Web Loss Widens As Income Falls

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Vodafone Idea’s net loss has increased in the end of June quarter due to declining revenues and other revenues, although total expenditures increased.

The net loss for the quarter April through June 2021 was 7,319.1 billion rupees, according to a stock exchange filing. That compares to a consensus net loss estimate of Rs 6,614.6 billion, according to analysts tracked by Bloomberg. In the previous quarter, Vodafone Idea reported a net loss of 7,022.8 billion rupees.

Revenue decreased 4.7% from the previous quarter to Rs 9,152.3 billion. Analysts had estimated sales at Rs 9,592.1 crore. Other income decreased 16.7% to Rs 33.5 billion.

Fewer top-ups due to Covid-related bans, free extensions for low-cost customers and a slowdown in economic activity all had an impact on revenue growth in the first quarter.

Highlights (quarter-to-quarter comparison)

  • Operating profit decreased 15.9% to Rs 3,707.7 billion.

  • The margin fell from 45.9% to 40.5%.

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

  • Total spending increased 6.2% to Rs 16,682.8 crore.

Earlier this month, Kumar Mangalam Birla stepped down as non-executive director and non-executive chairman of Vodafone Idea. With the operator’s survival in doubt due to its liabilities, Birla wrote to the government on June 7th asking for support for Vodafone Idea and offering to sell shares to any government or private investor.

Vodafone Idea’s gross debt (excluding lease liabilities) as of June 30th was Rs.191,590 billion, consisting of spectrum deferred obligations of Rs. 1,06,010 and AGR liabilities of Rs. 62,180 million. Debt from banks and financial institutions is Rs. 23,400 million.

The company’s net debt was Rs 1.90.670 billion, an increase of 5.95% quarter over quarter and 65.1% year over year.

The company’s capital expenditures were Rs 940 billion in the first quarter compared to Rs 1,540 billion in the three months prior.

Vodafone Idea’s cellular subscriber base was 25.54 crore in June, as 1.23 crore subscribers have lost since March. The 4G subscriber base was € 11.29 billion, a decrease of 10 lakhs during the quarter. Data volumes increased sequentially by 13.2%, driven by higher data demand during the lockdown.

The auditor has identified material uncertainties that give rise to doubts about the company’s ability to continue as a going concern. “The company’s financial performance has impacted its ability to generate the cash flow it needs to meet / refinance its liabilities and guarantees when due, which, along with its financial condition, creates a material uncertainty that raises serious doubts about the ability of the Company poses. To make payments and to continue the company’s business, “says the auditor’s report accompanying the results.