IHS Holding Limited (IHS) Earnings Call Transcript & Summary

SP1 Okay. Great. I think we're going to get started. I'm Batya Levi with the Communications Infrastructure team at UBS. Our next speaker is Colby Synesael, SVP of Communications from IHS. Colby, thank you so much for joining us.

I'm glad to here.

Great. So I thought that maybe we would just start off with the ones less familiar with your company, if you could provide an overview of the assets, your geographic mix and how you think you're positioned in the markets that you operate?

Sure. So for those who aren't familiar with IHS, we're a relatively new listing on the New York Stock Exchange, having IPO-ed in October of last year. But the company has been around for a much longer time period. So the company has actually founded in 2001. And spent the first 10 years of its existence, give or take, as actually a Manager and Operator of other towers on behalf of the -- our MNO customers. The company was founded by 3 gentlemen, which are all part of the management team today. Sam Darwish, who is our CEO; his brother Mo Darwish, who is our CEO of Nigeria; and William Saad, who's our COO. Those 3 gentlemen came to Nigeria, they're actually Lebanese in terms of decent, but they got moved to Nigeria back in 2001 for work purposes and basically discovered the tower business. And ultimately, as I just mentioned, managed those towers for the first 10 or 11 years on behalf of our customers. Somewhere around 2011, 2012, the company got the opportunity to start owning those assets. Our first asset purchase was in Nigeria. And really over the next, I'd say, it's up until 2020 spend time expanding into other markets within Africa. Today, we're in 7 different countries in Africa. Nigeria is our largest market. We're also in Cameroon, Côte d'Ivoire, we are in Zambia. We are also in Rwanda, and more recently in Egypt and in South Africa. Then in 2020, I mean natural business would be thanks to do, start to focus more on geographical diversification. The company went into Kuwait. So we're now in the Middle East. And we went into LatAm, specifically Brazil, Colombia and Peru. Colombia and Peru are relatively small markets. Those towers came with some larger transactions that were focused more on Brazil. But nonetheless, we're in all 3 of those countries. When you bring it all together, today, the company is in 11 countries across Africa, the Middle East and LatAm. We have just under 40,000 towers. We are the third largest multinational independent tower companies. And we are the #1 tower operator in terms of number of towers in each of our countries in Africa. We are the third largest tower operator between American -- behind American Tower and SBA in Brazil. And then in Kuwait, we're also the #1 provider. We're obviously much smaller in Colombia and Brazil -- Colombia and Peru.

That's great. That's a great overview. And you've been public in the -- you went public in the last year. So maybe as we -- coming to the end of '22 as we look out to the year ahead, what should we expect from you in terms of your strategic focus and top priorities?

So when the company IPO-ed, we sat down and we say today that we have a desire to sustain double-digit top line growth. The beauty of our markets is that they're behind that of developed markets in terms of subscriber penetration, smartphone penetration, data traffic growth, et cetera. And therefore, there's more revenue to be had by being behind in those trends. So we certainly would expect that to be the case just to give some context this year. We've guided to grow 17% year-over-year organically and I certainly would hope to see solid numbers again next year. The other thing just to be mindful of is that the way that power works, I know we'll talk more about this is that a lot of our sites are powered by diesel given that either the grid is either not available or unreliable. A lot of our markets, just over 50% of our total towers are connected to the grid men are purely off the grid. And for our largest customer in Nigeria, we actually do own the cost of power. So whether or not oil is $150 a barrel or $50 a barrel, it really doesn't change how much revenue that customer gives to us. And you can appreciate that in this year, we saw a headwind to our margins and to our profitability, given where the cost of oil has gone more specifically the cost of diesel. As we go into 2023, I think just looking at the various forecasts that are out there for diesel specifically, we would expect that to really be much more stable in 2023 and therefore, not be the headwind to our financials as it was in 2022. That should allow us to see better profitability in the business, both as it relates to EBITDA and RLFCF, which is effectively our AFFO type metric.

Got it. And the macro backdrop has been challenging with higher inflation, maybe some of the carriers finding a little bit more difficulty in is building out these networks. Can you talk about what you're seeing from your tenants in terms of activity levels? And maybe anything to highlight any issues in terms of collections or higher costs?

