Vodafone Idea Q1 Results: Net Loss Widens As Revenue Falls

Vodafone Idea’s net loss widened in the June-ended quarter due to a decline in revenue and other income, even as total expenditure rose.

Net loss for the April-June 2021 quarter stood at Rs 7,319.1 crore, according to an exchange filing. That compares with a consensus net loss estimate of Rs 6,614.6 crore according to analysts tracked by Bloomberg. In the previous quarter, Vodafone Idea reported a net loss of Rs 7,022.8 crore.

Revenue fell 4.7% quarter-on-quarter to Rs 9,152.3 crore. Analysts had pegged revenue at Rs 9,592.1crore. Other income declined 16.7% to Rs 33.5 crore.

Fewer recharges due to Covid related lockdowns, free validity extensions for low-cost customers, and a slowdown of economic activity impacted revenue growth in the first quarter.

Highlights (Quarter-on-Quarter Comparison)

• Operating profit fell 15.9% to Rs 3,707.7 crore.

• Margin contracted to 40.5% from 45.9%.

• Average revenue per user—the amount an operator earns per subscriber per month—fell to Rs 104 from Rs 107.

• The total expenditure rose 6.2% to Rs 16,682.8 crore.

Earlier this month, Kumar Mangalam Birla stepped down as non-executive director and the non-executive chairman of Vodafone Idea. With the carrier's survival in doubt because of its liabilities, Birla wrote to the government on June 7 seeking support for Vodafone Idea and offering to sell stake to any government or private investor.

Vodafone Idea's gross debt (excluding lease liabilities) as of June 30 stood Rs 1,91,590 crore, comprising of deferred spectrum payment obligations of Rs 1,06,010 crore and AGR liabilities of Rs. 62,180 crore. Debt from banks and financial institutions stands at Rs. 23,400 crore.

The net debt of the company stood at Rs 1,90,670 crore, up 5.95% over the preceding quarter and 65.1% over a year earlier.

The company's capex spend in the first quarter was Rs 940 crore compared to Rs 1,540 crore in the prior three months.

Vodafone Idea's wireless subscriber base stood at 25.54 crore as of June as it lost 1.23 crore subscribers since March. The 4G subscriber base was 11.29 crore, a decrease of 10 lakhs during the quarter. Its data volume rose 13.2% sequentially, driven by higher data demand during the lockdown.

The auditors have flagged material uncertainty that casts doubt on the company’s ability to continue as a going concern. "The company’s financial performance has impacted its ability to generate the cash flow that it needs to settle/ refinance its liabilities and guarantees as they fall due, which along with its financial condition, is resulting in material uncertainty that casts significant doubt on the company’s ability to make the payments and continue as a going concern", said the auditors report accompanying the earnings.