Good day, and welcome to the IHS Holding Limited Earnings Results Call for the three-month and full year periods ended December 31st, 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 the 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 EVP of Communications here at IHS. With me today are Sam Darwish, our Chairman and CEO, and Steve Howden, our CFO. This morning, we filed our annual report on Form 20-F for the full year ended December 31st, 2022 with the SEC, which can also be found 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 compromises the entirety of the group's operations. First, we apologize for having to reschedule our earnings call to today.
As our announcement noted, it was important that we took the extra time to complete our year-end closing process procedures, particularly relating to the integration of recent acquisitions. Second, and 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 the earnings release in Form 20-F 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 today with the Securities and Exchange Commission and our other filings filed 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 fourth quarter and year-end 2022 earnings results call. We had a strong quarter with 2022 revenue, Adjusted EBITDA and RLFCF all at the high end or above our guidance. The strength was primarily driven by continued secular demand and to a lesser degree, additional power revenue and a $4 million Forex tailwind versus rates previously assumed in guidance. For the year, we generated revenue of $1.961 billion, Adjusted EBITDA of $1.031 billion, and RLFCF of $363 million with organic revenue growth of 19.5%. We are excited to have crossed the $1 billion Adjusted EBITDA mark for the first time ever. We expect this trend to continue, which is reflected in our 2023 guidance that we are introducing today.
I would note guidance includes approximately $40 million of revenue from a one-time cash payment received in the first quarter 2023 from our smallest key customer in Nigeria. This was for services we previously provided to them but had not previously recognized given our revenue recognition policy. Even excluding this payment, though, the midpoint of our revenue guidance implies organic revenue growth of approximately 21%. Skipping to slide seven, I want to discuss some of our key highlights this past year, our first full year as a public company. In 2022, we completed 2 acquisitions, including SP5 in Brazil and the MTN portfolio in South Africa. The SP5 acquisition in March added over 2,100 towers, and we now have nearly 7,000 towers in Brazil, making us the third largest independent tower operator in the country.
As you'll see in our guidance, we expect to triple our BTS program in Latam this year versus last year. We also continued to make good progress building our neutral host fiber business, I-Systems, with the network now passing 7.5 million homes as of the fourth quater 2022, including 4.5 million with fiber. This position is versus the 6.4 million homes and 3.5 million with fiber when we acquired the network from TIM in November 2021. We expect to make further progress in 2023 towards our goal to pass 10 million homes with fiber by the end of 2026. In total, our Latam business generated over $125 million of annualized segment Adjusted EBITDA in the fourth quarter 2022.
In South Africa, our acquisition of the MTN portfolio in May immediately made us the largest independent tower operator in the country. As part of that deal, we also agreed to provide Power Managed Services on an additional approximately 7,100 sites for MTN. Given various dynamics in the market, including an unprecedented level of load shedding that has occurred in the country post-deal close, we may evaluate additional opportunities to provide Power Managed Services and will update you as appropriate if necessary. Both Latam, Brazil, particularly, and South Africa represent two newer markets of scale in our portfolio that provide us outlets for additional growth and opportunities to further diversify our business.
Moving on, in 2022, we took initial steps to help improve stock liquidity, including waiving the registered stock offering requirement for the Block A shares in May, which has helped our trading volumes. With the Block B shares becoming freely tradable in April 2023, and the Block C and D shares becoming freely tradable in October 2023, we believe that volumes may further improve this year, and we continue to evaluate options that we believe will enhance the value of the company. At the same time, we continue to focus on delivering against our publicly stated fundamental objectives and building a track record with investors. During 2022, we also took steps to further strengthen our balance sheet by raising a new three-year bullet term loan at the group level that we used to repay near-term debt, and we extended our group revolving credit facility maturity to 2025.
I'm also pleased to announce today that we've taken additional steps already in 2023 to strengthen the balance sheet by raising a new naira-based five-year term loan and three-year revolving credit facility that we used to repay near term and amortizing naira-based debt. Including our cash position and undrawn debt capacity, we have over $1 billion of capital available, with no meaningful maturities due until Q4 2025. Our treasury team was also busy this past year helping upstream $207 million from Nigeria, including $60 million in December, and we have since upstreamed an additional $15 million in January as part of the same structured transaction. This compares to the $179 million we upstreamed in 2021, despite what has been a more challenging environment.
In our view, this success in upstreaming reflects our strong relationships with our banking partners, as well as the important role our sector plays in the Nigerian economy. Lastly, in October, we announced Project Green, the next phase of our carbon reduction roadmap. Under Project Green, we expect to invest $214 million between 2022 and 2024 to connect more sites to the grid and add more batteries and solar solutions to our towers in six different markets. This, in return, is expected to generate RLFCF savings of $77 million by 2025 and generate an attractive 30% IRR.