Sure. So in our earnings deck that we put out, we list all of our key customers. So you could actually go and look at the appendix and see who our customers actually are. But what you'll find is that our largest customer, MTN and Airtel and those are publicly traded companies, and they have debt profiles that are either investment-grade or close to it. And those businesses have been doing extremely well. From an overall revenue growth perspective, they're growing double digits. If you look at their data revenues, they're growing closer to 50% on year-over-year. So our customers have been very healthy. When you go across the pond, if you will, to LatAm, we have TIM Brasil, which is our largest customer there, but then we also have exposure to Telefónica and América Móvil. We actually don't have any real meaningful exposure to Oi. So whereas you're seeing from some of our comps more messaging of churn in 2023, from that situation, that's not something our business is experiencing. And then going back over again to Africa, the 1 customer -- I would flag who's been the challenge is 9mobile. So 9mobile is the fourth largest MNO in Nigeria. They are 3% of our revenues as of the last quarter. They have their private company. They have been challenged. And as a result of that, we're recognizing a subset of their actual revenues to which they owe us on a given quarter. So we've already taken that adjustment. And from that perspective, I'd say it's more stable, but that is the 1 customer who has been more of a challenge over the last year.

You took a reserve?

We did.

Okay. And are they current with ongoing payments?

Yes. So in terms of what we're recognizing in our revenues, which I think if you take that 3%, I want to say it's like low double digits in terms of millions of dollars per quarter. They are paying us what we're writing.

Okay. Got it. And is there anybody else to think about in Africa because your peers also talk about a bit of higher churn coming from Africa, maybe some consolidation, some networks going to more of a -- so riding on others, is there anybody else that we should think about?

I mean the only other customers is of meaningful size is Orange. Nothing really to report there. There's certainly no one else that we've been referencing in South Africa. We just entered that market earlier this year. We bought roughly 6,000 towers from MTN. So MTN, as we just discussed, is fine. We are looking to do more with the likes of telecom and Voda and Rain and so forth, but none of those are material and meaningful customers of ours today on that portfolio, so nothing to flag there either.

Got it. So maybe to step back and kind of discuss your tower portfolio a little bit. And maybe we start with Africa in terms of you're the leader in almost all the markets you operate in, all of them actually in Africa. And what kind of benefits does that should provide to you? And is there any stat that you would like to share in terms of maybe number of tenants per tower contracts. I think investors are pretty used to the terms that we've seen in the U.S., but anything that you would like to highlight for your portfolio in Africa.

So I mean I don't think we're embarrassed to say that we tried to replicate the model that was already established in the United States with the likes of the Americans and the crowns and the SPs of this world. So what does that actually mean? I mean we typically have similar contract terms. So our terms are typically 10 years to start. That was, for example, what we just did with MTN in South Africa. We have escalators built into all of our contracts. The difference there would be though that some of our escalators are based off of a hard currency escalator where some are local. So we have what we produce FX resets on roughly 50% of our revenues, where while we get paid in local currency to the extent that there is a deval to the hard currency is based off of the U.S. dollar being an example, they would effectively owe us more local currency to make up for that deal, and that's the structure of 50%. And that 50% of our revenues then those contracts escalate at the hard currency CPI so that U.S. CPI. And then for the remaining 50% of our revenues, they escalate at the local currency CPI, which is as we all could appreciate is much higher than it would be for the hard currency. I said, beyond that, we do get paid for amendments and everything else of that nature. And then the model really does look and feel a lot more similar to what you would expect in the U.S. other than as I mentioned, that a diesel dynamic, which is, again, more specific to our 1 customer in Nigeria. For all of our other customers across Africa, the way that power -- we get paid and power we reverted power indexation clauses. And that is slightly different than power pass-through. Effectively, if you could kind of think it was more function like, meaning that if diesel is above a certain price point, we have the right thing to go back to the customer and ask them to pay more money to account for that. And we factor our diesel costs. If you look at our diesel costs and our model, which we do disclose, we also disclosed our diesel revenues tied to the power indexation, and it's roughly 1/3 of the revenue -- 1/3 of the cost is reflected in the revenue. I think beyond that, the other thing I would just kind of encourage people to be thinking about is we get a lot of questions around our ability to upstream the local currency that we recognize in each of our countries, particularly Nigeria, into U.S. dollars. And if you look at companies like Emirates, the airlines, they've had some struggles. They've talked about that in the press about getting money out of Nigeria. And the 1 thing I would just mention is that we are a telecom company in Nigeria, where Nigeria founding, we were founded in Nigeria. We're in the telecom industry, which is perceived as an important industry in Nigeria. And we have strong relationships there, and we've had success through the years, both through the ups and downs in terms of our ability to upstream. And even thus far in 2022, we've already upstreamed $147 million. So that's 1 other factor that people get concerned about, but I could at least tell you that even in what has been a challenging macro environment for Nigeria in 2022, we have been successful in being able to upstream.

