Vodafone Idea reports Rs 7,319 crore net loss in Apr-Jun, ARPU declines to Rs 104

Vodafone Idea on Saturday reported a consolidated net loss of Rs 7,319.1 crore during April-June quarter as against a loss of Rs 25,460 crore in the year-ago quarter. The company had reported a net loss of Rs 7,022.8 crore in the preceding March quarter.

The cash-strapped telecom operator's revenue from operations declined to Rs 9,152.3 crore during the quarter from Rs 10,659.3 crore a year ago and Rs 9,607.6 crore in the March quarter. The company attributed the decline in revenue to lockdown and restrictions in most of the districts during the severe second wave of COVID-19.

The telecom operator's subscriber base decline by 1.23 crore from March quarter to 25.54 crore at the end of June quarter, while its average revenue per user (ARPU) during the quarter was at Rs 104 as against Rs 114 in the year-ago quarter and Rs 107 in March quarter.

"The 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," Vodafone Idea said. However, total 4G subscriber base was almost unchanged at 11.29 crore as against 11.39 crore in March quarter.

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The earnings before interest, tax, depreciation and amortisation (EBITDA) stood at Rs 3,707.7 crore during June quarter as against Rs 4,098.4 crore in the year-ago quarter and Rs 4,408.7 crore in March quarter. Meanwhile, EBITDA margin for the quarter expanded to 40.5 per cent from 38.4 per cent in June quarter last year, but contracted from 45.9 per cent in March quarter.

"Post adoption of IndAS 116, the accounting for operating lease expenses has changed from rentals to depreciation on the right-of-use asset and finance cost for interest accrued on lease liability. Accordingly, this has an impact of Rs 22.8 billion and Rs 0.5 billion on network expenses and other expenses respectively," the company said.

EBITDA excluding IndAS 116 impact declined to Rs 1,280 crore, adjusted for one-off of Rs 100 crore, compared to Rs 1,720 crore in Q4FY21, on account of lower revenue during the quarter, it added.

The company's capital expenditure spend for Q1FY22 was at Rs 9,400 crore as against Rs 1,540 crore in Q4FY21.

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The total gross debt (excluding lease liabilities and including interest accrued but not due) as of June 30, 2021 stood at Rs 1,91,590 crore, comprising of deferred spectrum payment obligations of Rs 1,06,010 crore and adjusted gross revenue (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.

Vodafone Idea said it continues invest in 4G to increase its coverage and capacity. During the quarter, the company added about 6,400 4G FDD sites primarily through refarming of 2G/3G spectrum to expand its 4G coverage and capacity.

"Our overall broadband site count stood at 447,114, lower compared to 452,650 in Q4FY21 as we continue to actively shutdown 3G sites," it said.

The telecom operator said it has undertaken cost optimisation exercise across the company in line with the evolving industry structure and business model and targets to achieve Rs 4,000 crore of annualized cost savings by end of this calendar year.

"Through several initiatives, we have already achieved about 70 per cent of the targeted annualised savings on a run-rate basis by the end of Q1FY22," it said.

Shares of Vodafone Idea on Friday closed 2.77 per cent lower at Rs 6.32 on the BSE.

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