Vodafone Idea (IDEA) Q4 06/07 earnings summary

Executive summary

• FY07 consolidated revenue rose 47% to Rs 43,873 mn and net profit increased 137% to Rs 5,022 mn; subscriber base nearly doubled to 14.01 mn.

• Expansion into three new service areas and network growth supported scale-up, while new-area launches reduced operating margin to 34% from 36%.

Financial highlights

• Consolidated revenue Rs 43,873 mn, up 47% YoY; EBITDA Rs 14,862 mn, up 36.8%; net profit Rs 5,022 mn vs Rs 2,118 mn.

• PBT Rs 5,093 mn, up 132%; tax charge Rs 70 mn, largely Fringe Benefit Tax; net profit margin 11.4%.

• Consolidated EPS was Rs 2.19 basic and Rs 2.15 diluted vs Rs 0.74 for both measures in FY06.

• Capex was Rs 28,367 mn; cash outflow for fixed and intangible assets, including CWIP, was Rs 22,819 mn.

Outlook and guidance

• Mobile telecom was expected to sustain high growth; priorities were to strengthen existing service areas, expand into new areas and maintain service quality and brand strength.

• Growth expectations were subject to domestic demand and pricing, government regulation, tax-law changes and other market conditions.