And when a competitor like American Tower enters the country, what type of changes do you see in terms of carrier activity or churn or any increased competition from your peers?

Yes, there really hasn't been much change in terms of the tower competitive landscape in our markets over the more recent years. So nothing I could say that come to mind that would suggest that when a new tower operator comes into the market, what might change. I would say that we just went into South Africa. So we're new to that market. And I would say that from that perspective, we're being more aggressive as you might appreciate, owning those towers opposed to an MTN did in terms of trying to go after Voda or Telkom or Rain in terms of trying to convince them to come on to some of our towers, that I guess, presumably create some level of competition in that market that didn't exist before, but I don't think that, that's abnormal from what 1 would expect.

What stage are we in, in terms of carrier network deployment in Nigeria? And what kind of growth do you see there?

So the 1 thing, and we -- again, going back to the appendix in our earnings disclosures, we do kind of reference all these different metrics. But when you look at smartphone penetration, for example, whether it's in Nigeria or it's in South Africa or really across the African continent. You're going to find [Technical Difficulty] penetration rates that are much lower, I think, in Nigeria at [indiscernible] Today. And also the other thing to keep in mind is when you look at the demographics, in the countries to which we're in a few different things come to mind as well. One is, you're typically seeing higher population growth. In Nigeria, you're seeing roughly 2% population growth, which in the United States is less than 1%. And the median age is somewhere in the mid-20s, also much younger demographic. And a combination of those 2 things leads to significant growth for the carriers. If you were to look at MT in Nigeria in terms of their revenue growth and their profitability. And you should think about it as an indirect corollary of that as well given our business because of the need to build out the infrastructure to support that demand.

I think American Tower talks about high single-digit growth in overall Africa. How does that compare to you?

Yes, we're seeing significantly higher than that. So for this year, as I mentioned, we're modeling -- or we've guided, I should say, to 17% organic growth. And I would point out that, that number excludes the FX headwind, which is, I think, roughly 6%, if I remember correctly, in our most recent quarter. And it does include new sites, which I know some people don't include in their calculations. And we disclosed that as well. So if you wanted to back that out, you're more than welcome to do so. But 17%. I'd also point out the way that we break out our revenues as we think about them as Nigeria, just given how big it is as a stand-alone, we do break that out separately. And then we put all of our other remaining SSA countries into 1 group. We put Kuwait -- sorry, Egypt in our MENA segment. And when you look at our growth in those categories, we saw in the most recent quarter that we grew Nigeria in the high 20s on an organic basis. That did include a onetime benefit. If you were to strip that out, it's probably in the low 20s. And then when you look at LatAm, we're growing north of 30% in that market. And then when you look at SSA, that in Italy is a bit more of a mature market that was growing in the low single digits. South Africa, we said should be growing in the high single digits. So that should be accretive to our growth rates going forward in SSA, but that is a more mature market when you think of Cameroon, Cote d'Ivoire, Zambia and Rwanda.

When you break down those organic growth rates for -- you mentioned CPI escalation, what is kind of like a churn number across these regions? And then how do we get to those double-digit growth rate? So what kind of colo amendment activity do you see?

