ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri (NYSE:TKC) (BIST:TCELL):
- Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated.
-
We have three reporting segments:
- "Turkcell Turkey" which comprises all of our telecom related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires.
- “Turkcell International” which comprises all of our telecom related businesses outside of Turkey.
- “Other subsidiaries” which is mainly comprised of our information and entertainment services, call center business revenues, financial services revenues and inter-business eliminations. Turkcell Ödeme ve Elektronik Para Hizmetleri A.Ş., our subsidiary responsible for payment services, was previously reported under Turkcell Turkey but with effect from the first quarter of 2019 is now included in “Other Subsidiaries”. We made this change due to the fact that its non-group revenues, which are not telco related, and consumer finance business related revenues now comprise the majority of its total revenues. All figures presented in this document for prior periods have been restated to reflect this change.
- In this press release, a year-on-year comparison of our key indicators is provided and figures in parentheses following the operational and financial results for June 30, 2019 refer to the same item as at June 30, 2018. For further details, please refer to our consolidated financial statements and notes as at and for June 30, 2019, which can be accessed via our website in the investor relations section (www.turkcell.com.tr).
- Selected financial information presented in this press release for the second quarter and half year of 2018 and 2019 is based on IFRS figures in TRY terms unless otherwise stated.
- In accordance with our strategic approach and IFRS requirements, Fintur is classified as ‘held for sale’ and reported as discontinued operations as of October 2016. On December 12, 2018, Turkcell signed a binding agreement and on April 2, 2019 completed the transfer of its shares in Fintur to Sonera Holding B.V., the majority shareholder of Fintur.
- In the tables used in this press release totals may not foot due to rounding differences. The same applies to the calculations in the text.
- Year-on-year and quarter-on-quarter percentage comparisons appearing in this press release reflect mathematical calculation.
FINANCIAL HIGHLIGHTS
TRY million |
Q218 |
Q219 |
y/y% |
H118 |
H119 |
y/y% |
||||||
Revenue |
5,105 |
|
6,191 |
|
21.3 |
% |
9,867 |
|
11,866 |
|
20.3 |
% |
EBITDA1 |
2,134 |
|
2,553 |
|
19.6 |
% |
4,156 |
|
4,834 |
|
16.3 |
% |
EBITDA Margin (%) |
41.8 |
% |
41.2 |
% |
(0.6pp) |
42.1 |
% |
40.7 |
% |
(1.4pp) |
||
EBIT2 |
1,088 |
|
1,287 |
|
18.3 |
% |
2,130 |
|
2,390 |
|
12.2 |
% |
EBIT Margin (%) |
21.3 |
% |
20.8 |
% |
(0.5pp) |
21.6 |
% |
20.1 |
% |
(1.5pp) |
||
Net Income |
415 |
|
465 |
|
12.1 |
% |
916 |
|
1,690 |
|
84.5 |
% |
Net Income excluding Kcell indemnity provision |
415 |
|
526 |
|
26.6 |
% |
916 |
|
1,750 |
|
91.1 |
% |
SECOND QUARTER HIGHLIGHTS
-
Strong financial performance continued:
- Revenues of TRY6,191 million, up 21.3% year-on-year
- EBITDA of TRY2,553 million, with an EBITDA margin of 41.2%
- EBIT of TRY1,287 million, with an EBIT margin of 20.8%
-
Net income at TRY465 million, up 12.1% year-on-year
- Net income of TRY526 million on 26.6% year-on-year growth, excluding recognition of liability in relation to Kcell SPA
- Improved leverage with a 0.3x year-on-year decline to 1.2x
-
Solid set of operational results:
- Mobile postpaid quarterly net additions of 215 thousand
- Mobile ARPU3 growth of 16.6% year-on-year, like-for-like ARPU4 growth of 20.5%
- Record high residential fiber ARPU growth of 17.2% year-on-year
- Digital services downloads of over 180 million
- Multiplay with TV subscriber ratio5 reached 50.8%, up 4.0pp year-on-year
- Data usage of 4.5G users at 8.9GB in June 2019
- 19 million 4.5G compatible smartphones on our network, up 0.5 million quarter-on-quarter
- We revise our EBITDA margin guidance6 for 2019. Accordingly, we now target an EBITDA margin of 39%-41% compared to 38%-40% previously. We maintain our revenue growth target of 17%-19% and operational capex over sales ratio7 target of 16%-18%.
(1) EBITDA is a non-GAAP financial measure. See page 13 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. |
(2) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. |
(3) Excluding M2M |
(4) The ARPU of customers who have stayed with Turkcell for at least 14 months |
(5) Multiplay subscribers with TV: Fiber internet + IPTV users & fiber internet + IPTV + fixed voice users |
(6) Please note that this paragraph contains forward-looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2018 filed with U.S. Securities and Exchange Commission, and in particular, the risk factor section therein. |
(7) Excluding license fee |
For further details, please refer to our consolidated financial statements and notes as at and for June 30, 2019 which can be accessed via our website in the investor relations section (www.turkcell.com.tr). |
COMMENTS BY MURAT ERKAN, CEO
With a focus on the customer and our innovative solutions, we are growing at full speed
As Turkcell Group, we continued our strong double-digit growth in the second quarter. Our consolidated revenues rose 21.3% to TRY6.2 billion, while EBITDA1 increased 19.6% to TRY2.6 billion, achieving a 41.2% EBITDA margin. Net income amounted to TRY465 million on a 12.1% increase. With these results, we generated TRY11.9 billion in revenues and the all-time-high first half net income of TRY1.7 billion.
Our solid financial results on the back of a larger customer base, strong ARPU growth, rising data demand, and the higher usage of our innovative products and services, coupled with our effective cost management, prompt us to revise our EBITDA margin guidance2 upwards to 39% - 41%. We reiterate our revenue growth guidance of 17% - 19% and operational capex to sales ratio3 guidance of 16% - 18%.
