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Vodafone Idea slips after recording loss of Rs 4,532 crore in December quarter

·3-min read

Net sales during the quarter fell by 1.7% year-on-year (YoY) to Rs 10,891.60 crore. The company recorded a net gain of Rs 1696.5 crore during the quarter on sale of stake in Indus Towers.

The company recorded a pre-tax loss of Rs 4532.40 crore in Q3 December 2020 as compared to a pre-tax loss of Rs 6421.40 crore in Q3 December 2019. It incurred a current tax expense of Rs 0.20 crore during the quarter.

On a sequential basis, the company's net loss has narrowed down significantly in Q3 FY21 from Rs 7218.20 crore in Q2 FY21. Revenue for the quarter improved by 1% from Rs 10,788.20 crore in the second quarter, supported by higher 4G additions.

EBITDA rose by 3.2% to Rs 4286.2 crore in Q3 December 2020 from Rs 4152.4 crore in Q2 September 2020. EBITDA margins was at 39.3% in Q3 FY21 as against 38.5% in Q2FY21. The teleco said that EBITDA was positively impacted due to the amortisation of subscriber acquisition cost over the average expected customer life. Additionally, EBITDA improvement was driven by higher revenue as well as incremental opex savings from our cost optimization initiatives.

The subscriber base stood at 269.8 million in Q3FY21, a quarter-on-quarter (QoQ) decline of 2.0 million (vs 8.1 million decline in Q2FY21). The gross additions continued to improve and subscriber churn has reduced to 2.3% in Q3FY21 as against 2.6% in Q2FY21). ARPU for Q3FY21 improved to Rs 121 compared to Rs 119 in Q2FY21.

At the end of the quarter, the 4G subscriber base was 109.7 million as against 106.1 million in Q2), an increase of 3.6 million in the quarter. The data volumes grew by 3.4% QoQ, driven by higher 4G additions. Total minutes on the network declined by 1.5% during the quarter compared to 4.0% decline in Q2FY21.

Capex spend in Q3FY21 was Rs. 9.7 billion vs Rs. 10.4 billion in Q2FY21. Gross debt (excluding lease liabilities) as of 31 December 2020 was Rs 1,173.7 billion, comprising of deferred spectrum payment obligations due to the Government of Rs 942 billion and debt from banks and financial institutions of Rs 231.7 billion. Cash & cash equivalents were Rs 2.9 billion and net debt stood at Rs 1,170.8 billion as compared to Rs. 1,145.1 billion in Q2FY21.

The company expects to achieve Rs 40 billion of annualized cost savings by end of this calendar year. Through several initiatives, it has already achieved approximately 50% of the targeted annualised savings on a run-rate basis by the end of Q3FY21.

It has received board approval received for fund raise of upto Rs 250 billion through a mix of debt and equity and is currently in active discussions with potential investors.

Ravinder Takkar, MD & CEO, Vodafone Idea, said “In Q3FY21, we improved subscriber retention and operating performance, supported by Vi GIGAnet, which remains the fastest 4G network in India, as per Ookla as well the network with highest rated voice quality as per TRAI - a testimony to our superior network. We remain focused on executing our strategy, and our cost optimization plan remains on track to deliver the targeted savings. The Board has approved funds raising to support our strategic intent and we are in active discussions with potential investors.”

Vodafone Idea is an Aditya Birla Group and Vodafone Group partnership. It is amongst India's leading telecom service provider. The company provides pan India Voice and Data services across 2G, 3G and 4G platforms.



Source: Capitalmarket.com