As a reminder, as part of our carbon reduction roadmap, we committed to reduce our Scope 1 and Scope 2 GHG emissions intensity per kilowatt by 50% by 2030, which as I've said before, we believe makes smart business sense and helps improve the environment in the communities in which we operate. I'm also pleased to announce that in February, we received an ESG rating by Sustainalytics, which further speaks to our focus and commitment to sustainability. In conclusion, I am very pleased with how we performed in 2022 and the direction our business is heading as we continue to focus on organic growth, executing on Project Green, risk management, ways to strategically enhance the value of our business, and making IHS a place at which our employees are happy and proud to work. With that, I will turn the call over to Steve.
Thanks, Sam. Hello, everyone. Turning to slide nine, as Sam mentioned, we're very pleased with how the business performed in FY 2022 and Q4 2022 against a challenging macro backdrop throughout the year. You'll see on this slide that our main KPIs have all increased by double-digit % in Q4 2022 versus Q4 2021. We again delivered double-digit growth in revenue and Adjusted EBITDA for the year, while the annual RLFCF comparison is impacted by one-time items in each year that I'll discuss shortly. Specifically in Q4, we delivered 27% growth in revenue, 26% growth in Adjusted EBITDA, and 11% growth in recurring levered free cash flow, in each case driven by both organic and inorganic activity across our markets. Our Adjusted EBITDA margin was 51.8%. For the full year, IHS grew revenue by 24% and Adjusted EBITDA by 11%.
RLFCF declined by 11% on a reported basis but was flat excluding the one-time items in each of 2022 and 2021, as we'll address shortly. Our Adjusted EBITDA margin was 52.6% for the year. You'll also see our level of investment in CapEx to grow the business increased by 30% in the fourth quarter and 57% for the year. This is largely due to investment in Project Green, along with increased CapEx relating to I-Systems fiber deployment and network refurbishment on the South African acquisition during the year. Finally, our consolidated net leverage ratio increased to 3.2x at the end of Q4 versus last year following our two acquisitions, but was up slightly versus Q3 2022.
The rescheduling of our results came primarily from the finalization of the complex IFRS 16 lease accounting, in particular in relation to the South African assets we acquired during 2022. An important area of accounting, although not one that has impacted our key metrics of revenue, Adjusted EBITDA, RLFCF or CapEx. Turning to our revenue on a consolidated basis, slide 10 shows the components of our 24.2% reported consolidated revenue growth for the full year 2022. Organic revenue growth of 19.5% for the year was driven primarily by CPI escalations and power-related revenue, as well as Lease Amendments, FX resets, new colocation, and also new sites and fiber deployment. 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 280 basis points.
The level of power-related revenue reflects the high energy price environment throughout the year, driven largely by the knock-on implications of the Russia-Ukraine conflict. [Not] material to revenue in 2022, I would also note that we now include the power pass-through revenue we receive in South Africa within power. On the right, you can see the organic growth rates of each of our segments for the full year, whereas the full year segment details are provided in the appendix. Inorganic growth for FY 2022 was 9.6%, again, primarily reflecting the South African acquisition in Q2 2022, GTS SP5 in Q1 2022, and I-Systems in Q4 2021. Slide 11 shows the components of our 26.6% reported consolidated revenue growth in the fourth quarter.
Organic revenue growth of 23.5% was driven primarily by power-related revenue, CPI escalators, FX resets, lease amendments, new colocation, as well as fiber deployment in new sites. For the fourth quarter, the level of escalations together with FX resets offset the negative FX impact by 90 basis points in this elevated inflationary environment. The contribution from power-related revenue is particularly significant given the energy price environment during the year. The right side again shows the organic growth rates of each of our segments, but for the fourth quarter of 2022, which I'll talk about shortly. Inorganic growth for the fourth quarter was 10.8%, again, reflecting the acquisitions we've spoken about. On slide 12, you can see our consolidated revenue, Adjusted EBITDA and Adjusted EBITDA margins for the fourth quarter and the full year 2022.
In fourth quarter, IHS generated $526 million in reported revenue, a 27% increase versus the fourth quarter of 2021, while organic revenue growth was 23.5%, each demonstrating the continued strong top-line growth trends of the businesses led by Nigeria and Latam in particular. Aggregate inorganic revenue was $45 million, equating to nearly 11% growth during the quarter, reflecting the acquisitions we've discussed. For the full year, we delivered nearly $2 billion of revenue, a 24% increase, while organic revenue increased by 19.5%. Aggregate inorganic revenue was $151 million, equating to 9.6% growth, again, reflecting the acquisitions previously discussed. Power-related revenue also made up a larger portion this year.