Those who prefer Turkcell’s broadband services at the speed of light now number 1.4 million
Our customer-focused innovative campaigns and value propositions were instrumental in the rise of postpaid, fiber and digital services subscribers during the quarter. Postpaid mobile subscribers, whose ARPU is 3 times that of prepaid, rose by 215 thousand in this quarter. Our residential fiber subscribers were at 1.4 million with 15 thousand net additions, while those who also use our TV+ services have reached 50.8%4 of our fiber residential subscriber base.
The strong demand for our innovative fixed wireless access (FWA) product Superbox, available only at Turkcell, has maintained its pace. Superbox, which provides fiber-like speeds at locations not covered by a fiber network, has earned customer appreciation and is now in around 130 thousand households.
Increasing data and digital services usage, upsell to higher tariffs and increased postpaid subscribers have reflected to our ARPU figures. Mobile ARPU5 rose 16.6% year-on-year, reaching TRY40.7. Starting this quarter, we have begun to offer “Comfortable Tariffs” that simplify our customers’ lives. With these hybrid tariffs, a first for the sector, our customers can subscribe as postpaid, and yet consume as if they were prepaid. This solution has gained traction within a short time frame. Half of the subscriptions to these tariffs were new to Turkcell. Meanwhile, our residential fiber ARPU rose by a record high of 17.2% to TRY66.1 on the back of our value proposition renewed early this year, upsell to higher tariffs, and higher multiplay ratio with TV.
We confidently advance in our three strategic focus areas
We have continued to enrich and advance the user experience of our digital services, one of our strategic focus areas. Our digital communication and experience platform BiP, where average daily message traffic has increased fourfold to 300 million in a year, today offers innovative instant translation services in 106 languages. Our digital music platform fizy, where we focus on advertising and brand collaborations, now serves approximately 3.7 million active users. Furthermore, fizy, as well as our digital publication application Dergilik and TV+ offer personalized content recommendations by leveraging AI technology. We will continue to lead the digital transformation of Turkey with our digital services developed by over one thousand Turkcell engineers and developers with our strong infrastructure and data centers.
We have recorded strong revenue growth with our digital business solutions, our second area of strategic focus. In the first half of the year, this business line generated TRY693 million in revenues on 62% growth. We are confident of continuing this trend with our customized solutions for both the private and public sectors, thereby contributing to their digital transformation.
Regarding tech-fin, our third strategic focus area, we have launched a number of new products on Paycell where our aim is to become Turkey’s largest payment platform. Turkcell customers can conveniently top-up their public transportation IstanbulKart on their mobile phones via the Paycell app, with the option of paying through their phone bills. Next, we have made things easier for parents by introducing a “pocket money” feature on Paycell Card, where active users of the latter have increased fourfold over the past six months. Further, by launching the “Cash Card” within the Paycell Card family, we have enabled cash withdrawals. Our Paycell app, downloaded 4 million times to date, has begun to offer 24/7 money transfer with just a phone number. In addition, Paycell has been part of the local meal card initiative, namely Paye Kart, which inherits both public transportation İstanbulKart and meal card features. Paye Kart is accepted at a steadily growing number of sales points.
We support sustainability with our initiatives
We installed our group’s first solar power plant in the Turkish Republic of Northern Cyprus in May as part of our activities in the energy sector. The Northern Cyprus Turkcell Solar Power Plant was completed in just four and a half months thanks to our dedicated efforts. We always act with an awareness of sustainability, considering people, the environment and the economy as a whole. By signing a three-year term sustainability-linked loan agreement of EUR50 million with BNP Paribas in May, we have bridged our sustainability efforts and financing activities. With this loan, we will contribute to sustainable growth by reducing our carbon footprint and delivering on our responsibility to the environment, while reducing our financial costs. Our overarching aim is to safeguard natural resources of the world for future generations, while contributing to sustainable growth. We aim to lead the market in facilitating the greater use of such products, thereby supporting sustainability.
Meanwhile, we have tirelessly worked to position Turkey as a technology producer. Accordingly, we have recently announced the configuration of ASELSAN-produced local 4.5G mobile antennas with the contribution of Turkcell engineers on our live network. A thousand of these antennas, which are also 5G-compatible, will be configured to our network by year-end.
Our leverage ratio has improved
We have continued to strengthen our balance sheet with our prudent finance management and cash generation capability through robust operations. As of the end of June, our net debt to EBITDA ratio had improved yearly by 0.3 times to 1.2x, widening the gap between the comparable universe in our sector.
We are once again the sector leader thanks to our customers’ appreciation
As Turkcell, and in line with our strategic priorities, we are dedicated to offering our customers an unmatched experience driven by innovation and operational excellence. Accordingly, with the appreciation of our customers, we are, once again, the sector leader in terms of total revenues this quarter. Going forward, we will build on our customer-focused approach and contribute to their lives with new smart technologies.
We thank all our colleagues for the part they have played in our success, along with our Board of Directors for their unyielding trust and support. We also express our gratitude to our customers and business partners, who have remained with us throughout our success story.