Yes. I would say when you think about our business right now, that 17%, admittedly, there's a part of that, that's what I refer to our indexation revenues, which you can think more as a pass-through, but none less that is being included. When you think about the other core components, there's the FX reset dynamic, there's the CPI escalator dynamic. And then there's the good old fashion blocking and tackling of a tower business. There's the new colo, there's the new sites and then there's the amendments. I would say that as it relates to the CPI-based escalators and the FX rates, that's mid-single digits on a combined basis, it effectively offsets the FX headwind, which is what you would want to have seen, it's slightly net positive. And then the remainder of the growth comes almost equally roughly 2% each when you think about new colo, new sets and amendments. So that would get you another incremental 6% plus the 6%, if you want, from the FX resets and EPS, that's 12% and then the other things like our indexation or that onetime benefit that I referenced to you would get you into the mid-teens, which is what we referenced.

In terms of passing energy cost management and passing through the higher power cost, is that one-to-one? Or is there -- could you see a delay in any of the regions?

So from the power indexation requirement, it can be slightly delayed as we effectively have to then go back to that customer and makes a point that our -- obviously, like I'm going in and out. It's that our prices have gone up in terms of our diesel expenses. And then subsequently, we have a right based on the contract structure to pass that on that could result in maybe upwards of a 1 quarter delay. And I'd point out that even for the fourth quarter on our earnings call, we referenced that we could actually end up being above our revenue guidance range for the fourth -- really for the full year, but obviously, just the fourth quarter at this point based on the fact that we might see more power indexation coming through in the fourth quarter than what we had guided to.

Got it. Can we talk a little bit about energy cost management also and sort of your ability to get power to these sites? And what are some initiatives and maybe you can touch about your projects within that context?

Yes. So unlike a U.S.-based power operator, let's just use American Tower, they go and they build a site in Westchester County, just up the road here. They would just plug it into the grid. And for the most part, that tower kind of just runs on its own. That's always the beauty of the tower model. In our markets and even more so in Africa, there's absolutely an operational skill set that's required to maintain and manage these towers. As I mentioned, roughly 50% are not even connected to the grid. So how do you go about powering those sites is really our responsibility. And it's a combination of diesel generators, which is the old tried and true. But then increasingly, how do you add green solutions into your solution set. I'd point out that we do have batteries, we do have solar again, we break these disclosures out as well in terms of percentage of towers that have exposure to those things. But how we bounce all those things is a skill set. And it goes back to the founding of our company. The first 10 years, all we did was manage and operate towers in Africa and even more so in Nigeria, which is arguably 1 of the most challenging markets to probably do so. So that is absolutely 1 of the skill sets and differentiators that we bring as a company. And by the way, I would actually argue as part of what's allowed us to win certain towers during M&A transactions, such as MTN in South Africa because we do have that skill set, and I think there is a certain comfort that our customers have entrusting us to do those things. I would say that as part of Project Green and what you just referenced, we did just announce a new carbon reduction road map. And as part of that Project Green, what we effectively said is that over the next 3 years, we're going to spend $200 million and $14 million between '22, '23 and '24, the majority in 2022. And with that, we're going to do 3 things. We're going to add more batteries. We're going to add more solar. We're also going to actually connect some sites to the grid that weren't previously connected to the grid that now we think will be a good solution. And it's really focusing on 6 different markets, including Nigeria, which is overwhelmingly where the investment is going to go, and that's expected to translate into $77 million of RLFCF go-forward savings starting in 2025. And that translates into a 30% IRR on the project. So a very attractive use of our capital. And quite honestly, the glass half full, glass half empty is because we own a material portion of our diesel costs, particularly in Nigeria. When we do something like this, we have significant savings. So certainly a benefit there. And then the other argument or benefit here is the carbon reduction dynamic as well. And from that perspective, we noted at the time we announced this, which was on October 24, that we expect to reduce our GHG emissions per kilowatt, so unit metric by 23.5% by 2026. And by 2030, we expect to reduce our GHG emissions per kilowatt by 50%. So that's also a very important part. And I would just take the time to give a quick plug, which is we've had our sustainability report out for the last 4 years. We've one out sustainability is a very important part of IHS' culture. Last year, we gave roughly around $7 million away to various NGOs and partnerships across the countries which we operate in. And our CEO is fond of saying that you can't actually be a contributor to these countries in terms of being a business without actually giving back to these countries, and that's also a very important part of who we are. And Project Green fits really right within that as well, just from an environmental perspective.