Overall, we continue to grow well in line with our stated objective of seeking double-digit revenue growth on an annual basis. Regarding our Adjusted EBITDA and Adjusted EBITDA margins, in the fourth quarter, Adjusted EBITDA of $273 million increased 26% versus the fourth quarter of 2021, and Adjusted EBITDA margin was 51.8%, down 30 basis points from the fourth quarter of 2021. Remember that fourth quarter 2021 was prior to the significant energy price rises we saw throughout 2022. For the full year, Adjusted EBITDA of slightly more than $1 billion increased 11% versus the prior year, and Adjusted EBITDA margin was 52.6%, down from 58.6% in FY 2021.
The year-over-year changes in Adjusted EBITDA and margin for full year 2022 primarily reflect the increase in revenue discussed, partially offset with year-on-year increases in cost of sales, mainly due to higher diesel costs, as well as increased SG&A associated with being a public company for a full year in 2022 versus two months in 2021, and some increased maintenance and repair costs on a larger business. The changes in Adjusted EBITDA also reflect $43 million higher one-time net benefits in FY 2021 versus FY 2022. This means that Adjusted EBITDA would have actually increased by 17% for FY 2022 if the one-time benefits in each year were eliminated.
Power generation cost of sales increased by $152 million, driven by a $147 million diesel increase, primarily due to a 60% increase in the diesel price and a 6.4% increase in consumption in Nigeria. The increased diesel costs in full year 2022 were partially offset by a $77 million increase from diesel-linked revenue year-over-year. I'll discuss this later with respect to our guidance, we have locked in pricing for a significant portion of our diesel needs through September of 2023, something we have highlighted that we were gonna do on our last two calls. As discussed on our recent Project Green announcement in October, we're also increasingly prioritizing alternative sources of power to reduce our dependency on diesel.
On slide 13, we first review our recurring levered free cash flow or RLFCF. We generated RLFCF of $97 million in the fourth quarter, an 11% increase versus fourth quarter 2021 due to a combination of factors, including the increased revenue and Adjusted EBITDA discussed already, offset in part by increase in net interest paid withholding tax and maintenance CapEx. Our RLFCF cash conversion rate was 35.7%. For the full year, we generated RLFCF of $363 million, an almost 11% decrease versus FY 2021, and our RLFCF cash conversion rate was 35.2%, down from 43.8%, with one-time items in each year impacting the comparison.
The year-on-year decrease in RLFCF was driven first by the $43 million one-time higher net benefit to EBITDA in 2021 versus 2022, which dropped straight through to RLFCF. Excluding that non-recurring items in each of 2022 and 2021, our RLFCF would have been flat year-on-year despite the higher energy and interest rate environments during 2022. RLFCF for 2022 was impacted by the increased diesel costs impacting Adjusted EBITDA that we've already talked about, as well as our bond financings at the end of 2021, driving an increase of nearly $59 million in net interest paid for the year. The proceeds of these bond issuances supported our South African and Brazilian acquisitions, which only contributed partially to the year's RLFCF results. We also saw higher floating rate interest in light of the interest rate environment during 2022.
We incurred almost $43 million of additional maintenance CapEx, in part due to owning I-Systems now for a full year versus two months in 2021, as well as nearly $30 million more in corporate income taxes and revenue withholding tax, and $16 million of additional lease and rent payments made versus FY 2021 due to owning a larger business. Turning to CapEx, in the fourth quarter, CapEx of $196 million increased 30% year-on-year, and full year CapEx of $633 million increased 57% versus FY 2021.
The increase in FY 2022 was primarily due to increases in Nigeria in connection with Project Green, on which we spent $104 million during the year, increased CapEx in Latam following a full 12 months of owning I-Systems in the year, and increased CapEx in South Africa in connection with the refurbishment of the portfolio we acquired during 2022. Slide 14 looks at our returns and capital allocation. In FY 2022, we continued to focus on driving our returns and delivered a return on invested capital of 9.9% versus 11% the prior year. Our 2022 ROIC is held down by significant investment in both organic and inorganic growth opportunities during the year, including new site build investment in Nigeria and Latam and further building out I-Systems in Brazil on the organic side.
Regarding the inorganic growth, we closed the MTN South Africa and SP5 acquisitions, but saw only partial contributions in the year from each of these. In terms of capital allocation, you can see that a significant portion of our spend in FY 2022 or $736 million related to that acquisition investment, which as we said, was deployed to enter into South Africa and to build upon our 2020 entry into Latam in each case, furthering our diversification strategy. Moreover, IHS continues to be a leading builder of new sites in our markets, with more than 550 such sites built in Nigeria and more than 250 in Latam, or primarily Brazil, during the year. Turning to the segment review on slide 15 and our first walk through our Nigerian business.
The Nigerian macro situation remains challenging, with the country's sovereign debt rating having been downgraded further in late January. U.S. dollars continue to be difficult to source, although remain available, with FX reserves having decreased to $37.1 billion at the end of 2022 from $38.3 billion in the third quarter of 2022. While the price of oil again slightly moderated [Q-on-Q], it remains elevated versus a year ago. Due to the continued increase in premium we are seeing applied to the importation of refined products like diesel into Nigeria, we continue to believe that the ICE gasoil price is the most relevant indicator of diesel pricing we pay. Looking at ICE gasoil, it was $948 per ton versus $1,012 per ton the prior quarter.
