Vodafone Idea slips on recording Q1 net loss of Rs 7,319 cr

Vodafone Idea fell 4.43% to Rs 6.04 after the company reported a consolidated net loss of Rs 7,319.1 crore in Q1 FY22 as against a net loss of Rs 25,460 crore in Q1 FY21.

Gross revenue declined by 14.1% to Rs 9,152.3 crore in Q1 FY22 as against Rs 10,659.30 crore in Q1 FY21.

Revenue for the quarter declined 4.7% QoQ, on account of slowdown in economic activities due to lockdown or restrictions in most of the districts during the severe second wave of COVID.

On a reported basis, EBITDA for the quarter declined 15.9% YoY to Rs 3,707.7 crore, with EBITDA margins at 40.5%. The company had reported an EBITDA of 4,408.7 crore in Q4 FY21. Capex spend for Q1FY22 was Rs 940 crore vs Rs 1540 crore in Q4FY21.

The total gross debt (excluding lease liabilities and including interest accrued but not due) as of 30 June 2021 stood at Rs 1,91,590 crore, comprising of deferred spectrum payment obligations of Rs 1,06,010 crore and AGR liability of Rs 62,180 crore that are due to the Government and debt from banks and financial institutions of Rs 23,400 crore. Cash & cash equivalents were Rs 920 crore and net debt stood at Rs 1,90,670 crore.

The company's subscriber base declined by 12.3 million as the second wave of COVID disrupted economic activity, with lockdowns or restricted store timings impacting the gross additions during the quarter. The subscriber base stood at 255.4 million in Q1FY22 as against 267.8 million in Q4FY21. However, the 4G subscriber base remained resilient at 112.9 million as compared with 113.9 million in Q4FY21.

Subscriber churn was 3.5% in Q1FY22 vs 3.0% in Q4FY21. ARPU declined to Rs 104 as against Rs 107 in Q4 FY21. The data volumes witnessed strong growth of 13.2% QoQ, driven by higher data demand during the lockdown. Data usage per broadband subscriber surged to 14.6 GB/month as against 12.8 GB/month in Q4 FY21.

After successfully achieving targeted merger opex synergies of Rs 8,400 crore, the company has undertaken the cost optimization exercise across the company in line with the evolving industry structure and business model. The company targets to achieve Rs 4,000 crore of annualized cost savings by end of this calendar year. Through several initiatives, the company has already achieved approximately 70% of the targeted annualised savings on a run-rate basis by the end of Q1 FY22.

On fund raising, the company said that it is currently in active discussion with potential investors.

The Supreme Court (SC) had dismissed the modification application filed by the company and other telecom operators for correction of the manifest/clerical/arithmetic errors in AGR calculation. Subsequently, the company has filed a review petition with the SC.

Ravinder Takkar, MD & CEO, Vodafone Idea, said, "The severe second wave of COVID caused significant disruptions and slowdown in economic activities. During these challenging times, VIL continued to serve its customers and community at large by providing seamless connectivity as well as maintaining superior quality of services. Vi GIGAnet's superior network experience on both data and voice, is testified through top rankings in independent external reports. We continue to focus on executing our strategy to keep our customers ahead, and our cost optimization plan remains on track to deliver the targeted savings. We are in active discussion with potential investors for fund raising, to achieve our strategic intent."

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.

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