(1) EBITDA is a non-GAAP financial measure. See page 13 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. |
(2) Please note that this paragraph contains forward-looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2018 filed with U.S. Securities and Exchange Commission, and in particular, the risk factor section therein. |
(3) Excluding license fee |
(4) Multiplay subscribers with TV: Fiber internet + IPTV users & fiber internet + IPTV + fixed voice users |
(5) Excluding M2M |
FINANCIAL AND OPERATIONAL REVIEW
Financial Review of Turkcell Group
Profit & Loss Statement (million TRY) |
Quarter |
Half Year |
||||||||||
Q218 |
Q219 |
y/y% |
H118 |
H119 |
y/y% |
|||||||
Revenue |
5,105.3 |
|
6,191.1 |
|
21.3 |
% |
9,866.9 |
|
11,866.5 |
|
20.3 |
% |
Cost of revenue1 |
(2,345.7 |
) |
(3,018.5 |
) |
28.7 |
% |
(4,480.6 |
) |
(5,748.7 |
) |
28.3 |
% |
Cost of revenue1/Revenue |
(45.9 |
%) |
(48.8 |
%) |
(2.9pp) |
(45.4 |
%) |
(48.4 |
%) |
(3.0pp) |
||
Gross Margin1 |
54.1 |
% |
51.2 |
% |
(2.9pp) |
54.6 |
% |
51.6 |
% |
(3.0pp) |
||
Administrative expenses |
(158.8 |
) |
(184.9 |
) |
16.4 |
% |
(313.1 |
) |
(375.5 |
) |
19.9 |
% |
Administrative expenses/Revenue |
(3.1 |
%) |
(3.0 |
%) |
0.1pp |
(3.2 |
%) |
(3.2 |
%) |
- |
|
|
Selling and marketing expenses |
(404.3 |
) |
(413.4 |
) |
2.3 |
% |
(760.9 |
) |
(816.5 |
) |
7.3 |
% |
Selling and marketing expenses/Revenue |
(7.9 |
%) |
(6.7 |
%) |
1.2pp |
(7.7 |
%) |
(6.9 |
%) |
0.8pp |
||
Net impairment losses on financial and contract assets |
(62.3 |
) |
(21.4 |
) |
(65.7 |
%) |
(156.1 |
) |
(91.8 |
) |
(41.2 |
%) |
EBITDA2 |
2,134.3 |
|
2,552.8 |
|
19.6 |
% |
4,156.2 |
|
4,833.9 |
|
16.3 |
% |
EBITDA Margin |
41.8 |
% |
41.2 |
% |
(0.6pp) |
42.1 |
% |
40.7 |
% |
(1.4pp) |
||
Depreciation and amortization |
(1,046.1 |
) |
(1,265.8 |
) |
21.0 |
% |
(2,025.9 |
) |
(2,443.9 |
) |
20.6 |
% |
EBIT3 |
1,088.2 |
|
1,287.0 |
|
18.3 |
% |
2,130.3 |
|
2,390.0 |
|
12.2 |
% |
EBIT Margin |
21.3 |
% |
20.8 |
% |
(0.5pp) |
21.6 |
% |
20.1 |
% |
(1.5pp) |
||
Net finance income / (costs) |
(486.4 |
) |
(571.7 |
) |
17.5 |
% |
(799.8 |
) |
(992.1 |
) |
24.0 |
% |
Finance income4 |
651.9 |
|
(200.4 |
) |
(130.7 |
%) |
924.9 |
|
334.7 |
|
(63.8 |
%) |
Finance costs4 |
(1,138.2 |
) |
(371.4 |
) |
(67.4 |
%) |
(1,724.8 |
) |
(1,326.8 |
) |
(23.1 |
%) |
Other income / (expense) |
(30.2 |
) |
(73.8 |
) |
144.4 |
% |
(63.7 |
) |
(125.7 |
) |
97.3 |
% |
Non-controlling interests |
(14.4 |
) |
(14.3 |
) |
(0.7 |
%) |
(38.6 |
) |
(34.1 |
) |
(11.7 |
%) |
Share of profit of equity accounted investees |
- |
|
1.0 |
|
n.a |
- |
|
1.7 |
|
n.a |
||
Income tax expense |
(142.2 |
) |
(163.0 |
) |
14.6 |
% |
(312.4 |
) |
(322.7 |
) |
3.3 |
% |
Discontinued operations |
- |
|
- |
|
n.a |
- |
|
772.4 |
|
n.a |
||
Net Income |
415.1 |
|
465.2 |
|
12.1 |
% |
915.8 |
|
1,689.6 |
|
84.5 |
% |
(1) Excluding depreciation and amortization expenses. |
(2) EBITDA is a non-GAAP financial measure. See page 13 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. |
(3) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. |
(4) Fair value loss and interest expense regarding derivative instruments reported under finance cost were netted off from respective fair value gain and interest income regarding derivative instruments reported under finance income starting from Q418. Furthermore, starting from Q219, interest income on financial assets and interest expenses for financial liabilities, both measured at amortized cost, are represented on a net basis. Historical periods were restated to reflect these changes. |
Revenue of the Group grew by 21.3% year-on-year in Q219. This growth was mainly driven by the strong ARPU performance of Turkcell Turkey on the back of increased data consumption and digital services usage, and upsell efforts.
Turkcell Turkey revenues, at 85% of Group revenues, grew by 20.5% to TRY5,261 million (TRY4,366 million).
-
Data and digital services revenues rose by 20.1% to TRY3,399 million (TRY2,830 million).
- On the mobile front, the increasing number and data consumption of 4.5G users, rising digital services usage, price adjustments and upsell to higher ARPU offerings were the main drivers of data and digital services revenue growth.
- On the fixed front, the main drivers were the increased ratio of multiplay subscribers with TV, price adjustments and upsell efforts.
- Equipment revenues rose to TRY613 million (TRY302 million) driven by campaigns that we held in Q219 to support 4.5G smartphone penetration and corporate projects.
- Wholesale revenues rose by 36% to TRY286 million (TRY210 million) on the back of increased carrier traffic and the positive impact of TRY depreciation on FX based revenues.
Turkcell International revenues, constituting 8% of Group revenues, grew by 48.4% to TRY492 million (TRY332 million), driven mainly by the strong ARPU performance of lifecell and positive impact of currency movements.
Other subsidiaries' revenues, at 7% of Group revenues, which includes information and entertainment services, call center revenues and revenues from financial services rose by 7.4% to TRY438 million (TRY408 million).
- We completed the sale of our shares in Azerinteltek, our sports betting business in Azerbaijan, as of January 11, 2019. We received the transfer of proceeds on December 27, 2018 and transferred control of the subsidiary. We did not report any revenues in Q219 in relation to Azerinteltek operations.
- Our consumer finance company’s revenues were at TRY235 million (TRY231 million) in Q219. Revenue growth was impacted by the decline in the consumer loan portfolio, from TRY4.7 billion as of Q218 to TRY3.2 billion as of Q219, due mainly to the installment limitation on consumer loans for telecom devices.