Moving to real GDP growth, it expanded by 3.5% in the fourth quarter, bringing the full year 2022 growth rate to 3.1%, while inflation increased to 21.3% this past December versus 15.6% in December 2021, bringing the full year 2022 average CPI rate to 18.9%. Importantly, on February 25th, Bola Ahmed Tinubu was elected as Nigeria's next president, with his inauguration scheduled for May 29th, and regional elections have also taken place. Looking ahead, we remain cautiously optimistic by these developments, given the statements made by Mr. Tinubu regarding addressing the economic issues facing the country, and we remain in close contact with our key customers, two of which have again recently published healthy top-line results in their businesses.
We also continue to work closely with various regulators, our vendors, and our local banking partners to continue to best position IHS. All said, we believe the business remains well positioned for continued long-term success and to endure the near-term macroeconomic challenges. To this point, our Nigerian business once again delivered strong results in the fourth quarter, tracking well on our key metrics. Q4 2022 revenue of $355 million increased by 18.5% year-on-year on a reported basis and 27% on an organic basis. Top-line growth was driven by the usual group of power-related revenue, escalations, FX resets, Lease Amendments, new colocation, fiber, and new site deployment. The negative FX impact was $26.5 million. Our tower count grew by 0.8% versus Q4 2021, inclusive of some planned decommissioning.
Our total tenant count increased by 2.3% versus the prior period, and our colocation rate was 1.54x, up from 1.52x, in Q4 2021. Lease amendments continue to be a strong driver of growth, with these increasing by 15% year-on-year as our customers added additional equipment to our sites, particularly 4G upgrades. Q4 segment Adjusted EBITDA in Nigeria was $206 million, a 12% increase from a year ago, and segment Adjusted EBITDA margin was 58%. Let me now briefly summarize the results of our other segments. As our sub-Saharan African segment now reflects the inclusion of our South African business, towers and tenants increased substantially versus fourth quarter 2021.
Revenue increased by 34%, of which organic revenue grew 9.2% and inorganic grew 33%, driven by the South African acquisition, and FX was a 7.8% headwind. Segment Adjusted EBITDA increased by 45%, driven primarily by the increased revenue coming from the South Africa acquisition, offset by increases in power generation costs, maintenance and security costs, and some administrative expenses. segment-Adjusted EBITDA margin increased to 56.9% from 52.7% in Q4 2021. In our Latam segment, towers tenants, revenue and segment-Adjusted EBITDA all increased substantially in Q4 2022 due to meaningful inorganic growth, primarily from the GTS SP5 acquisitions, as well as the I-Systems fiber business. In Brazil, our second-largest market with 6,994 towers, macro conditions were relatively stable as FX rates marginally strengthened, interest rates held steady, and inflation decreased.
We also note the recent election of Lula da Silva as President of Brazil. In our Latam segment, overall Q4 2022 organic revenue increased 32%, driven by an increase from I-Systems, CPI escalations, new sites and new colocation, with inorganic revenue increasing by 80% from the acquisitions. There was also a positive 7.4% FX impact. segment-Adjusted EBITDA also more than doubled with a segment-Adjusted EBITDA margin of 71.6%. In MENA, towers grew by 9.2% and tenants by the same in Q4 2022. Revenue grew by 16%, including 15% organic revenue growth and segment-Adjusted EBITDA grew by nearly 20%. In each of these cases, mainly as a result of new sites and the closing of the fifth tranche of the Kuwaiti acquisition in the third quarter of 2022.
Q4 2022 segment-Adjusted EBITDA margin was increased to 46.3%. On to slide 16, briefly to highlight our KPIs. As of December 31, our tower count was 39,652, up by just over 8,600 towers or almost 28% from the end of 2021, driven largely by the acquisitions mentioned, and ongoing new sites in Nigeria, Latam and SSA. As you can see in the chart on the top right, collectively we built nearly 1,200 sites during the year, below our guidance of approximately 1,350, driven primarily by our decision to slow our rural builds in Nigeria as we shift more of our CapEx to Project Green and some timing issues in Latam.
We'll discuss this further when we discuss our guidance, but we expect to further slow our builds in Nigeria in 2023, while we expect to triple our builds in Brazil. Total tenants grew 26% year- on- year, with the colocation rate at 1.48x down 0.02x versus last year, but up slightly from the third quarter. We continue to point out that Lease Amendments, which are a significant factor in our Nigerian segment, are not included in our colocation rate calculation. Moreover, as a significant acquirer and builder of towers, we typically add to the denominator period on period, even as we continue to lease up our portfolio.
