Indus Shares Plunge After First Quarter Net Profit Slumps; dues from 1 telco bites, Telecom News, ET Telecom

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New Delhi: Shares of Indus Towers on Wednesday fell nearly 7% at the open of trade a day after reporting a 66% year-on-year and 73.6% sequential decline in net profit, due to receivables owed to the company by one of its main customers.

Shares of the telecommunications tower company – among the largest in the world – fell 5% to Rs 208.25 in early trading on Wednesday.

Jointly owned by Bharti Airtel and Britain’s Vodafone Group, the telecom tower company reported net profit of Rs 477 crore compared to Rs 1,415 crore a year ago and Rs 1,828.5 crore in the March quarter.

Consolidated revenue for the quarter also declined by 3% QoQ but increased by 1% YoY to Rs 6,989.8 crore. However, the company’s operating cash flow fell 60% year on year to Rs 807 crore.

Indus Towers added 1,027 new towers in the previous quarter, bringing its total number of towers to 1,86,474 in the quarter ended June 30 in 22 out of 23 telecom circles in India. The company also added 591 new colocations from the June quarter, bringing the total to 3,36,382.

However, the company’s share revenue per turn per month decreased by 11.4% quarterly and 2.9% annually to Rs 75,888. Sharing revenue per sharing operator per month also declined by 11.2% quarterly and 2% annually to Rs 41,879.

Indus attributed the decline in finances to part of the receivables owed by one of the main customers, which analysts said was likely cash-strapped Vodafone Idea. This, while the company’s energy expenditure jumped 5.3% and operating expenses rose 18.2%.

“Our financial performance is the result of our prudent accounting practice as our receivables are under stress due to the financial condition of one of our major customers,” outgoing Managing Director and CEO Bimal Dayal said in a statement. Press.

Indus indicated that the customer has informed the company that a financing plan is being finalized with its lenders and has offered a payment plan to the company where it has agreed to pay part of the amount to be invoiced. until the end of the year and 100% of the amount invoiced thereafter.

The remaining dues she offered to pay between January 2023 and July 2023. The proposal is under consideration by the company, said the report by Deloitte’s auditor who audited the company’s financial statements.

Jointly owned by Bharti Airtel and Britain’s Vodafone Group, the telecom tower company reported net profit of Rs 477 crore compared to Rs 1,415 crore a year ago and Rs 1,828.5 crore in the March quarter.

The auditor’s report further indicates that the company had accepted the payment plan and modification of its security arrangements proposed by one of Vi’s promoters for the clearance of arrears.

Pursuant to the agreement, Vodafone has assigned all principal shares pledged over shares issued by it to be used exclusively to settle the company’s unpaid dues.

In addition, Indus has a secondary pledge on the remaining shares of Vodafone and a corporate guarantee provided by the promoters of Vi which could be triggered, but which is however not sufficient to cover the total outstanding contributions.

Commenting on the renewed agreements, Indus said the two clients have agreed to renew the co-leases for a period of 10 years, thereby ensuring long-term commitment and revenue for the company, while retaining the ability to leave until 9% of sites with no exit penalty. .

However, the renewed agreements have been extended at competitive prices and terms for customers, which “likely to result in a marginal reduction in the company’s revenue from April 2022 on a like-for-like basis.

However, Indus expects additional demand revenue from the upcoming launch of 5G services to offset the reduced revenue.

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