Indus Towers Q4 net profit dips 23% to Rs 1,399 cr on drop in revenue

Indus Towers reported on Wednesday 23 per cent decline in consolidated net profit in fourth quarter FY23 on account of drop in revenue and provision on account of doubtful receivables.

the net profit for the quarter stood at Rs 1,399 crore compared to Rs 1,829 crore in the same period last year. Revenue fell 5 per cent on a year on year basis to Rs 6,753 crore as the tower company continues to face challenges in recovering dues from Vodafone Idea. Earning before interest tax depreciation and amortization was down 15 per cent year on year to Rs 3447 crore.

Indus Towers said it has made an incremental provision of Rs 43 crore in the fourth quarter. While this was lower compared to previous quarters it reflected the continued recovery stress for the company. As of March end, the provision for doubtful receivables stood at Rs 5,453 crore.

“The financials of Q4 2021-22 included a one-time positive impact of Rs 547 crores on account of deferred recognition of revenue from past settlements. In 2022-23, the Company adhered to prudent accounting practices and reflected the stress on its receivables due to collection challenges faced from one of the major customers,” the company said.

“We ended the year on a positive note with a robust operational performance and improvement in collections during the last quarter. The renewal of co-locations with our major customers during the year has secured our business over the long run. Furthermore, the rapid pace of 5G rollouts and new tower rollouts supported by our major customer’s focus on expansion are expected to act as strong levers of growth for the foreseeable future,” the company’s MD& CEO Prachur Sah said.

Vi had submitted a payment plan that was approved by the tower company’s board in October 2022.  Indus Towers agreed to the telco’s proposal of substantially paying its billed amount till December. Vi had agreed to pay 100 per cent of the billed amount and outstanding amounts between January-July 2023.

“During the current quarter, the funding plan of the said customer did not materialize and the said customer indicated challenges in making the committed payments pertaining to the outstanding amount due as at December 31, 2022. However, the said customer has been paying an amount equivalent to monthly billing from January 2023, hence, the Group continues to recognize revenue from operations relating to the said customer for the services rendered,” Indus Towers said.