Vodafone Idea Limited reports earnings for Q2FY21

Vodafone Idea Limited has announced the financial results for the period ended September 30, 2020.

Revenue for the quarter was Rs. 107.9 billion, a growth of 1.2% QoQ, as economic activities have gradually started to resume. On reported basis, EBITDA for the quarter was Rs. 41.5 billion. EBITDA excluding IndAS 116 impact was up 5.9% QoQ at Rs. 16.3 billion, (after adjusting for one-off of Rs. 3 billion) on account of higher revenue and cost savings, but partially offset by higher subscriber acquisition costs as gross additions, which were impacted by closure of outlets during peak of lockdown, improved this quarter. The EBITDA margin, excluding IndAS 116 impact and adjusted for one-offs, improved to 15.1% vs 14.4% in Q1FY21.

Capex spend in Q2FY21 of Rs. 10.4 billion, improved compared to Rs. 6.0 billion in Q1FY21. Gross debt (excluding lease liabilities) as of September 30, 2020 was Rs. 1,159.4 billion, including deferred spectrum payment obligations due to the Government of Rs. 923.1 billion. Cash & cash equivalents were Rs. 14.3 billion and net debt stood at Rs. 1,145.1 billion (vs Rs. 1,155.0 billion in Q1FY21).

Ravinder Takkar, MD & CEO, Vodafone Idea Limited, said "As we reach the end of our integration journey, we have become the fastest and most consistent 4G network of India, as validated by Ookla, a testimony to our superior and improved 4G GIGAnet network covering 1 billion Indians. We have launched our new unified brand "Vi", built on the legacy of two of the most loved brands of the country, and are all set to regain customer mind share. While we continue to face COVID-19 induced challenges, Q2FY21 showed signs of recovery with a gradual improvement in economic activities. We are executing on our strategy and our cost optimization exercise has already started to yield incremental savings. We have also initiated a fund raising exercise to support our strategic intent. Further, we continue to interact with the government seeking long term solutions to the critical challenges, which the industry faces."

The subscriber base declined to 271.8 million in Q2FY21 from 279.8 million in Q1FY21. However, the gross additions improved with gradual reopening of retail stores. The subscriber churn increased to 2.6% (vs 2.0% in Q1FY21), as the market activity increased during the quarter with lifting up of restrictions. ARPU for Q2FY21 improved to Rs. 119 compared to Rs. 114 in Q1FY21.

We continue to invest in 4G to increase coverage and capacity. We added ~10,000 4G FDD sites primarily through refarming of 2G/3G spectrum to expand our 4G capacity. We also made progress in implementing LTE 900 in select locations, including through dynamic spectrum refarming, to improve customer experience. We have deployed ~61,300 TDD sites in addition to deployment of ~12,400 Massive MIMO sites and ~11,800 small cells till date. Our overall broadband site count stood at 457,386 as of Q2FY21 compared to 446,131 in Q1FY21, with 4G coverage to ~1 billion Indians.

At the end of the quarter, the 4G subscriber base stands at 106.1 million (vs 104.6 million in Q1). The data volumes declined by 4.0% QoQ, as data usage normalised compared to the significantly higher volumes witnessed during the early months of lockdown. Total minutes on the network declined by 4.0% during the quarter.

After successfully achieving targeted merger opex synergies of Rs. 84 billion, we embarked on a cost optimization exercise across the company in line with the evolving industry structure and business model. Through this exercise, we plan to achieve Rs. 40 billion of annualized cost savings over 18 months. As of Q2FY21, we have already achieved ~25% of the targeted annualised cost savings.

Shares of Vodafone Idea Ltd was last trading in BSE at Rs.8.38 as compared to the previous close of Rs. 8.68. The total number of shares traded during the day was 36166385 in over 65285 trades.

The stock hit an intraday high of Rs. 8.71 and intraday low of 8.28. The net turnover during the day was Rs. 305856456.

Source : Equity Bulls

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