Vodafone Idea Reports Rs 6,439 Crore Loss For Q3; Fears Business Closure

Vodafone Idea on Thursday posted a loss of Rs 6,453.2 crore for the December-ended quarter on account of high cost and liability towards AGR dues. In the previous quarter, the telecom operator had reported its biggest-ever loss of Rs Rs 50,898 crore.

The company's revenue during the quarter rose by 2.3 percent from September-end with support from strong growth in 4G additions, it said. Further, its average daily revenue (ADR) returned to growth after 14 quarters of decline (except Q4FY19). Vodafone Idea's subscriber stood at 104.2 million at the end of December with 8.3 million net 4G additions during the quarter.

In the notes related to the financial results, Vodafone Idea expressed its uncertainty over carrying on business on account of adjusted gross revenue (AGR) judgement of the Supreme Court against telcos and increased difficulty to raise funds amid credit rating downgrade.

It has recognised Rs 52.8 crore as "Exceptional Items" as the net impact of AGR dues to the Department of Telecom. Further, as of 31 March 2019, the company had classified Rs 10,206.2 crore from non-current borrowings to current maturities of long-term debt for not meeting certain covenant clauses under the financial agreements for specified financial ratios.

"During the quarter, the credit rating of certain borrowings have been revised to "BBB-. As a result certain lenders have asked for increase of interest rates for which the Company is in discussion with such lenders," it said.

The company further said that "material uncertainty exists that cast significant doubt on the Company's ability to continue as a going concern and its ability to generate the cash flow that it needs to settle, or refinance its liabilities including those relating to SC AGR judgement and guarantees as they fall due."

"The Company's ability to continue as a going concern is essentially dependent on a positive outcome of the application for modification of Supplementary Order before the Hon'ble Supreme Court and subsequent agreement with DoT for the payment in installments after some moratorium and other reliefs. Pending the outcome of the above matters, the financial results have been prepared on a Going Concern Basis," it added.