Stock Trading Tips- Vodafone Idea Q2 net loss at Rs 4,974 crore
Vodafone Idea Q2 net loss at Rs 4,974 crore, a company looking at raising Rs 25,000 crore; to sell its optic fiber network
The company said the figures for revenue, Ebitda and key performance indicators for Q1 and Q2 FY19 are pro-forma figures and presented as if Vodafone Idea was a merged entity from April 1, 2018.
Vodafone Idea on Wednesday posted a massive consolidated net loss of Rs 4,974 crore for the July-September quarter, underlining once again the financial stress the telecom operators are undergoing due to a below-cost tariff which is leading to customers migrating to lower average realization per user (Arpu) offerings.
Vodafone and Idea, which completed their merger on August 31, said that the earnings for the September quarter includes results for Idea Cellular up to August 30, and Vodafone Idea from August 31 to September 30, and hence are not comparable to earlier periods. The company said the figures for revenue, Ebitda and key performance indicators for Q1 and Q2 FY19 are pro-forma figures and presented as if Vodafone Idea was a merged entity from April 1, 2018.
Accordingly, revenue during the quarter at Rs 12,024 crore was down 7.1% sequentially, while Ebitda at Rs 980 crore was down 28.7%. The margin at 8.1% was lower than 10.6% in the preceding quarter.
The company said that though headline tariffs remained stable during the quarter with customers moving to lower bundled offers, Arpu dropped to Rs 88, down 4.7% compared to the preceding quarter. This is the lowest compared to Jio’s Rs 131.7 and Bharti’s Rs 101. The company also lost 13 million customers during the quarter.
While at the time of merger there was no announcement on fundraising, the company on Wednesday said that the board of directors has established a committee of board members to evaluate a potential capital raise of up to Rs 25,000 crore. Of this, the promoter shareholders, Vodafone Group and Aditya Birla Group have indicated that they would contribute up to Rs 18,250 crore — Vodafone Rs 11,000 crore and AV Birla Rs 7,250 crore.
“The committee will be evaluating various options including, but not limited to, a rights issue, qualified institutional placement and/or a preferential share issue. It is currently expected that any capital raise, if approved, is expected to complete in Q4 FY2019,”
Additionally, a company statement said that Vodafone Idea has decided to actively explore potential sale of its fibre network assets consisting of over 1.56 lakh km of intra- and inter-city fibre routes in order to provide further balance sheet flexibility, and several parties have indicated a potential interest in acquiring these.
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