We continue to see no reason why we can't get to 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 almost 17% year-on-year as our customers added equipment to their sites, particularly 4G upgrades in Nigeria. We are starting to see some small 5G activity in Nigeria, which is early days but very encouraging. On slide 17, we look at our capital structure and related items. At December 31, 2022, we had approximately $3.95 billion of external debt and IFRS 16 lease liabilities.
Of the $3.95 billion of debt, $1.94 billion represents our bond financings, and other indebtedness includes $370 million that we drew down from the $600 million three-year bullet term loan at IHS Holding Limited level that we entered into in October. That $370 million drawdown was used to repay $280 million of bridge loan that we had and the $76 million USD tranche of the Nigerian senior credit facilities. You will see those Nigerian senior credit facilities drop from $298 million in Q3 to $191 million in Q4 2022.
In the fourth quarter, we saw a small rise in IFRS 16 lease liabilities contained within other indebtedness on slide 17 from the work that we've been doing on our South African leases. Not reflected in our indebtedness as it remains undrawn, but we also extended the maturity of our $270 million group revolving credit facility out to 2025, as we announced in November. Additionally and subsequent to these numbers in January 2023, we entered into an up to NGN 165 billion five-year term loan and an up to NGN 55 billion thre-year revolving credit facility in Nigeria. In connection, we repaid NGN 114 billion of our two Nigerian local currency facilities, removing significant 2023 amortization. The Nigeria RCF remains undrawn.
As you can imagine, we are very pleased to have completed these transactions, including the October bullet term loan, group RCF extension, and the January 2023 Nigerian refinancings, which further de-risked the balance sheet and increased our financial flexibility, particularly in light of the tough financing conditions that remain across the globe. We continue to believe this successful outcome is a testament to the strengths of our cash flows, our contracts and our history in the credit markets, as well as our relationships with our global banking partners.
Cash and cash equivalents decreased slightly to $514 million at December 31, and in terms of where that cash is held, approximately 6% of the total cash was held in NGN at our Nigerian business, as we have been using excess cash to support Project Green and for upstreaming. Most of the remaining cash was held in U.S. dollars at the group level, and as Sam mentioned earlier, in 2022, we upstreamed a total of $207 million from Nigeria at an average rate of approximately NGN 550 versus $179 million at a rate of approximately NGN 490 in 2021. We've just upstreamed another $15 million in January of this year.
One further point to make is that IHS does not have any relationship with Silicon Valley Bank, any other U.S. regional banks or Credit Suisse. From all of these moving elements, at the end of Q4 2022, our consolidated net leverage was approximately $3.4 billion, with a consolidated net leverage ratio of 3.2x, up slightly from September. This is at the low end of our net leverage target range of 3 to 4x and further demonstrates our strong balance sheet. You'll see that as of December 31, 78% of our debt was linked to hard currencies with a fixed floating ratio of 65%-35%. Our weighted average cost of debt was 8.6%. Moving to slide 18, we're introducing 2023 guidance.
That includes revenue in the range of $2.19 billion-$2.22 billion, Adjusted EBITDA in the range of $1.2 billion-$1.22 billion, RLFCF in the range of $430 million-$450 million, and total CapEx in the range of $610 million-$650 million. As Sam mentioned, guidance includes an approximate $40 million of revenue from a one-time cash payment received in the first quarter from our smallest key customer in Nigeria. This was for services we previously provided to them, but had not previously recognized given our revenue recognition policy. However, even excluding this payment, the midpoint of our revenue guidance implies organic revenue growth of approximately 21%.
Guidance also includes approximately $25 million in power pass-through revenue in South Africa compared to $2 million this past year as we work with MTN to move various utility billing arrangements under our name. I do want to caution that timing of such moves is difficult to predict and could be delayed relative to what we've assumed, although this would have no impact on Adjusted EBITDA or RLFCF. Total CapEx guidance for 2023 includes approximately $30 million that we had expected to spend in 2022, but for timing reasons, has shifted into this year.
CapEx also includes $90 million-$100 million for Project Green, which includes our initial $82 million forecast, plus a $6 million carryover from 2022 and upwards of approximately $10 million to potentially pull forward CapEx we would otherwise spend in 2024 as our overall projections for CapEx savings and returns remain unchanged. I also want to point out again that we have locked in pricing for a significant portion of our diesel needs in Nigeria through September 2023, which in turn will provide greater visibility to our costs. For the year, we expect to build approximately 1,200 towers, which is just slightly more than the amount we built in 2022.
As I already mentioned, this includes a notable drop in Nigeria as we pull back on new site builds as we shift our focus to Project Green, but also includes a tripling of towers in Brazil. I also want to point out that in Nigeria, we expect to rationalize approximately 750 towers this year that are occupied by our smallest key customer. This will not have an impact on revenue but will reduce our operating costs and hence is beneficial to IHS. On slide 19, on top you can see revenue by reporting currency for fourth quarter and the full year, 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.
