We are also maintaining our CapEx guidance of $445 million-$585 million, but as noted, expect to increase our 2022 CapEx guidance later this year when we announce Project Green as we look to invest this year to start driving further savings in 2023. On slide 18, we discuss how FX impacts our business. On the top, you can see revenue by reporting currency, whereas on the bottom, we provide the breakout of revenue based on contract splits.
For those who may be less familiar, recall that while we are paid in local currency in each of the countries we operate in certain situations, portions of the contracts are linked to hard currencies such as the U.S. dollar or euro, where the amount the customer pays in local currency adjusts based on the exchange rate with the associated hard currency. These structures help protect against FX devaluation, the impact of which is reflected in our FX reset component in our organic revenue breakout. For more information on our FX resets, please see page 20 in the appendix. Also, please be aware that there is not a hard currency component to our contract structure in South Africa, which should impact the percentages shown on slide 19 with a full quarter impact next quarter.
This now brings us to the end of our formal presentation, but before we open questions, I wanted to take a moment to also cover what Colby mentioned earlier about the restatement of our financial statements for the 2021 fiscal year and the amendment to our annual report on Form 20-F/A filed this morning. As we said, this relates to an error on the provisional business combination accounting for the company's November 2021 acquisition of the 51% controlling interest I-Systems. while we're disappointed that this error occurred and thus taking the restatement, we'd again like to emphasize that the restatement has no impact on previously reported revenue, operating profit, loss for the year, Adjusted EBITDA, cash from operations, Recurring Levered Free Cash Flow, or leverage. Nor does this correction affect the company's underlying business operations.
As you will have seen from our Q2 2022 results this morning, we have also updated the balance sheet position further as planned with normal course purchase price allocation accounting for the I-Systems acquisition, which gets done in the quarters post completion of the deal. With that, we thank you for your time today, and operator, please now open the line for questions.
We will now pause briefly while we register questions in the Q&A roster. The first question comes from Phil Cusick from JP Morgan. Please go ahead, Phil.
Hi, guys. Thanks. Steve, I wonder if you can dig more into your comments on the relative price of diesel versus oil and any update on the refinery in Nigeria. Sam, can you just give us an update on the Nigeria business in general, anything shifting among your customers as currency volatility has been a little tougher? Thank you.
Hi, Phil. Thanks for the question. The quick one first on the refinery, no real update, late this year, probably more likely post the elections in Nigeria next year coming online. That's sort of end of February 2023 when those elections are. I would expect the refinery to come online after that all being well. In terms of diesel price, yeah, as you said, we've seen a bit of fluctuation around that in the quarter, in particular. We've seen the oil price move from $101 to $114, Q1 to Q2. We've got a bit of a catch up to do with pass-through revenue as well, which is reflected here.
We've seen sort of call it $3.5 million-$4 million impact on fuel costs running through this quarter. That's where we're saying being more cautious through the second half of this year. As I said in the prepared remarks, that's really driven by an increase in costs to bring refined products into Nigeria. There's a shortage in refined products globally, and getting into Nigeria has cost a bit more.
Hi, Phil. In terms of customers, Nigeria remains growing at a quick pace. MTN declared the results just recently, and they've received a 50% increase in revenue year on year. Airtel is seeing similar, although slightly less aggressive data. Airtel has more headwinds because of diesel than MTN. The trend in Nigeria remains the same, and we expect it to continue in the future despite disruptions in the current political situation.
Okay. If I can, one more. What is the potential to upstream cash out of Nigeria look like now? Given you've already done a lot, are you effectively out of that market until after the election?
We're not out of that market, no. But we will continue to assess through the second half of this year whether upstreaming makes sense based on the cost to do it. As you say, we've done a significant amount in whether it is Q2 this year. We're okay from that perspective. If you know with the right price then we'll look at it. No need to.
Thank you.
Thanks, Phil.
The next question comes from Greg Williams from TD Cowen. Please go ahead.
Great. Thanks for taking my questions. First one's on the M&A landscape. Just wondering what you guys are seeing if multiples are remaining sort of stubbornly high or if they're softening and maybe the cadence of the deals you're seeing. Second's just on the tower build guidance. You've lowered it in Nigeria and Brazil. You mentioned timing and general market conditions. Is that out of your hands being you know permitting and inflation or labor and equipment? Or is that something under your control because of like rising cost of capital? Thanks.
Thanks, Greg. The last one on the BTS, that's really around a few things. Firstly, customer demand just squeaking into next year. Secondly, supply chain of getting equipment in the right areas. We expect most of those volumes to catch up through the course of 2023. Really it's the timing piece, the reason for the reduction as we go into towards the back end of the year. On the M&A landscape multiples, I think if someone will jump in as well. I think we're seeing a slight cooling in multiples, but it really depends on, you know, case-by-case situation. You know, we've completed a number of acquisitions in recent quarters, busy kind of integrating those into the business.
