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    Voda Idea Q2 loss widens to Rs 50,922 crore; key takeaways

    Synopsis

    Vodafone Idea’s revenue from operations more than halved to Rs 10,844 crore from Rs 22,114 crore.

    Mumbai: Telecom major Vodafone Idea on Thursday posted largest ever loss by an Indian company at Rs 50, 922 crore for the quarter ended September 30, as it made a provision for Supreme Court’s ruling on payment of average gross revenue (AGR) dues.

    The company had posted a loss of Rs 5,579.6 crore in the same quarter a year ago.

    Vodafone Idea’s revenue from operations more than halved to Rs 10,844 crore from Rs 22,114 crore.

    Ahead of the announcement, the company’s shares closed 20.27 per cent lower at Rs 2.95 a share on BSE. It touched a record low of Rs 2.90 during the day.

    Here are the key takeaways:


    Provision for AGR dues
    Consequent to the recent judgement by Supreme Court, the company said it has accounted for the estimated liability of Rs 27,610 crore related to license fee and Rs 16,540 crore related to spectrum usage charges up to September 30including the interest, penalty and interest thereon of Rs 33,010 crore.

    Ebitda declined sequentially
    Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter decreased to Rs 3,350 crore, a decline of 8.3 per cent on a QoQ basis, as lower revenue was partially offset by continued cost synergy realisation.

    Operational highlights
    The subscriber base declined to 31.11 crore from 32 crore in Q1FY20. Subscriber churn continues to improve, reaching 3.5 per cent in Q2FY20 compared with 3.7 per cent in Q1FY20 and 7.2 per cent in Q4FY19. Average revenue per user (Arpu) for Q2 was Rs 107 vs Rs 108 in Q1FY20.

    Seeking government relief
    Ravinder Takkar, managing director and CEO of Vodafone India said they are in active discussions with the government seeking financial relief following the Supreme Court ruling. “At the same time, we remain highly focused on rapid network integrating and 4G coverage and capacity expansion in our key markets,” Takkar said in the press release.

    Going concern risk
    “It is to be noted that our ability to continue as a going concern is dependent on obtaining the reliefs from the government as discussed above and positive outcome of the proposed legal remedy,” the company said expressing its concerns.

    Integration update
    The company said integration is progressing well and is expected to complete by Q1FY21. Opex synergies of Rs 8,400 crore are targeted to be achieved two years earlier than the initial plan set at the time of the merger announcement in March 2017.
    As at September 30, the company had completed network integration in 14 service areas with Orissa, Karnataka, Rajasthan and Kolkata integrated during Q2.
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    The Economic Times