Finally, on slide 20, we provided the estimated full year financial impact a theoretical 10% devaluation in the naira would have on our financials. While our 2023 guidance already assumes a devaluation from approximately 461 today to 530 by the end of 2023 and an average 500 for the full year, we've shown here the impact of a 10% devaluation beyond what we've assumed in guidance. For example, the figures in the middle of the page, including the $47 million impact to revenue, provide a sense of what the 12-month run rate impact would be using our 2023 expectations.
However, as you'll see on the right side, the illustration in the middle of the page excludes an incremental approximately $20 million impact that would occur in the quarter the devaluation actually happens, assuming the devaluation was to occur on the first day of a quarter. This represents the maximum lag that would occur between the devaluation and when most of our FX resets would start to kick in the next quarter. As a reminder, the vast majority of our resets are either quarterly or monthly. Overall, we feel we are well positioned to absorb a potential devaluation and believe that in the longer run, such an event would be positive for the country and for us. This 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.
Thank you, as a reminder to those on the phones, press star one to raise your hand. We will now pause briefly while we register questions in the Q&A roster. Your first question comes from the line of Philip Cusick from J.P. Morgan. Your line is open.
Hi, guys. Thank you. I wanna follow up on some of the things you talked about in Nigeria. Maybe you can just expand, Sam, on what you're seeing since the election, you know, any feel for how things might change over the next year? Maybe start with that.
Morning Phil, I think the past government has been a government of largely standstill. The government has been told they know the decisions or the things that they need to take in order to unlock the massive potential that Nigeria has. We are extremely encouraged by the fact that the candidates towards one have clearly indicated that he will remove the subsidies on petrol, which is basically eating up the budget, the government budget. He said that he will merge the Forex rates, which we believe is a substantial hindrance to foreign investments. He has said also explicitly that he is going to improve or increase the production of oil in the oil region. So the statements, the policy, the direction is clear.
Let's just hope they implement. We are cautiously optimistic about the future of Nigeria, especially in the short and medium term.
Okay. You talked about the $40 million in cash that you got from your smallest Nigeria customer in I think it was January. How much is still owed on that? Is there anything in your guidance for further payments this year?
Steve?
I'll take that. Yeah, I'll take that one if you want. Hi, Phil. We don't typically disclose what is or isn't due by customer, but consider that as a payment against past dues, which we've now received in Q1. Our guidance does not assume for 2023 that we will receive any other lump sum payments other than what we would normally expect to receive each month.
Okay. Can you talk about the 5G launch by Airtel that's coming in Nigeria? How big an opportunity is that? Is there any sort of inflection there, or you think it's just steady?
Actually, not only Airtel has started the 5G implementation process. Our various carriers in our various countries have started some kind of 5G commercial launch. We think over the next 30, 24 to 36 months, we're gonna see substantial movement and substantial ramp up of 5G activities in our market. All three main markets.
Do you think that shifts the pace of revenue growth or it just sustains what you've been seeing anyway?
I'll leave that to Steve.
Yeah. I think, I think it supports what we've been seeing over the prior, you know, number of years. What's been really helping to drive our revenue growth has been Lease Amendments, which is where 5G will typically help us realize some of that future growth, particularly across the key markets in Nigeria, South Africa and Brazil. I think as we all know, 5G will bring new types of technology and new solutions, but, you know, we're looking forward to more sustained Lease Amendment growth as we get, you know, deeper into that rollout cycle. As we said, you know, a few moments ago, we're early, we're very early in that, so don't want to get too carried away. You know, we are now starting to see operators put 5G equipment on sites, which is really positive.
Got it. Last one for me is slowing.
All our major operators, Phil, have now fully operated. All our major operators have now access to 5G spectrum that has been allocated.
Okay. Okay, thank you. The last one for me is slowing builds, BTS builds in Nigeria, is that more a function of demand slowing or your desire to build in Nigeria relative to other markets?
It's the latter, Phil, plus desire to build in Nigeria relative to other investment opportunities like Project Green, which we're, as you know, very firmly behind and we believe that's a great use of capital. A bit to do with other markets and a bit to do with diversing capital to Project Green.
Great. Thanks very much, guys.
Your next question comes from the line of Michael Rollins from Citi. Your line is open.
Thanks, good morning. I'm curious, in the past, you know, you've mentioned the consideration of some actions to try to improve value for shareholders. Curious if you can give us an update on what the company may be considering and how you see opportunities on that front. Secondly, in terms of the organic revenue growth guidance for 2023, can you unpack some of the important pieces to get to that growth figure that you described in terms of how much might be coming from escalation, new Colo Amendments, some of that internal activity that contributes to the total? Thank you.
