NEW DELHI: Beleaguered telecom major Vodafone Idea Ltd (VIL) on Thursday reported a widening of its net loss for the third quarter, as a sharp fall in its customer base impacted revenues and higher finance costs and depreciation costs took large chunks out of its bottom line.
The company, which faces mammoth liabilities arising from the AGR verdict, has also reiterated that its ability to continue as a going concern depends on relief from Supreme Court and the Centre.
VIL’s net loss during the quarter ended December 31, 2019 (Q3FY20) was Rs 6,438.8 crore compared to Rs 5,004.6 in the same period last year. While its Q3FY20 numbers are a big improvement over the Rs 50,922 crore loss posted in Q2FY20, this is primarily due to the sharp decline in provisions set aside to meet AGR liabilities: going from a net Rs 25,678 crore to just Rs52.8 crore.
Setting aside the impact of AGR dues, VIL’s performance during the third quarter raises concerns. The company has recorded 5.74 per cent fall in revenue from operations YoY, though this has increased 2.3 per cent compared to Q2FY20.
The revenue fall comes despite a sharp rise in tariffs due to the substantial decline in its user base in this period. The company shed a net of 7 million subscribers during the quarter compared to the previous one.
However, the company noted that its average revenue per user has improved from Rs 107 in Q2FY20 to Rs 109 now.
“We recorded consistent revenue turnaround from September… The tariff increase effective December should further help improving revenues,” said MD and CEO Ravinder Takkar. Despite its optimism over improving operational performance, VIL said its survival depends on relief from the SC and Centre.
“Our ability to continue as a going concern is dependent on positive outcome of (modification petition before SC) and subsequent agreement with DoT for payment in installments after some moratorium and other reliefs,” it said.
SC to hear AGR pleas
The Supreme Court is likely to hear modificatory petitions filed by Bharti Airtel, Vodafone Idea and Tata Teleservices over its AGR (Adjusted Gross Revenue) verdict on Friday, according to a notification uploaded on the apex court’s website.
Nestle profit up 38.4 per cent
Nestle India on Thursday cited 38.40 per cent increase in net profit at Rs473.02 crore for the quarter ended December 2019, helped by volume growth. The firm, which follows January-December fiscal, had posted a net profit of Rs341.76 crore in the same quarter a year ago.