AGR effect: Vodafone Idea Q2 loss balloons to Rs 50,921 crore

Vodafone Idea, India's leading telecom operator, on Thursday reported widening of consolidated net loss to Rs 50,921.90 crore during the second quarter ended September 30, 2019 from net loss of Rs 4,973.80 crore in the same quarter last year and Rs 4,873.90 crore in the June quarter.

The September quarter result was impacted by the Supreme Court order on the definition of adjusted gross revenue (AGR). The company has estimated liability of Rs 27,610 crore related to licence fee and Rs 16,540 crore to spectrum usage charges for the quarter based on Supreme Court's judgement.

"Vodafone Idea's consolidated revenue increased to Rs 10,844 crore as against Rs 7,663.60 crore in the same quarter last year," the telecom major said in a filing to the Bombay Stock Exchange. On the sequential basis, the revenue declined 3.8 per cent as compared to Rs 11,269.90 crore in June quarter, impacted by seasonality and by severe floods in many of our major markets.

The consolidated financial result for the quarter ended September 30, 2019, are not comparable with other quarters as the merger of Vodafone India and Idea Cellular was completed on August 31, 2018.

Also Read: AGR provisioning blows Rs 23,045 crore hole in Airtel balance sheet

Consolidated EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) decreased by 8.3 per cent quarter-on-quarter (QoQ) to Rs 3,347.1 crore "as lower revenue was partially offset by continued cost synergy realisation", the company said. EBITDA margin declined to 30.9 per cent in the quarter as compared to 32.4 per cent in the last quarter.

Depreciation and Amortisation expenses stood at Rs 6,309.4 crore versus Rs 6,130.8 crore in June quarter, due to adoption of Ind AS 116.

Commenting on Q2 earnings, Ravinder Takkar, MD and CEO of Vodafone India said the company is in active discussions with the government seeking financial relief following the Supreme Court ruling.  At the same time, we remain highly focused on rapid network integrating and 4G coverage and capacity expansion in our key markets, Takkar said.

Also Read: Vodafone CEO says India venture in critical state; liquidation possible after AGR shock

Earlier this week, Vodafone Group Plc Chief Executive Officer Nick Read has said the company's India unit could be headed for liquidation if the government does not reconsider its demand of mobile spectrum fees post the Supreme Court's verdict last month.

As of September 30, 2019, the telco's gross debt stood at Rs 1,17,300 crore, including deferred spectrum payment obligations due to the government of Rs 89,170 crore, but excluding lease liabilities. Cash and cash equivalents were Rs 15,390 crore, while net debt stood at Rs 1,01,910 crore against Rs 99,260 crore in Q1FY20.

Earlier today, rival Bharti Airtel posted highest-ever quarterly loss of Rs 23,045 crore during the second quarter ended September 30, 2019, due to provisioning for AGR dues after Supreme Court's verdict.

Ahead of Q2 earnings announcement, shares of Vodafone Idea closed 20.27 per cent lower at Rs 2.95 apiece on the BSE on Thursday.

Edited by Chitranjan Kumar