Sure. Hi, Mike. In terms of your first question, on shareholder value unlock, as you know, it remains a topic that we continue to debate all the time on our side. Clearly, the markets remain volatile and, you know, we have to keep looking to see whether there are conducive opportunities for us to do things. We continue to discuss that with the board and, you know, that will remain. As we mentioned in the call, we have a couple of milestones this year in terms of shareholder unblocks coming. We are continuing to monitor that, and we will do so through the course of this year and be ready to act if we think there's an opportunity for us to help unlock shareholder value.
As you know, we're committed to, you know, continuing to deliver the results of the business. We think this is a good performance that we're putting through here in terms of Q4 and the full year for last year and a good solid guidance as well for 2023. Hopefully people are, you know, starting to build that track record with us over a number of courses of performance delivery. In terms of the organic growth for 2023, as you know, we don't we don't split out the different building blocks of the guidance, other than to say, you know, we're we're putting forward 23% organic guidance, organic growth here in the guidance at the midpoint of the range.
It's actually 21% if you back out that one-time item, that we mentioned in terms of Q1. The only other thing I would say is, I would expect CPI to be a higher block than it has been in 2023, given the inflationary environment that we all know we're in. Some of the other blocks I would expect to see similar sorts of shapes, other than maybe power, I would expect to moderate slightly.
Just one other question on that. For power, is that power change roughly offset by the cost? If your power and energy costs eventually come down, does that go from being a tailwind to a headwind that we just should consider for the future?
Headwind in terms of revenue, not headwind in terms of overall profitability, right? Because that block moves in tandem with our cost of sale, i.e., diesel or electricity as the case may be. What we were showing in the course of FY 2022 was we had $147 million of diesel spend and $77 million of diesel-related pass-through revenue. We were roughly 40% covered in terms of the cost that we incurred. That's pass-through. If that diesel cost starts to drop, yes, the diesel revenue will drop, but so will our cost base.
That's helpful. Thanks very much.
The next question comes from the line of Gregory Williams from TD Cowen. Your line is open.
Great. Thanks for taking my questions. I know you mentioned you're not splitting organic growth out, I was wondering if you'd help us at least with organic growth by region, just on a directional level. Should we expect similar trends we saw in the fourth quarter, you know, Nigeria in the high 20s, et cetera? Second question is just on the M&A landscape. You've noted in the past, you know, private multiples remain high and you're taking your time to focus on the balance sheet, which you've done a great job in the last few months doing so. Just hoping you can provide an update on the landscape and your expectations of the environment in 2023. I understand it's fluid and difficult to do so, your insights would be appreciated. Thanks.
Let's start off with the second one. In terms of the first one on organic growth, there isn't too much more we can add. I think 2022 is a reasonable shape in terms of what you'd expect to see going forward. The only one I would caution slightly is Latam, which in 2022 was calculated off a small base in 2021. That will moderate slightly in 2023 in terms of growth, percentage terms. Sorry to not be a bit more helpful there, but that's what we disclosed.
Regarding the second question, I think it's important to note again that our priority for this year remains basically to focus on the core, while of course keeping an eye on the future. When I say focus on the core, double- digits top line growth, balance sheet, which you've rightfully mentioned, we've done a lot of measures to kinda like shift most of the maturities further down the road. Project Green, of course reducing OpEx and CapEx. Now having said that, we are in a very healthy position at the moment. Our leverage remains at around 3.2x , which is at the lower end of our indicated range and much lower than most of our peers.
We have roughly $1 billion or more of dry powder. We are in good spot to be able to look into the future. Having said that, we will only consider at the moment projects that could generate outside risk-adjusted returns and are strategically spot on. For example, you may have noticed that in Brazil, for example, we expect to triple the number of BTSs this year versus last year. I mean, this is the kind of thing that we like. Project Green. If an M&A project presents itself that fits these criteria, we will definitely consider it.
Great. Thank you.
Your next question comes from the line of Brett Feldman from Goldman Sachs. Your line is open.
Thanks. I'll follow up with something that Sam just mentioned. You reiterated the intent to significantly accelerate the pace of new builds in Brazil. The question is, who are you building for? What's driving that? I would assume you have an anchor tenant in all these towers. I guess the real question would be, how much visibility do you have into lease-up beyond the anchor tenants that you're building for? With regards to the upstreaming that you've been doing at Nigeria, you've obviously been very successful there. How are you thinking about the intent or need to continue that pace of upstreaming this year, particularly as you ramp Project Green? I'm wondering if there's a desire to actually keep more of the cash in the country. Thank you.
Hi, Brett. I'll take the first question while Steve takes the second question. Look, we continue to work with the various operators in Brazil. We have a very good relationship with Telecom Italia, given the partnership we have done with them, and then the massive support we're providing on fiber. We work with Claro, we work with Vivo. Our BTS project in Brazil is largely driven by the fact that that country needs to still expand its infrastructure network, and it's moving into 5G. We are extremely positive about that. Or actually most of what we're talking about are in the pipeline already.
