Vodafone Idea Q2 Results: Net Loss Narrows As Expenses Decline
The carrier’s net loss stood at Rs 7,132.3 crore in the quarter ended September.
Vodafone Idea Ltd.’s quarterly loss narrowed, supported by a decline in costs.
The carrier’s net loss stood at Rs 7,132.3 crore in the quarter ended September against Rs 7,319.1 crore in the preceding three months, according to its exchange filing. A consensus of analyst estimates compiled by Bloomberg had pegged the loss at Rs 7,293.5 crore.
Finance costs fell 2.2% quarter-on-quarter to Rs 5,111.4 crore and other costs fell 59.5% sequentially to Rs 110.2 crore.
It's the 13th straight quarter of losses for India’s third-largest telecom operator. It hasn’t reported an annual profit since 2017.
Highlights (QoQ)
Revenue rose 2.8% to Rs 9,406.4 crore, compared with the estimated Rs 9,321.5 crore.
Other income fell 13.1% to Rs 29.1 crore.
Total expenditure fell 0.63% to Rs 16,577.6 crore.
Operating profit rose 4.2% to Rs 3,862.9 crore.
Margin expanded to 41.1% from 40.5%.
Average revenue per user—the amount an operator earns per subscriber per month—rose to Rs 109 from Rs 104.
The telecom operator’s ARPU growth was supported by an increase in minimum recharge plans, higher recharge frequency after the second Covid-19 wave, and withdrawal of free talk-time benefits. Despite increase in entry-level prices during the quarter the monthly churn rate fell to 2.9% as of September compared with 3.5% in June.
Vodafone Idea’s gross debt (excluding lease liabilities) as on Sept. 30 was Rs 1,94,780 crore comprising deferred spectrum payment obligations of Rs 1,08,610 crore and AGR liability of Rs 63,400 crore. It also include debt from banks and financial institutions of Rs 22,770 crore.
Its net debt stood at Rs 1,94,530 crore, up 2% sequentially and 69.9% over the year earlier. Capex spend was Rs 1,300 crore compared with Rs 940 crore in the previous quarter.
The company’s wireless subscriber base fell 24 lakh over the preceding quarter to 25.3 crore. Its 4G subscriber base was at 11.62 crore compared with 11.29 crore in the preceding quarter. Data volumes rose 0.4% sequentially.
Vodafone Idea's auditors have flagged material uncertainty that casts doubt on its 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 as they fall due," the report accompanying the company's earnings said. "Its ability to continue as a going concern is dependent on the company's ability to raise additional funds as required and successful negotiations with lenders for continued support."
Shares of Vodafone Idea gained 4.1% after the results were announced compared with a 1.3% gain in the benchmark BSE Sensex.