Cost of revenue (excluding depreciation and amortization) increased to 48.8% (45.9%) as a percentage of revenues in Q219. This was due mainly to the rise in cost of equipment sold (4.9pp), despite the decline in other cost items (2.0pp) as a percentage of revenues.
Administrative expenses declined to 3.0% (3.1%) as a percentage of revenues in Q219.
Selling and marketing expenses declined to 6.7% (7.9%) as a percentage of revenues in Q219. This was driven by the fall in marketing expenses (0.8pp) and selling expenses (0.6pp), despite the rise in other cost items (0.2pp) as a percentage of revenues.
Net impairment losses on financial and contract assets declined to TRY21 million (TRY62 million) in Q219.
EBITDA1 rose by 19.6% year-on-year in Q219 leading to an EBITDA margin of 41.2% (41.8%).
- Turkcell Turkey’s EBITDA grew by 15.7% to TRY2,128 million (TRY1,840 million) with an EBITDA margin of 40.5% (42.1%).
- Turkcell International EBITDA2 rose to TRY230 million (TRY122 million) leading to an EBITDA margin of 46.8% (36.9%).
- The EBITDA of other subsidiaries rose by 13.2% to TRY195 million (TRY172 million).
Depreciation and amortization expenses increased by 21.0% in Q219 year-on-year.
Net finance expense increased to TRY572 million (TRY486 million) in Q219 year-on-year. This was driven mainly by higher interest expenses resulting from borrowings and lease obligations. Please note that the Group started to apply hedge accounting as of July 1, 2018 for existing participating cross currency swap and cross currency swap transactions, in accordance with the IFRS 9 hedge accounting requirement. Please see the IFRS report for details.
See Appendix A for details of net foreign exchange gain and loss.
Income tax expense increased 14.6% year-on-year in Q219. Please see Appendix A for details.
Net income of the Group increased by 12.1% to TRY465 million (TRY415 million) in Q219 year-on-year, driven mainly by strong operational performance, despite higher interest expenses resulting from borrowings and lease obligations, and higher depreciation and amortization expenses. Please also note that we booked a provision of TRY60 million in Q219 for recognition of liability in relation to Kcell Share Purchase Agreement regarding the past Kcell transaction. Excluding this provision, our net income would have increased by 26.6% year-over-year in Q219.
Total cash & debt: Consolidated cash as of June 30, 2019 increased to TRY10,687 million from TRY8,888 million as of March 31, 2019 driven mainly by the Fintur proceeds of TRY2,230 million received at the beginning of Q219. Excluding the FX swap transactions for TRY borrowing, 80% of our cash is in US$, 17% in EUR and 3% in TRY.
Consolidated debt as of June 30, 2019 declined to TRY22,062 million from TRY22,867 million as of March 31, 2019. Please note that TRY1,577 million of our consolidated debt is comprised of lease obligations.
(1) EBITDA is a non-GAAP financial measure. See page 13 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income. |
(2) We started to capitalize the frequency usage fees of lifecell in Q418 in accordance with IFRS16. The change was implemented retrospectively for 2018; impact regarding previous quarters of 2018 was booked in Q418. We started to capitalize the frequency usage fees of BeST in Q219 in accordance with IFRS16. The impact regarding Q119 was also booked in Q219. These changes positively impacted Turkcell International EBITDA. |
Consolidated debt breakdown excluding lease obligations:
-- Turkcell Turkey’s debt was at TRY16,300 million, of which TRY9,389 million (US$1,631 million) was denominated in US$, TRY6,132 million (EUR936 million) in EUR, TRY212 million (CNY254 million) in CNY and the remaining TRY567 million in TRY.
-- Our consumer finance company had a debt balance of TRY3,025 million, of which TRY1,631 million (US$283 million) was denominated in US$, and TRY920 million (EUR140 million) in EUR with the remaining TRY474 million in TRY.
-- The debt balance of lifecell was TRY1,136 million, all denominated in UAH.
- TRY826 million of lease obligations is denominated in TRY, TRY25 million (US$4 million) in US$, TRY176 million (EUR27 million) in EUR and the remaining balance in other local currencies (please note that the figures in parentheses refer to US$ or EUR equivalents).
TRY12,343 million of our consolidated debt is set at a floating rate. Excluding consumer finance business borrowings, TRY5,707 million of consolidated debt will mature within less than a year.
Net debt as of June 30, 2019 was at TRY11,375 million with a net debt to EBITDA ratio of 1.2 times. Excluding consumer finance company consumer loans, our telco only net debt was at TRY8,160 million with a leverage of 0.9 times.
Turkcell Group has a long FX position of US$207 million as at the end of Q219. (Please note that this figure takes into account advance payments and hedging, but excludes FX swap transactions for TRY borrowing. Derivatives (VIOP) and forward transactions are included).
Capital expenditures: Capital expenditures, including non-operational items, amounted to TRY1,808 million in Q219. In Q219 and in H119, operational capital expenditures (excluding license fees) at the Group level were at 15.4% and 15.5% of total revenues, respectively.
