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Vodafone Idea tumbles after Q2 net loss tops Rs 50,000 crore

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On consolidated basis, the company reported a net loss of Rs 50,921.9 crore in Q2 September 2019 as against a net loss of Rs 4973 crore in Q2 September 2018.

The telecom operator reported a 41.8% rise in net sales to Rs 10840.20 crore on a YoY basis.

The Supreme Court (SC) judgment on 24 October on the Adjusted Gross Revenue (AGR) significantly impacted the financial stability of the company. SC provided the company a 90 days time to pay the amount and report compliance. Consequent to the SC judgement, the company 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 30 September 2019 including the interest, penalty and interest thereon of Rs 33,010 crore.

The Average Revenue per User (ARPU) declined from Rs 108 in Q1 June 2019 to Rs 107 in Q2 September 2019, impacted by seasonality and by severe floods.

The subscriber base declined to 311.1 million from 320 million in Q1FY20. Subscriber churn continues to improve, reaching 3.5% in Q2FY20 compared to 3.7% in Q1FY20 and 7.2% in Q4FY19. During the quarter, gross subscriber additions has also increased QoQ. ARPU for Q2 was Rs 107 vs Rs 108 in Q1FY20.

Gross debt as of 30 September 2019 was Rs 1,17,300 crore, including deferred spectrum payment obligations due to the government of Rs 89,170 crore, but excluding lease liabilities. Cash & cash equivalents were Rs 15,390 crore and net debt Rs 1,01,910 crore (vs Rs 99,260 crore in Q1FY20).

With reference to news item captioned, "Vodafone Idea cracks 22% as AB Group unlikely to bring in fresh capital," the company clarified to the bourses after market hours on Thursday that it can not provide any clarification/confirmation with regard to the above news item as it is not privy to discussions or decisions, if any, of the Aditya Birla Group in this regard. Further, the board of directors has not discussed anything at any of its meeting on the captioned subject.

Earlier this month, Brickwork Ratings downgraded its rating on company's non-convertible debentures (NCDs) from BWR A+ to BWR A - with negative implications. The revision in rating was on account of Supreme Court ruling dated 24 October 2019 on the AGR matter.

Shares of Vodafone Idea were trading 4.41% lower at Rs 2.82. Meanwhile, the S&P BSE Sensex was trading 0.53% higher at 40,498.14.

Vodafone Idea is an Aditya Birla Group and Vodafone Group partnership. It is India's leading telecom service provider.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, November 15 2019. 09:48 IST