And the budget that you mentioned I think, $214 million.

Yes.

The peak was spent this year. It's going to kind of trend lower.

Yes. So we're going to spend $110 million in 2022. We're going to spend just over $80 million per our guidance in 2023 and then the remainder in 2024 to be in a position to see the full run rate base benefit in 2025. I'd say that, that being funded from debt in our current balance sheet. We have just over $500 million of cash and quite frankly of over $500 million of untapped debt to the extent we needed it. Our current leverage is 3.1 turns at the low end of our target of 3 to 4 turns. And we would expect to bounce around in that low 3s, if you will, for the next probably 12 months. Just given what we're spending. And then as you would expect, given the sizable top line growth, which we're seeing will naturally delever.

And by the end of this project, that 50% tower mix that's not connected to the grid, where would that get to?

So Project Green is going to touch roughly 14,000 towers, of which the overwhelming majority, as I mentioned, will be in Nigeria. And we've said that 5,000 of those towers will effectively get great connectivity. Actually only 4% of our total towers in Nigeria are connected to the grid, so a very, very small number. And if you take or assume all 5,000 of those are in Nigeria, it's not all, but it's pretty close. That would imply that we go from 4% to something just under 1/3, we have 17,000 towers in Nigeria in total.

Got it. And do you share some of the benefits of lower costs with your tenants also? Or is it sort of like pure margin expansion for you as you bring this down?

In terms of the power costs?

So I guess this initiative is also going to allow to have some savings at the end of it. And do those kind of like are those shared with the tenants? Or...

It depends on the contract structure. I mean, again, with our largest customer in nature, we do own that cost. So by definition, we're the ones that are going to benefit quite frankly, with our other 2 large customers in that market, we share in the cost of power. So inherently, they would see some benefit as well.

Okay. How do you think about the opportunity to improve margins from here on aside from that.

So our business -- I think our guidance this year is for, I want to say, 53% type margins, if I remember correctly. We do think that you should see margins increasing over the go forward, I mean, I think long term, and I'm not going to put a timeline on it. We do think we can get to 60% margins. So outside the diesel dynamic, which again was a headwind for us this year, we'd expect our margins to go up. The 1 sensitivity I'll just give you, though, for next year, just to be mindful of is there's a power pass-through. So not our indexation with true power pass-through component to our contract with MTN in South Africa. We are in the process now of moving those bills over from MTN's name with the utility company, which is ESCOM over to IHS. We'll subsequently see a lot more power pass-through revenue in 2023 versus 2022. And that's obviously a 0 margin business. So it's effectively a headwind to our aggregate margin. So that will be 1 thing just from a comparative perspective for investors to take into consideration. But outside of that, I would expect our margins to be on up.

And aside from the power and probably very small SG&A, it's mostly a wholesale model, land has to be the biggest cost item. What are -- can you just remind us sort of like your land ownership, maybe how the escalation works on the land leases? And how -- what's the opportunity to maybe take on more ownership there?

Yes. So we own less than 10% of the land underneath our towers across the entire portfolio. And it's really a function of just the cultural aspect of how people approach that and the countries to which we operate in, in Nigeria, in particular, but really crossed our markets. There is an inherent desire to own land. And not to want to sell it to a tower company like ours, but rather to recognize the rent, if you will, that we pay them to use that land. So it's much more difficult, quite honestly, across South Africa for us to own the land underneath their towers, but the other is more anyone else to own land. So thought of a vulture if you will, coming in and having that type of model really doesn't exist in any material way across our African markets. It is just different in LatAm. So we are more inclined in buying land there. And we're actively pursuing that. But again, when you look at our aggregate portfolio, it's still a relatively small number. I would say though, in terms of those contract structures, they are typically similar to what our contract structures would be for the towers may be a little bit lower in terms of years, and then those do also escalate local CPI.

Got it. Okay. And aside from just pure tower leasing business, you're actually -- you also have a fiber-to-the-home strategy, I believe in Brazil. And the side infrastructure revenue streams, how do they fit in your overall strategy maybe to sort of like augment the tower leasing business?