I would say, yes, we've started to see slight cooling. As a buyer, potentially, we'd like to see more cooling.
Yeah. I think we've seen some pressures being caused due to kind of like higher expectations from the sellers. We've done the deal with GTS in Brazil, the deal with MTN in South Africa, both came at nice multiples. SBA just announced the deal recently with GTS, which also came at lower multiples. We don't see pressure on sellers to sell, to be honest. Again, that could be, there could be a lagging aspect, but for sure, we've seen some softening in general.
Got it. Thank you.
The next question comes from Brett Feldman from Goldman Sachs. Please go ahead, Brett.
Thanks. Thanks, and sorry to follow up on the diesel question. If I just think about the original guidance, the expectation that the average cost of diesel would be about $120 a barrel over the course of the year, that's about a 20% premium to what diesel is actually going for in the market. It would seem like you've got a 20% buffer to account for this incremental cost of importing refined products. I'm curious, is that essentially what the premium is now? Or is there actually still some conservatism baked into what you're applying? I know that you don't have anything for Egypt in your guidance.
I was hoping if you could just give us an update on where you stand with the opportunity to start building out in Egypt. Thank you.
Brett, as I said, in terms of the numbers that we're sending here in Q2, there's a movement from $101 to $114, which, yes, is less than $120 in guide. But there's also some, let's say volatility in terms of timing of collection of parts of the revenue as well, which is not reflected here. It's not quite as simple as doing apples to apples, but you're right, there is some additional buffer in there, in terms of the premium that is costing us to get into the country. You know, that's what we said. As I mentioned before, there's about $3.5 million-$4 million of real cost pressure coming through this quarter, from oil, from diesel.
In terms of Egypt, no, still outside of the guidance, still a country which we obviously do a lot of work in, talking to the customers, posing different things to them. You know, we'll bring it into the guide when we feel like there's something concrete to do so. Still very much a country of interest, but not at a stage yet where we've got, you know, something inked or signed in terms of rollout.
All right. Thank you.
The next question comes from Jon Atkin from RBC Capital Markets. Please go ahead, Jon.
Thanks. On the build to suit topic, I wonder if you could just remind us what your expectations are around multiple tenancy, as well as to what degree in general, you know, perhaps on prospective build to suit commitments, do you see competition for these contracts with the MNOs?
Hi, Jon. So you won't be surprised if we say different market by market. I mean, generally speaking, we would expect BT, BTS or new build towers to get to 2x between five and, let's say, seven years, depending on the market in which they're in. Now, that picture can be slightly muddy. For example, the rural rollouts that we have in Nigeria, that's not intended to get to 2x. That's really a one plus, you know, part of a colocation as well. It's not quite as simple as that. If we're just talking traditional macro sites, you'd hope that things should get to 2x in five to seven years, depending on the country which we operate. Then in terms of competition for new build sites.
Sorry, Jon. Go on.
No, please go ahead.
In terms of competition for new build sites, again, you know, market by market, somewhere like Brazil is reasonably competitive given the amount of telcos that are in the market, you know, as we're all aware. Some markets less so. You know, where we still continue to get decent volume and decent market share in countries like Nigeria and across our Sub-Saharan African markets. Middle East, you know, Kuwait is a country there we're pretty much the only provider of new build sites. That's sort of competitive now.
Okay. Two more then. First, just on the hybrid solutions and then adding grid connectivity. I know you're gonna talk about that more later. Just in general, anything about the velocity at which you affect those conversions, particularly the on-grid portion, but also hybrid. Anything different that we're seeing now compared to, you know, previous periods? Maybe give us a little bit of a sense of that.
We wanna intensify the usage of these products. Technology has evolved. The efficiency of solar has evolved. The efficiency of lithium-ion, the kind of cycles it can generate versus cost. All these have evolved and we basically have revisited our network across the various geographies, and we realize there are a lot of pockets where we can design particular products that can improve the efficiency of the usage of diesel. That is basically at the essence what we're trying to do. We were trying to reduce our diesel consumption, but definitely in a doable way. That's the essence of the philosophy, Jon.
Lastly, just any quick update on in-building small cells, fiber connectivity, some of your non-macro tower solutions.
We remain one of the biggest DAS players in Brazil across our markets. We remain committed to small cells. We haven't seen a substantial uptick in the rise of usage of small cells in our markets, but we are ready. We feel that it will take some time given that 5G rollout. 5G has just been auctioned in Brazil. 5G spectrum has just been awarded in South Africa. It hasn't happened in Nigeria on a scale yet, on a larger scale. We haven't seen a lot of 5G deployments happening just yet. We feel at the beginning it'll probably be some kind of overlay layer using macro towers before this moves into more small cells and in-building coverage.