Capital expenditures (million TRY) |
Quarter |
Half Year |
||||||
Q218 |
Q219 |
H118 |
H119 |
|||||
Operational Capex |
(1,062.4 |
) |
(956.0 |
) |
(1,588.6 |
) |
(1,839.6 |
) |
License and Related Costs |
(137.2 |
) |
(0.5 |
) |
(325.2 |
) |
(1.2 |
) |
Non-operational Capex (Including IFRS15 & IFRS16) |
(384.3 |
) |
(851.3 |
) |
(2,230.1 |
) |
(1,319.6 |
) |
Total Capex1 |
(1,583.8 |
) |
(1,807.8 |
) |
(4,143.9 |
) |
(3,160.4 |
) |
(1) Breakdown of capex for Q218 has been restated |
Operational Review of Turkcell Turkey
Summary of Operational Data |
Q218 |
Q119 |
Q219 |
y/y% |
q/q% |
|||||
Number of subscribers (million) |
37.6 |
|
36.6 |
|
36.8 |
|
(2.1 |
%) |
0.5 |
% |
Mobile Postpaid (million) |
18.8 |
|
18.7 |
|
18.9 |
|
0.5 |
% |
1.1 |
% |
Mobile M2M (million) |
2.5 |
|
2.4 |
|
2.5 |
|
- |
|
4.2 |
% |
Mobile Prepaid (million) |
16.0 |
|
15.0 |
|
15.0 |
|
(6.3 |
%) |
- |
|
Fiber (thousand) |
1,288.5 |
|
1,411.1 |
|
1,426.4 |
|
10.7 |
% |
1.1 |
% |
ADSL (thousand) |
916.7 |
|
861.7 |
|
798.2 |
|
(12.9 |
%) |
(7.4 |
%) |
Superbox (thousand)1 |
8.4 |
|
56.4 |
|
129.8 |
|
n.m. |
130.1 |
% |
|
Cable (thousand) |
- |
|
9.7 |
|
20.3 |
|
n.a. |
109.3 |
% |
|
IPTV (thousand) |
559.9 |
|
632.0 |
|
653.2 |
|
16.7 |
% |
3.4 |
% |
Churn (%)2 |
|
|
|
|
|
|||||
Mobile Churn (%)3 |
1.9 |
% |
1.9 |
% |
2.0 |
% |
0.1pp |
0.1pp |
||
Fixed Churn (%) |
1.5 |
% |
2.0 |
% |
2.1 |
% |
0.6pp |
0.1pp |
||
ARPU (Average Monthly Revenue per User) (TRY) |
|
|
|
|
|
|||||
Mobile ARPU, blended |
32.7 |
|
35.7 |
|
38.1 |
|
16.5 |
% |
6.7 |
% |
Mobile ARPU, blended (excluding M2M) |
34.9 |
|
38.1 |
|
40.7 |
|
16.6 |
% |
6.8 |
% |
Postpaid |
47.1 |
|
50.6 |
|
54.3 |
|
15.3 |
% |
7.3 |
% |
Postpaid (excluding M2M) |
53.7 |
|
57.4 |
|
61.7 |
|
14.9 |
% |
7.5 |
% |
Prepaid |
15.8 |
|
17.2 |
|
17.8 |
|
12.7 |
% |
3.5 |
% |
Fixed Residential ARPU, blended |
55.4 |
|
59.8 |
|
64.2 |
|
15.9 |
% |
7.4 |
% |
Residential Fiber ARPU |
56.4 |
|
62.8 |
|
66.1 |
|
17.2 |
% |
5.3 |
% |
Average mobile data usage per user (GB/user) |
5.0 |
|
5.9 |
|
6.6 |
|
32.0 |
% |
11.9 |
% |
Mobile MoU (Avg. Monthly Minutes of usage per subs) blended |
364.4 |
|
393.1 |
|
416.2 |
|
14.2 |
% |
5.9 |
% |
(1) Superbox subscribers are included in mobile subscribers. |
(2) Presentation of churn figures has been changed to demonstrate average monthly churn figures for the respective quarters. |
(3) In Q117, our churn policy was revised to extend from 9 months to 12 months (the period at the end of which we disconnect prepaid subscribers who have not topped up above TRY10). Additionally, under our revised policy, prepaid customers who last topped up before March will be disconnected at the latest by year-end. |
On the mobile front, our subscriber base expanded by 214 thousand quarterly net additions, reaching 33.9 million in total. We registered 215 thousand quarterly net additions to the postpaid subscriber base during the quarter on the back of value propositions and innovative customer-focused campaigns. Accordingly, our postpaid subscriber base comprised 55.7% (54.1%) of our total subscriber base by the end of Q219.
Our fixed subscriber base stood at 2.2 million as at the end of Q219. Our fiber subscriber base expanded by 15 thousand quarterly and 138 thousand annual net additions. Superbox, our fixed wireless access product, registered quarterly net subscriber additions of 73 thousand and reached 130 thousand in total. IPTV subscribers reached 653 thousand by the end of the quarter on 21 thousand quarterly and 93 thousand annual net additions. Total TV subscribers, including OTT only users, reached 4.5 million4. The Turkcell TV+ mobile application has been downloaded 13.3 million times as at the end of Q219.
In Q219, our average monthly mobile churn rate was at 2.0%, while our average monthly fixed churn rate was at 2.1%.
Mobile ARPU (excluding M2M) grew by 16.6% year-on-year in Q219, driven mainly by increased data consumption per user, rise in digital services usage, upsell efforts and price adjustments.
Residential fiber ARPU rose 17.2% in Q219 year-on-year on the back of upsell performance and price adjustments, as well as multiplay subscribers with TV5, reaching 50.8% of total residential fiber subscribers.
Average mobile data usage per user rose by 32% in Q219 year-on-year driven by increased number and higher data consumption of 4.5G users, as well as rich digital service offerings. Accordingly, the average mobile data usage of 4.5G users reached 8.2GB in Q219 and 8.9GB in June.
In Q219, we continued our efforts to increase the 4.5G compatible smartphones on our network. Accordingly, 4.5G compatible smartphones reached 19 million on 0.5 million quarterly additions to 83% of total smartphones.
