Vodafone Idea reiterated during its earnings that the company’s ability as a going concern depends on the Supreme Court’s decision in the AGR matter.

Vodaone Idea posts huge loss for Q4Picxy.com
Money Earnings Wednesday, July 01, 2020 - 12:08

Vodafone Idea’s losses before tax for the January-March quarter of FY20 stood at Rs 11,643 crore, up from Rs 6,438 crore in the Q3. This includes a one-time adjustment toward Adjusted Gross Revenue (AGR) dues. It also lost 34.67 lakh subscribers in the month of February alone. 

Vodafone Idea’s revenue rose 6% to Rs 11,750 crore. This comes after all three major telecom operators increased their tariffs, leading to an increase in ARPU (Average Revenue Per User). For Vodafone Idea, the ARPU increased from Rs 109 to Rs 121. 

The subscriber base declined to 29.1 crore in Q4 from 30.4 crore in Q3. “Subscriber churn remained stable in Q4FY20 at 3.3%,” Vodafone Idea said. 

Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter increased to Rs 4380 crore vs Rs 1280 crore in Q3, showing a quarter-on-quarter increase of 28.1%. 

EBITDA margin also improved from 11.6% in Q3 to 18.01% in Q4.

Net debt stood at Rs 1,12,520 crore, up from Rs 1,03,310 crore in Q3.

Vodafone Idea reiterated during its earnings that the company’s ability as a going concern depends on the Supreme Court’s decision in the AGR matter. “...to continue as going concern is essentially dependent on a positive outcome of the application before the Hon’ble Supreme Court for the payment in installments and successful negotiations with lenders,” it said. 

It made provisions of Rs 1,783 crore towards licence fees and spectrum user charges in the AGR case. It also provisioned Rs 3,887 crore due to one-time spectrum charges as an exceptional item.

Vodafone Idea said that it has already made payments of over Rs 6,800 crore in three instalments during the quarter ended March 31, 2020 towards its AGR dues.

The hearing in the case will come up next in the third week of this month.

Presently, the Supreme Court has asked telecom companies to file an affidavit explaining the time they need to clear their remaining dues following the court’s October 2019 verdict. 

The apex court had also asked telecom firms to file an affidavit explaining the time needed by them to clear the remaining statutory dues that arose from the court's verdict, which included non-telecom revenues in the definition of AGR for calculating the amount due to the government.

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