So we have 2 different fiber models. In Nigeria, we've actually gone and built fiber to our towers for a few thousand. And the reason for that is that there's not a lot of other providers building fiber to towers in Nigeria. So we kind of took it upon ourselves to do that and 1 that increases the value of our towers and then also by having fiber connected to them, but it also allows to sell more of a solution set affected customers, which is always a good place to be in from a vendor perspective. The other model that we have is, as you just alluded to, we actually have a fiber to the home business in Brazil. So for those who might not be familiar, there's a neutral host model in Latin America, which is more prevalent there as well as in parts of Europe, where effectively, we've gone and bought TIM Brasil's ISP network. They're passing somewhere around the neighborhood of 7 million homes. And we've gone and bought that and we're effectively leasing it back to TIM is the ISP. So we're not the ones that are going to the consumers and trying to get them to sign up on the service that's still TIM's responsibility then TIM pays us a contracted amount based on the number of homes passed and then the subscribers switch they're successful in bringing on. And that business by itself is very attractive, and we think about it as being power-like in terms of returns where we have 1 anchor tenant effectively today, and you could think of them being a 1 anchor tenant power type return. And then when we get a second tenant or a third tenant that will increase that much more. Given that was a carve-out from TIM, we have spent much of the last year going and building the systems effectively to be able to take on a second ISP customer in terms of the OSS and the BSS, and we're finally at that point where we're largely through that. So you should expect that in 2023, we're very focused on bringing on that second ISP tenant. The other thing I would say, though, as it relates to that specific strategy is that we do subscribe to this whole communications infrastructure 5G world where 5G is going to require a lot more fiber, whether it's in the form of fiber to the tower or enabling DAS or small cells. In the beauty of what we have with I-Systems, which we rebranded that fiber business as is that we then have the ability to go and extend or use that fiber in other ways to help we enable 5G build-outs. And when you think about that, then again, it puts us in a better position in terms of negotiating or relationships with our carrier customers because it's not just about the tower, it's about more of a solution set type approach. And when you think about our market specifically, Brazil, I'd say, South Africa and perhaps Nigeria are probably going to be some of the first markets that where we see 5G deployment, and I think that the haves fiber strategies in those types of markets are going to make sense for us and just put us in a better position strategically going forward.

As you think about investing that next dollar of capital, can you just help us understand the decision-making process a little bit, how you balance it sort of spending it for maybe built or buying power portfolios versus investing adjacent businesses like fiber, you mentioned, it could be SaaS systems or data centers, what's kind of like -- do you have different hurdle rates? Or how do you approach?

Well, I mean, I think, first off, we will always -- or at least my view is maybe this is just Colby speaking for IHS is that we'll always be a power company first. I think the overwhelming majority of our venues will always be focused on tower as opposed to fiber or even data centers, although we're interested to some degree in both of those categories to extent that they incrementally enhance the overall value proposition to which we're selling. With that said then, there's also a limit then on how much CapEx we could actually spend on the business. And we have to be prudent both as it relates to the returns, which we're getting, but also as it relates to our balance sheet and making sure that we run the business appropriately. And I mentioned that 3.1 turns of leverage, our target is 3% to 4%. We want to stick within that lower end of that range. certainly from a CapEx or organic perspective. I'd also say then it comes down to really probably 2 different areas in terms of where we're spending on towers. One is build-to-suits. And then the other 1 right now is Project Green. And just given the returns to which we see from Project Green, which are inherently much more meaningful than it would be for a single tenant build-to-suit. We are selecting where we need to select Project Green opposed to taking on more build-to-suit type opportunities. It doesn't mean we're not going to do them. But Project Green is definitely the priority. I would say as it relates to the fiber business is capital intensive, but we do have commitments as it relates to I-Systems, and we do think that that's an attractive business. So you will see us spending money to continue to expand that. I think at the time of the deal, we said we wanted to get to 10 million homes passed within the first 5 years. And then we will continue to build out more fiber to our towers, particularly in Nigeria. So I think all of those are on the table. But I think is at least the aggregate CapEx, just keep in mind spending $110 million on Project Green this year. We're going to spend $80 million next year. So inherently, that should come down a little bit.

