BackVodafone drops 29% on wider loss, revenue drop
The stock touched an all time low of ₹6.60 a shareSo far this year, the company has lost 70%
PremiumMumbai: Shares of Vodafone Idea Ltd on Monday slumped nearly 29% to hit record low after the company reported wider than expected net loss for the June quarter. This was the fourth consecutive quarter when the firm reported a loss.
The stock touched an all time low of ₹6.60 a share and fell as much as 28.65%. At 11.58 am, the scrip was traded at ₹6.75 on BSE, down 27.46% from its previous close. So far this year it is down 70%.
The company posted a loss of ₹4,873.90 crore from ₹4,881.90 crore a quarter ago. That was higher than expected a loss of ₹3,247 crore, according to a Bloomberg poll.
Revenue fell 4.3% from a quarter ago to ₹11,270 crore. The revenue miss was due to lower-than-expected average revenue per user (ARPU), which grew a mere 4% quarter on quarter to ₹108, with a 9% quarter on quarter decline in the average subscriber base.
EBITDA, which is earning before interest, tax, depreciation and amortization, was 20% lower than estimate. The Ebitda miss was driven entirely by the fall in revenue even as the company continued to realise cost synergies in line with expectations.
Operating metrics remained weak, with 14 million subscriber loss, 3 million data subscriber loss, and a limited 0.3 million additions to the 3G/4G subscriber base. Also, despite the rights issue, gearing remains high at 20x Ebitda. Analysts believe another infusion may be required in six quarters.
According to Brokerage firm JM Financial to stabilise Vodafone’s share price and reverse its gradual slide towards the point of no return, three things need to happen -- quick expansion in 4G coverage to win back mindshare and boost MBB net adds, fibre monetisation for raising ₹12,000-13,000 crore— ensure funding till Dec’20, and significant government intervention aimed at preserving a three-player mobile market (ex PSUs).
For the quarter, cash loss was ₹5,100 crore (excluding working capital) and net debt stood at ₹99,300, down by ₹19,000 crore on rise in cash balance from rights issue proceeds of ₹25,000 crore. The firm incurred a capex of ₹2,840 crore (25.2% of revenues).
It has reduced 2G cell sites by 5,900 taking total sites to 187,000. It has expanded mobile broadband towers by 1,700 with 3G/4G presence on 84% of 2G sites, and increased mobile broadband BTS count by 21,000 to 393,000.
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