Related
Related Companies
NSE
BSE
New Delhi: Provision for statutory dues and mounting losses have driven Vodafone Idea’s net worth to negative Rs 19,500 crore at June end, pushing the telco's stocks to open over 7% lower.
“The company made additional AGR (adjusted gross revenue) provisions amounting to Rs 199 billion, and posted a net loss of Rs 255 billion, as a result of which the net worth turned negative and stands at (-) Rs 195 billion,” brokerage firm UBS said in a report on Friday, meaning the company’s liabilities exceed its assets.
The house added that exceptional costs in Q1 included Rs 19,440 crore relating to total estimated AGR dues, Rs 123 crore as one time spectrum charge and Rs 3.70 crore as merger related costs.
The company’s stock plunged 7.3% in the opening trade on Friday but has recovered since. It was trading 2.18% lower at Rs 8.07 per share during morning trade on Friday.
The telco needs to pay around Rs 50,400 crore more to the telecom department in license fee, spectrum usage charges (SUC), interest and penalties. The top court has reserved its order on whether telcos will be allowed to stagger their payment over a timeframe. The case is scheduled to be heard on August 10.
“Our key concern is undercutting capex to conserve cash. While qoq capex decline is understandable given the Covid impact, the extent is surprising and we see structural risks,” Bank of America Merrill Lynch said in a note.
Vodafone Idea cut capex by almost 67% to Rs 600 crore compared to Rs 1,820 crore for the preceding quarter.
Thursday, Vodafone Idea posted a net loss of Rs25,460 crore for the fiscal first quarter, its eighth successive three-month period in the red. Consolidated revenue fell 9% to Rs 10,659 crore while earnings before interest, tax, depreciation and amortization rose 14% due to one-off benefit of Rs.300 crore related to network costs, license Fees and SUC charges.
UBS said Vodafone Idea posted a weak set of results with ARPU (average revenue per user) decline and further market share losses while the AGR issue remains an overhang on the stock.
Bank of America (BofA) said Vodafone Idea once again underperformed peers in revenue as well as key performance indicators.
During the April-June period, the telco lost 11.3 million subscribers including 1 million 4G subscribers. ARPU was down 5.8% on-quarter to Rs 114 from Rs 121 against corresponding ARPU gain by rivals Bharti Airtel (Rs 157) and Reliance Jio (Rs 140).
“The company made additional AGR (adjusted gross revenue) provisions amounting to Rs 199 billion, and posted a net loss of Rs 255 billion, as a result of which the net worth turned negative and stands at (-) Rs 195 billion,” brokerage firm UBS said in a report on Friday, meaning the company’s liabilities exceed its assets.
The house added that exceptional costs in Q1 included Rs 19,440 crore relating to total estimated AGR dues, Rs 123 crore as one time spectrum charge and Rs 3.70 crore as merger related costs.
The company’s stock plunged 7.3% in the opening trade on Friday but has recovered since. It was trading 2.18% lower at Rs 8.07 per share during morning trade on Friday.
The telco needs to pay around Rs 50,400 crore more to the telecom department in license fee, spectrum usage charges (SUC), interest and penalties. The top court has reserved its order on whether telcos will be allowed to stagger their payment over a timeframe. The case is scheduled to be heard on August 10.
“Our key concern is undercutting capex to conserve cash. While qoq capex decline is understandable given the Covid impact, the extent is surprising and we see structural risks,” Bank of America Merrill Lynch said in a note.
Vodafone Idea cut capex by almost 67% to Rs 600 crore compared to Rs 1,820 crore for the preceding quarter.
Thursday, Vodafone Idea posted a net loss of Rs25,460 crore for the fiscal first quarter, its eighth successive three-month period in the red. Consolidated revenue fell 9% to Rs 10,659 crore while earnings before interest, tax, depreciation and amortization rose 14% due to one-off benefit of Rs.300 crore related to network costs, license Fees and SUC charges.
UBS said Vodafone Idea posted a weak set of results with ARPU (average revenue per user) decline and further market share losses while the AGR issue remains an overhang on the stock.
Bank of America (BofA) said Vodafone Idea once again underperformed peers in revenue as well as key performance indicators.
During the April-June period, the telco lost 11.3 million subscribers including 1 million 4G subscribers. ARPU was down 5.8% on-quarter to Rs 114 from Rs 121 against corresponding ARPU gain by rivals Bharti Airtel (Rs 157) and Reliance Jio (Rs 140).