Vodafone Idea (IDEA) Q4 08/09 earnings summary

Executive summary

• FY09 consolidated revenue rose 50.7% YoY to Rs 101.544bn; net profit was Rs 8.816bn, down from Rs 10.423bn in FY08.

• Subscriber base increased 79.3% to 43.02m, while national subscriber market share rose to 11%.

• Consolidated results included Spice from Oct. 16, 2008; FY08 comparisons are not fully comparable after consolidation of additional subsidiaries and joint ventures.

Financial highlights

• Consolidated EBITDA was Rs 28.364bn vs Rs 22.693bn YoY; operating expenses were Rs 73.179bn vs Rs 44.682bn.

• Consolidated EBIT was Rs 14.337bn, PBT Rs 9.391bn and net profit Rs 8.816bn; FY08 net profit was Rs 10.423bn.

• Cash profit from operations was Rs 23.313bn, up 17.5% YoY; capital expenditure was Rs 66.857bn on a standalone basis.

• Consolidated operating cash flow was Rs 22.642bn; investing cash outflow was Rs 100.235bn, including Spice share purchases and network investment.

Outlook and guidance

• Competitive intensity and sector overcapacity were expected to pressure tariffs and margins; management expected market forces to gradually reduce overcapacity.

• Strategy focused on scale and 900 MHz spectrum in established areas, with a disciplined, measured approach in newer service areas.

• Strong operators were expected to retain attractive long-term growth opportunities; planned 3G spectrum auctions offered new revenue streams but required additional cash outlay.