Vodafone Idea (IDEA) Q4 09/10 earnings summary

Executive summary

• FY10 consolidated revenue grew 23.1% YoY to Rs.124,990 mn, while EBITDA rose 22% to Rs.34,591 mn and net profit increased 8.2% to Rs.9,539 mn.

• Subscriber base reached 63.82 mn, up 48.4% YoY; nationwide revenue market share was 12.4% for FY10, versus 11.1% in FY09.

• Operations expanded nationwide following service launches in seven additional areas; 3G spectrum was secured in 11 service areas covering 81% of national revenue.

Financial highlights

• Consolidated total revenue Rs.124,990 mn vs Rs.101,544 mn YoY; service revenue Rs.123,650 mn and other income Rs.1,011 mn.

• EBITDA Rs.34,591 mn, up 22% YoY; operating expenses Rs.90,399 mn vs Rs.73,179 mn.

• EBIT Rs.14,442 mn vs Rs.14,336 mn; profit before tax Rs.10,754 mn, up 14.5%; net profit Rs.9,539 mn vs Rs.8,816 mn.

• Cash profit from operations Rs.30,555 mn, up 31.1%; operating cash flow Rs.25,421 mn vs Rs.22,642 mn.

• Capital expenditure was Rs.39,814 mn; consolidated fixed-asset purchases and CWIP were Rs.41,580 mn.

Outlook and guidance

• Outlook called for stronger competitive positioning through leadership in incumbent areas and a calibrated, measured approach to newer service areas.

• Management viewed the overcapacity-led price war as unsustainable, with below-cost tariffs expected eventually to phase out; strong operators were positioned for long-term sector opportunities.

• Pan-India ISP licensing was expected to enable a broader range of enterprise services nationally.