Got it. And I think you did mention before that you would like to diversify your revenue stream and maybe in the existing or new markets, would that -- with the main focus being on the tower business, are there other markets that interest you, that you would like to go into? And how would you evaluate those options?

Yes. I mean we want to go to markets where we could be like 1 of the top tower operators in the market from a tower count perspective. We went into South Africa, we immediately became the #1 provider of 6,000 towers. I would say that we're also going to markets where we see opportunities to grow beyond our initial deals. So if you think about Brazil, we've done 5 transactions, 4 of those were tower-oriented. One was fiber in the form of the TIM carve-out, but -- and we put ourselves in a position we're now the third largest tower operator in Brazil. And as I mentioned in all our Americas in Africa, we're the #1 provider. I would say that we're interested in doing more in South Africa. A few of those tower portfolios are still owned by the MNOs, whether it's Voda or Telkom. So we'll see what happens over the next few years. I would say also in Brazil, it's a somewhat fragmented market with, I think, more opportunities to be done there. So from a current market perspective, I'd say those are probably just come to mind. I think beyond that, we are interested in doing more in LatAm, whether it is in Peru or Colombia, where those are subscale markets for us today, but again came through our acquisition to get into Brazil. You would assume that we're trying to figure out what to do with over the long term, but we do think that there's more opportunities and we are interested in getting bigger in LatAm. And I'd also say in terms of the Middle East, right now in Kuwait. We have aspirations to grow there. And the beauty of some of those markets is their currencies are much more stable than you might see in some African gets in part because of the oil production and that's certainly something that we're attracted to. And I think long term, what I'd say to you is that we've also suggested Southeast Asia could be an area of focus. I don't think that that's something we're immediately focusing on, but long term, wouldn't necessarily rule it out. We really want to be the leading live provider of going after emerging markets. And I think as an investor, what you get with that is, one, you get faster growth but you get higher returns, you have to get risk. But to the extent that that's something that people want to have in their investment portfolio we think we're well suited to be that company. And I think that there's not going to be very many companies that do that and really will give us a differentiated perspective.

And what's your view of the M&A environment right now, though, there seems to be a bit of a divergence in terms of public versus private multiples. Do you think there will be opportunities in the near term?

Yes, I'd say that I've been surprised by the number of processes that are still going on given the world to which we all live in. And I think that, that's partly a reflection of just the interest in these types of assets, not by strategics like ourselves, but also financial sponsors, which remain very active in the space. I do think the multiple will come down a little bit versus what we might have seen a year ago, which is certainly to all of us, our benefit on the buy side. But still what I refer to as healthy multiples. You should assume that we're looking at any type of transaction that could strategically make sense to us. And I would say that to the extent we think it makes sense, we would bid on that asset. We're not afraid to do that, but we are going to be in this current market environment, having to self-fund it through the EBITDA that comes with that transaction and within our debt envelope, recognizing that given our stock price, equity would not be something we would necessarily want to consider at these levels.

Right. Maybe the last couple of minutes we have, we could recap everything in terms of sort of like a little bit of a midterm or long-term outlook for the company in your view. Feel free to give some long-term guidance in terms of how we should think about like the maybe revenue growth profile for the company, the margin expansion and as you think about capital priorities, is it mostly maintaining that leverage? And where does that excess cash goes?

Yes. I would summary by saying that aspire to sustained double-digit top line growth to see margin expansion over time. For us to continue to reduce our exposure to diesel through things like Project Green, which have a clear payback, which is highly attractive, for us to have a prudent balance sheet, particularly in today's market. And in that perspective, remain disciplined in terms of how we think about that balance sheet. I do think that 3x is at the lower end compared to some of our emerging market peers, which we're proud of. And I think that even some of the other things we've done recently, including announcing a new 3-year bullet term loan, which allowed us to take out our bridge for the South African acquisition and repay some other debt effect we put -- push out our maturities. Those are all things that are very important to us right now. And at the same time, as I mentioned, we have over $500 million of cash and we have over $500 million of undrawn revolvers of some form, which gives us over $1 billion of capacity to the extent we were to need it. Being prudent in today's market is focused for us and something that we highlighted in our most recent earnings call.

That's great. I think we can end it there. Thank you so much.

Thank you.