(4) IPTV users and OTT only cumulative active users |
(5) Multiplay subscribers with TV: Fiber internet + IPTV users & fiber internet + IPTV + fixed voice users |
TURKCELL INTERNATIONAL
lifecell1 Financial Data |
Quarter |
Half Year |
||||||||||
Q218 |
Q219 |
y/y% |
H118 |
H119 |
y/y% |
|||||||
Revenue (million UAH) |
1,276.5 |
|
1,481.9 |
|
16.1 |
% |
2,484.4 |
|
2,897.4 |
|
16.6 |
% |
EBITDA (million UAH) |
563.7 |
|
798.8 |
|
41.7 |
% |
1,068.6 |
|
1,614.3 |
|
51.1 |
% |
EBITDA margin (%) |
44.2 |
% |
53.9 |
% |
9.7pp |
43.0 |
% |
55.7 |
% |
12.7pp |
||
Net income / (loss) (million UAH) |
(206.7 |
) |
(293.2 |
) |
41.8 |
% |
(384.9 |
) |
(560.4 |
) |
45.6 |
% |
Capex (million UAH) |
1,648.1 |
|
350.0 |
|
(78.8 |
%) |
4,236.8 |
|
707.8 |
|
(83.3 |
%) |
Revenue (million TRY) |
207.7 |
|
324.3 |
|
56.1 |
% |
375.7 |
|
600.1 |
|
59.7 |
% |
EBITDA (million TRY) |
98.8 |
|
174.8 |
|
76.9 |
% |
168.6 |
|
333.8 |
|
98.0 |
% |
EBITDA margin (%) |
47.6 |
% |
53.9 |
% |
6.3pp |
44.9 |
% |
55.6 |
% |
10.7pp |
||
Net income / (loss) (million TRY) |
(34.2 |
) |
(64.0 |
) |
87.1 |
% |
(59.1 |
) |
(116.1 |
) |
96.4 |
% |
(1) Since July 102015 we hold a 100% stake in lifecell. |
lifecell (Ukraine) revenues grew by 16.1% year-on-year in Q219 in local currency terms, driven mainly by increased mobile data revenues with rising number and mobile data usage of 4.5G subscribers. EBITDA in local currency terms rose by 41.7% year-on-year to UAH799 million, which resulted in an EBITDA margin of 53.9%. Please note that starting from Q418, lifecell started to capitalize its radio frequency usage costs in accordance with IFRS16. The overall impact, including the retrospective adjustments for previous quarters of 2018, was booked in Q418.
lifecell revenues in TRY terms grew by 56.1% year-on-year, while its EBITDA rose to TRY175 million leading to an EBITDA margin of 53.9% in Q219.
lifecell Operational Data |
Q218 |
Q119 |
Q219 |
y/y% |
q/q% |
||
Number of subscribers (million)2 |
10.1 |
9.4 |
9.2 |
(8.9 |
%) |
(2.1 |
%) |
Active (3 months)3 |
7.8 |
6.9 |
6.8 |
(12.8 |
%) |
(1.4 |
%) |
MOU (minutes) (12 months) |
147.4 |
141.4 |
147.4 |
- |
|
4.2 |
% |
ARPU (Average Monthly Revenue per User), blended (UAH) |
41.7 |
49.0 |
53.1 |
27.3 |
% |
8.4 |
% |
Active (3 months) (UAH) |
55.5 |
66.7 |
72.5 |
30.6 |
% |
8.7 |
% |
(2) We may occasionally offer campaigns and tariff schemes that have an active subscriber life differing from the one that we normally use to deactivate subscribers and calculate churn. |
(3) Active subscribers are those who in the past three months made a revenue generating activity. |
lifecell’s three-month active subscriber base declined to 6.8 million in Q219, mainly due to the declining multiple SIM card usage trend in the country. lifecell continued its strong ARPU performance in Q219. Accordingly, ARPU of its 3-month active users grew 30.6% year-over-year on the back of increased mobile data consumption and price adjustments. Meanwhile, lifecell pursued its upsell efforts and continued to attract high ARPU generating subscribers leveraging the quality of its 4.5G and 3G networks and attractive digital services, which supported the solid ARPU performance.
lifecell continued to penetrate its 4.5G services within its customer base in Q219 as reflected by 3-month active 4.5G users, which reached 40% of total mobile data users, which led to increased data consumption. Accordingly, average data consumption per user rose by 89% year-on-year. Reaching 78% smartphone penetration, lifecell continued its leadership of the Ukrainian market as at the end of Q219. Furthermore, Mobile Number Portability was introduced on May 1st, which we consider an important step towards further strengthening fair competitive environment.
In line with Turkcell’s global digital services strategy, lifecell continued its focus on rising the penetration of its digital services within its customer base. lifecell continued to enrich its digital services portfolio and digital packages to better meet its customer needs and held several campaigns to attract new users. Accordingly, the number of three-month active digital services users reached 1.5 million in Q219.
BeST1 |
Quarter |
Half Year |
||||||||||
Q218 |
Q219 |
y/y% |
H118 |
H119 |
y/y% |
|||||||
Number of subscribers (million) |
1.6 |
|
1.5 |
|
(6.3 |
%) |
1.6 |
|
1.5 |
|
(6.3 |
%) |
Active (3 months) |
1.2 |
|
1.1 |
|
(8.3 |
%) |
1.2 |
|
1.1 |
|
(8.3 |
%) |
Revenue (million BYN) |
30.6 |
|
33.7 |
|
10.1 |
% |
59.8 |
|
65.6 |
|
9.7 |
% |
EBITDA (million BYN) |
4.4 |
|
11.1 |
|
152.3 |
% |
9.7 |
|
18.5 |
|
90.7 |
% |
EBITDA margin (%) |
14.4 |
% |
32.9 |
% |
18.5pp |
16.1 |
% |
28.2 |
% |
12.1pp |
||
Net loss (million BYN) |
(10.3 |
) |
(8.5 |
) |
(17.5 |
%) |
(20.3 |
) |
(17.3 |
) |
(14.8 |
%) |
Capex (million BYN) |
3.9 |
|
20.4 |
|
423.1 |
% |
33.4 |
|
31.2 |
|
(6.6 |
%) |
Revenue (million TRY) |
65.4 |
|
94.1 |
|
43.9 |
% |
122.0 |
|
173.6 |
|
42.3 |
% |
EBITDA (million TRY) |
10.5 |
|
31.1 |
|
196.2 |
% |
20.8 |
|
49.5 |
|
138.0 |
% |
EBITDA margin (%) |
16.0 |
% |
33.0 |
% |
17.0pp |
17.0 |
% |
28.5 |
% |
11.5pp |
||
Net loss (million TRY) |
(22.1 |
) |
(23.7 |
) |
7.2 |
% |
(41.5 |
) |
(45.6 |
) |
9.9 |
% |
(1) BeST in which we hold an 80% stake has operated in Belarus since July 2008. |
BeST revenues rose by 10.1% year-on-year in Q219 in local currency terms, driven mainly by growth in mobile data revenues with the increasing penetration of 4G subscribers. Device sales revenues also contributed to topline growth. BeST’s EBITDA increased to BYN11.1 million, which led to an EBITDA margin of 32.9% in Q219. Please note that we started to capitalize the frequency usage fees of BeST in Q219 in accordance with IFRS16, which had a positive impact on EBITDA. The impact regarding Q119 was also booked in Q219.