That will happen at some point, and we are ready given that our fiber to the home network that we have acquired in Brazil covering 70,000 km of fiber pairs. We're building aggressively in Nigeria. We have a land bank in Brazil that we acquired when we acquired Skysites two years ago. We are ready, but we haven't seen an uptick in the usage of small cells as of now.
I think, Jon, we're still. You know, you've heard me talk about 5G rollouts more, and I think, you know, our base case is still that it's starting to happen in pockets across the different markets, but real commercial rollout we would expect probably end of next year in 2024. I don't think we're changing that view right now. That seems to where we're heading.
Some of our customers in Africa, Jon, are beginning to talk more about faster deployment, but nothing is reflected in our guidance. Until they take concrete steps and make concrete moves, we will stay prudent around that topic.
Thank you very much.
Thanks, Jon.
As a reminder to ask a question, please press star followed by one on your telephone keypad now. Our next question comes from Simon Coles from Barclays. Please go ahead, Simon.
Hi, guys. Thanks for taking the questions. Just dive in a little bit on South Africa. There's obviously lots of potential scenarios that are being talked about in the press. Could you just remind us of sort of the protections you have in your contracts from any potential consolidation risk? If we think about the growth outlook for South Africa, do these conversations between the operators maybe push back some of the colocation growth that you were hoping for, given they're in discussions about various other things, and that's maybe gonna be a little bit of a hurdle for that? Maybe it's too early, but I'll try. On Project Green, how should we think about the scope of this project?
Is it targeting across the whole group, or will you probably start going market by market and maybe starting with some of the smaller markets before maybe moving on to the larger ones like Nigeria? Thank you.
Thanks, Simon. Look, starting with South Africa, we have adequate protections in our contracts. I'm not gonna go into the details of that at the moment, but we do have adequate protection. Having said that, we're all privy and we've kinda highlighted the fact that Telkom and MTN have already announced discussions around the potential mergers. Rain has kinda like raised their hand and said, "What about us? We're a potential candidate." There are also public processes with some of these MNOs trying to sell their towers, which we are involved in at the moment. Look, we will monitor the situation and see how it evolves. To be honest, I do see opportunities in things like that happening.
There are synergies, there are decommissioning opportunities that could improve margins, that could also generate growth with consolidation of this nature. I wouldn't only look at the glass half empty here. There are other positive aspects that could come out of this.
I mean, I would also add, Simon, you know, generally speaking, we get healthier customers.
Right.
Whichever combination you look at, MTN or Telkom and Rain or, you know, versus status quo, it will tend to play out positively in future as well, especially as we get 5G coming in South Africa. We're pretty comfortable at the moment.
I think the important dynamic also in South Africa, Simon, before I move on, that should be kept under close watch is the load shedding situation. The situation with Eskom sadly it doesn't seem to be improving, which means the MNOs, the carriers will need to kinda like pay special attention, special focus to that. Given our expertise, our very deep expertise in managing power in Nigeria, in Ivory Coast, in Cameroon, in various sub-Saharan Africa, we feel we are at the forefront of finding solutions to that problem in South Africa. We and MTN have a deal already to cover up to 13,000 sites. We hope to extend that over time to other carriers. We hope to also extend the coverage or the protection to MTN at even further or deeper levels, if that happens, hopefully not.
A lot of opportunities in South Africa. Fiber to the home is also an opportunity. For us, of course, the fiber to the tower is the key angle. Again, South Africa remains underpenetrated when it comes to covering homes. Massive opportunity that could be considered over time, for an infra build. The opportunities are vast, not only around towers, but there could be also other aspects such as power as a service and/or fiber or other adjacent. Now, in terms of Project Green, the focus is largely on Nigeria at the beginning. I mean, we have 11 countries across our portfolio, 760 million people covered, of course. The Latam situation, Brazil, Colombia, Peru, is not as critical as the African situation. Kuwait is not as critical.
Even within the African geographies, you'll find that Nigeria is the most critical given its size and given its dependence on diesel. 95% of our towers in Nigeria, Simon, do not have grid connection. I mean, that's the size of the problem in a country with 250 million people. I mean, that's the size of the problem. That's the opportunity for us.
Great. Thanks, guys.
Operator, there's no more additional sell-side questions in the queue. I think we'll conclude the call here. We thank you everyone for joining, and this does conclude our call.
Thank you. Thank you all.
That brings us to the end of the IHS Holding Ltd 2Q 2022 earnings results call. Should you have any questions, please contact the investor relations team via the email address, investorrelations@ihstowers.com. The management team thank you for your participation today and wish you a good day.