Vodafone Idea Q4 Net Loss Widens to ₹6985.1 Crore

The net loss of Vodafone Idea for Q4 widened to ₹6985.1 crore from ₹4540.8 crore in the previous quarter. The company reported the figures in a notice to the stock exchanges on Wednesday.

Vodafone Idea's Financial Struggles in Numbers

The telco has suffered the most from the absence of IUC. As such, Vi's total quarterly revenue fell to ₹9,607.6 crore from ₹10,894.1 crore in the Q3.

The company's EBITDA rose to ₹4401 crore from ₹4286.2 crore. That was due to the fact that Vodafone Idea managed to lower expenses in Q4. Further, the report said that Vi will target ₹4000 crore in annualized cost savings by the end of 2021. Also, EBITDA margins reached 45.9%, up from 39.3% in Q3.

"Through several initiatives, we have already achieved around 65% of the targeted annualised savings on a run-rate basis by the end of Q4FY21," it said.

The telco's ARPU was the lowest in the segment at ₹107. It was also lower than ₹121 it clocked in the previous quarter. In the telecom sector, Bharti Airtel and Reliance Jio have posted an ARPU of ₹145 and ₹138.2 respectively in Q4. The IUC dip has impacted all three of the telcos, however, Vi seems to be the one most affected. It also said that domestic IUC getting banned caused an almost 10% revenue drop.

Vodafone Idea had a net debt of ₹1,79,960 crore at the end of Q4. This includes deferred spectrum payment obligations of ₹96,270 crore and AGR liability of ₹60,960 crore, due to the Government. The telco also owes an ₹23,080 crore to banks and financial institutions.

In another positive for the telco, it managed to fix the user drip somewhat. Vodafone Idea added 4 million new subscribers, while losing only 2 million. That means, Q4 was net positive for the telco, who now has 267.8 million subscribers. However, it is still a far cry from rivals Jio and Airtel who have 426.2 million and 340 million, respectively.

Risks and Fundraisers

The operator said, "there exists material uncertainty relating to the company’s ability to continue as a going concern which is dependent on its ability to raise additional funds as required, successful negotiations with lenders on continued support, refinancing of debts, monetisation of certain assets....".

The most important aspect right now is the fate of Vi's plea filed in the Supreme Court to reduce its AGR dues from the over ₹58,000 crore demanded by the DoT.

Other risks include whether the government will accept its request to defer payment of ₹8,211.7 crore towards spectrum purchases, which falls due on April 9, 2022. Also, Vodafone Idea needs to generate enough cash flow to settle/renew its liabilities/guarantees as they fall due.

The telco also suffered a rating downgrade earlier this year. That has led to a few lenders asking for increasing interest rates and security against existing facilities. The telco said, "the Group has exchanged correspondences and continues to be in discussion with the lenders for the next steps/waivers".

The telco's fundraising exercises have seen little success, too. Vodafone Idea had announced a ₹25,000-crore fund raising last September via a mix of equity and debt, which hasn’t yet been finalised. The telco has held talks with various potential investors for several months.

Ravinder Takkar, MD, Vodafone Idea, said, "we are in active discussion with potential investors for fund raising, to achieve our strategic intent".