BeST’s revenues in TRY terms increased by 43.9% year-on-year in Q219, with an EBITDA margin of 33.0%.
Penetration of 4G services continued to increase within BeST’s subscriber base during Q219. Accordingly, 4G users reached 44% of 3-month active subscriber base, which led to increased data consumption and digital services usage. The average monthly data consumption of subscribers grew by 70% year-over-year to 6.4GB in Q219. BeST continued to enrich its digital services portfolio and increased the penetration of these services, which supported ARPU growth and subscriber retention. Subscribers who use at least one digital service comprised 24% of the 3-month active subscriber base.
Kuzey Kıbrıs Turkcell2 (million TRY) |
Quarter |
Half Year |
||||||||||
Q218 |
Q219 |
y/y% |
H118 |
H119 |
y/y% |
|||||||
Number of subscribers (million) |
0.5 |
|
0.6 |
|
20.0 |
% |
0.5 |
|
0.6 |
|
20.0 |
% |
Revenue |
45.2 |
|
51.6 |
|
14.2 |
% |
88.7 |
|
99.5 |
|
12.2 |
% |
EBITDA |
17.2 |
|
19.2 |
|
11.6 |
% |
31.3 |
|
36.0 |
|
15.0 |
% |
EBITDA margin (%) |
38.0 |
% |
37.3 |
% |
(0.7pp) |
35.2 |
% |
36.1 |
% |
0.9pp |
||
Net income |
10.1 |
|
5.4 |
|
(46.5 |
%) |
15.4 |
|
13.0 |
|
(15.6 |
%) |
Capex |
8.1 |
|
13.0 |
|
60.5 |
% |
23.3 |
|
23.6 |
|
1.3 |
% |
(2) Kuzey Kıbrıs Turkcell in which we hold a 100% stake has operated in Northern Cyprus since 1999. |
Kuzey Kıbrıs Turkcell revenues rose by 14.2% year-on-year in Q219, driven mainly by the growth in mobile data revenues. EBITDA increased by 11.6%, which resulted in an EBITDA margin of 37.3%.
Fintur In accordance with our strategic approach and IFRS requirements, Fintur is classified as ‘held for sale’ and reported as discontinued operations as of October 2016.
On December 12, 2018, Turkcell signed a binding agreement and on April 2, 2019 completed the transfer of its shares in Fintur to Sonera Holding B.V., the majority shareholder of Fintur. The final value of the transaction was EUR352.9 million. As the conditions precedent required for the share transfer were completed within Q119, TRY772 million profit generated from the transaction is reflected in the Q119 financial statements.
We booked a provision of TRY60 million in Q219 for recognition of liability in relation to the Kcell Share Purchase Agreement regarding past Kcell transaction.
Turkcell Group Subscribers
Turkcell Group subscribers amounted to approximately 48.2 million as of June 30, 2019. This figure is calculated by taking the number of subscribers of Turkcell Turkey and each of our subsidiaries. It includes the total number of mobile, fiber, ADSL, cable and IPTV subscribers of Turkcell Turkey, and the mobile subscribers of lifecell and BeST, as well as those of Kuzey Kıbrıs Turkcell and lifecell Europe.
Turkcell Group Subscribers |
Q218 |
Q119 |
Q219 |
y/y% |
q/q% |
||
Mobile Postpaid (million) |
18.8 |
18.7 |
18.9 |
0.5 |
% |
1.1 |
% |
Mobile Prepaid (million) |
16.0 |
15.0 |
15.0 |
(6.3 |
%) |
- |
|
Fiber (thousand) |
1,288.5 |
1,411.1 |
1,426.4 |
10.7 |
% |
1.1 |
% |
ADSL (thousand) |
916.7 |
861.7 |
798.2 |
(12.9 |
%) |
(7.4 |
%) |
Superbox (thousand)1 |
8.4 |
56.4 |
129.8 |
n.m. |
130.1 |
% |
|
Cable (thousand) |
- |
9.7 |
20.3 |
n.a |
109.3 |
% |
|
IPTV (thousand) |
559.9 |
632.0 |
653.2 |
16.7 |
% |
3.4 |
% |
Turkcell Turkey subscribers (million)2 |
37.6 |
36.6 |
36.8 |
(2.1 |
%) |
0.5 |
% |
lifecell (Ukraine) |
10.1 |
9.4 |
9.2 |
(8.9 |
%) |
(2.1 |
%) |
BeST (Belarus) |
1.6 |
1.6 |
1.5 |
(6.3 |
%) |
(6.3 |
%) |
Kuzey Kıbrıs Turkcell |
0.5 |
0.6 |
0.6 |
20.0 |
% |
- |
|
lifecell Europe3 |
0.3 |
0.2 |
0.2 |
(33.3 |
%) |
- |
|
Turkcell Group Subscribers (million) |
50.1 |
48.4 |
48.2 |
(3.8 |
%) |
(0.4 |
%) |
(1) Superbox subscribers are included in mobile subscribers. |
(2) Subscribers to more than one service are counted separately for each service. |
(3) The “wholesale traffic purchase” agreement, signed between Turkcell Europe GmbH operating in Germany and Deutsche Telekom for five years in 2010, had been modified to reflect the shift in business model to a “marketing partnership”. The new agreement between Turkcell and a subsidiary of Deutsche Telekom was signed on August 27, 2014. The transfer of Turkcell Europe operations to Deutsche Telekom’s subsidiary was completed on January 15, 2015. Subscribers are still included in the Turkcell Group Subscriber figure. Turkcell Europe was rebranded as lifecell Europe on January 15, 2018. |
OVERVIEW OF THE MACROECONOMIC ENVIRONMENT
The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below.