These are projected BTS' that will happen, and you'll see them coming through quarter after quarter.
Steve?
Then on the second question, Brett, in terms of Nigeria and upstream, I mean, just keep in mind the cash proceeds or the use of cash, if you like, for Project Green, we spent $104 million in 2022 on Project Green. That was in Nigeria. We're expecting to spend $90 million-$100 million in 2023. Again, most of that will be in Nigeria. The CapEx investment between the two years is not that dissimilar from a Nigerian perspective. Why am I saying all that? We are obviously prioritizing cash into that project, as I said before. We will look to continue upstreaming from Nigeria.
$207 million last year was a really good result. It was higher than the $179 odd million we did for the prior year. We will continue to keep sourcing FX if we think it's at an appropriate price.
Got it. Thank you.
May I add, we also did $15 million of upstreaming in January, that process remains moving.
Thank you.
Before we continue to our next question, just a reminder to those on the phones, press star one to join the Q&A roster. Your next question comes from the line of Eric Luebchow from Wells Fargo. Your line is open.
Great. Thanks for taking the question. Just curious on your BTS program or really any other investments. I mean, I wanted to talk about what type of unlevered returns, you know, you're underwriting on those site builds. Have those hurdle rates changed at all just based on the elevated interest rate environment we're in?
We've historically provided some ballpark guidance in terms of BTS returns around the group. I will say this is, you know, across the entire IHS group. These do range a little bit from region to region, country to country. We've typically guided people to a 10%-11% type return on a 1-tenant tower, getting up to the low 20% returns on a 2-tenant tower. In terms of how that's changed in the past year, they are still broadly in line with that, possibly a percent or so off, given things like higher energy prices, which affect our African businesses, but not necessarily our other parts of the geographies like Latam.
Those returns are still ballpark and what we would expect to receive.
Okay, great. That's helpful. I guess just one last one. On leverage, I know you're at the low end of your leverage target and, based on the strong EBITDA growth this year, I mean, do you expect in this environment maybe to go below the low end or, you know, as you look at incremental investment opportunities, M&A, buybacks, how are you thinking about managing, you know, leverage in the current environment versus, you know, returns from an incremental investment?
Yeah. I'm expecting to stay at the low end of the range during the course of 2023. That depends largely on what happens in terms of things like devaluation of currencies, et cetera, although we still remain comfortable even in those scenarios. M&A, as Sam Darwish said, look, we will continue to remain prudent. You know, we're in an environment where access and cost of financing is not what it was. We're very mindful of those dynamics. It depends what comes along in terms of something strategically important to help the diversification push. Base case, I would think we'll stay, you know, at the low end of the range through 2023.
Okay, great. Thank you.
Your next question comes from the line of Stella Crutcher from Barclays. Your line is open.
Hi there. Afternoon. Many thanks for all the updates. There's two things I wanted to ask, please. The first is on South Africa in general. I mean, there's clearly some major stress on the power network there at the moment. I just wondered if you could tell us a bit more about what you've been working on there, in terms of offering, you know, different sort of power sources to your own fleet, but also to that of MTN as well. The second thing I wanted to ask was, if you in the slide, when you were talking about upstreaming, you talked about a structured transaction for the last two cash flows. Just wonder what you meant specifically by that.
Finally, just on the leases, so you did talk about the lease accounting, and I saw that the leases moved up quarter-on-quarter. I just wanted to ask what the reason for that was. That would be great.
I'll take the first one, and Steve can cover the remaining two. Thanks, Stella. Look, as you rightly noted, the level of load shedding in South Africa has sadly deteriorated or has escalated since we completed the deal last year. Such, the need for Power Managed Services, like the expertise we provide in Nigeria and other countries is at the moment greater.
We need to make sure, however, that whatever we do, it does receive the proper economics while putting our knowledge and experience in Nigeria, which is unique in a way, into helping our customers. We are actively in dialogue with everyone at the moment, trying to see what is it that they wanna do. I mean, we will be happy to provide the service that they require. That's an ongoing discussion. I mean, the operators need to also make a decision on the future of Eskom. Is it gonna improve? Is it gonna deteriorate further? Those are major decisions that the operators will have to take at the moment, but we remain ready to support them.
Then sort of in terms of your questions on the upstream, structured transaction, is really just to note that the $15 million we upstreamed in January was part of the same $60 million transaction that we affected in December. $6 million went up in December, $15 million went up in January. It's part of the same overall upstreaming effort. Then on the lease counting in South Africa, we inherited many thousands of leases in relation to the portfolio of assets we acquired from MTN in South Africa during the course of 2022. Those leases are pretty complex and pretty varying in nature.
The process of getting through those, reviewing, critiquing, and then making sure we're recording them properly, in our, in our lease register and therefore balance sheet, was the process that took some time.
That's great. Many thanks.
That brings us to the end of the IHS Holding Limited fourth quarter and full year 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.