|
Quarter |
Half Year |
||||||||||||||
Q218 |
Q119 |
Q219 |
y/y% |
q/q% |
H118 |
H119 |
y/y% |
|||||||||
GDP Growth (Turkey) |
5.3 |
% |
(2.6 |
%) |
n.a. |
n.a |
n.a |
6.3 |
% |
n.a |
n.a |
|||||
Consumer Price Index (Turkey) (yoy) |
15.4 |
% |
19.7 |
% |
15.7 |
% |
0.3pp |
(4.0pp) |
15.4 |
% |
15.7 |
% |
0.3pp |
|||
US$ / TRY rate |
|
|
|
|
|
|
|
|||||||||
Closing Rate |
4.5607 |
|
5.6284 |
|
5.7551 |
|
26.2 |
% |
2.3 |
% |
4.5607 |
|
5.7551 |
|
26.2 |
% |
Average Rate |
4.2639 |
|
5.3378 |
|
5.8478 |
|
37.1 |
% |
9.6 |
% |
4.0358 |
|
5.5928 |
|
38.6 |
% |
EUR / TRY rate |
|
|
|
|
|
|
|
|||||||||
Closing Rate |
5.3092 |
|
6.3188 |
|
6.5507 |
|
23.4 |
% |
3.7 |
% |
5.3092 |
|
6.5507 |
|
23.4 |
% |
Average Rate |
5.0636 |
|
6.0777 |
|
6.5488 |
|
29.3 |
% |
7.8 |
% |
4.8715 |
|
6.3132 |
|
29.6 |
% |
US$ / UAH rate |
|
|
|
|
|
|
|
|||||||||
Closing Rate |
26.19 |
|
27.25 |
|
26.17 |
|
(0.1 |
%) |
(4.0 |
%) |
26.19 |
|
26.17 |
|
(0.1 |
%) |
Average Rate |
26.24 |
|
27.41 |
|
26.73 |
|
1.9 |
% |
(2.5 |
%) |
26.83 |
|
27.07 |
|
0.9 |
% |
US$ / BYN rate |
|
|
|
|
|
|
|
|||||||||
Closing Rate |
1.9898 |
|
2.1285 |
|
2.0433 |
|
2.7 |
% |
(4.0 |
%) |
1.9898 |
|
2.0433 |
|
2.7 |
% |
Average Rate |
1.9975 |
|
2.1470 |
|
2.0967 |
|
5.0 |
% |
(2.3 |
%) |
1.9819 |
|
2.1219 |
|
7.1 |
% |
RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We believe Adjusted EBITDA, among other measures, facilitates performance comparisons from period to period and management decision making. It also facilitates performance comparisons from company to company. Adjusted EBITDA as a performance measure eliminates potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact of changes in effective tax rates on periods or companies) and the age and book depreciation of tangible assets (affecting relative depreciation expense). We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties in evaluating the performance of other mobile operators in the telecommunications industry in Europe, many of which present Adjusted EBITDA when reporting their results.
Our Adjusted EBITDA definition includes Revenue, Cost of Revenue excluding depreciation and amortization, Selling and Marketing expenses, Administrative expenses and Net impairment losses on financial and contract assets, but excludes translation gain/(loss), finance income, finance expense, share of profit of equity accounted investees, gain on sale of investments, minority interest and other income/(expense).
Nevertheless, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for analysis of, our results of operations, as reported under IFRS. The following table provides a reconciliation of Adjusted EBITDA, as calculated using financial data prepared in accordance with IFRS as issued by the IASB, to net profit, which we believe is the most directly comparable financial measure calculated and presented in accordance with IFRS as issued by the IASB.
Turkcell Group (million TRY) |
Quarter |
Half Year |
||||||||||
Q218 |
Q219 |
y/y% |
H118 |
H119 |
y/y% |
|||||||
Adjusted EBITDA |
2,134.3 |
|
2,552.8 |
|
19.6 |
% |
4,156.2 |
|
4,833.9 |
|
16.3 |
% |
Depreciation and amortization |
(1,046.1 |
) |
(1,265.8 |
) |
21.0 |
% |
(2,025.9 |
) |
(2,443.9 |
) |
20.6 |
% |
Finance income |
651.9 |
|
(200.4 |
) |
(130.7 |
%) |
924.9 |
|
334.7 |
|
(63.8 |
%) |
Finance costs |
(1,138.2 |
) |
(371.4 |
) |
(67.4 |
%) |
(1,724.8 |
) |
(1,326.8 |
) |
(23.1 |
%) |
Other income / (expense) |
(30.2 |
) |
(73.8 |
) |
144.4 |
% |
(63.7 |
) |
(125.7 |
) |
97.3 |
% |
Share of profit of equity accounted investees |
- |
|
1.0 |
|
n.a. |
- |
|
1.7 |
|
n.a |
||
Consolidated profit from continued operations before income tax & minority interest |
571.6 |
|
642.4 |
|
12.4 |
% |
1,266.8 |
|
1,274.0 |
|
0.6 |
% |
Income tax expense |
(142.2 |
) |
(163.0 |
) |
14.6 |
% |
(312.4 |
) |
(322.7 |
) |
3.3 |
% |
Consolidated profit from continued operations before minority interest |
429.5 |
|
479.4 |
|
11.6 |
% |
954.5 |
|
951.2 |
|
(0.3 |
%) |
Discontinued operations |
- |
|
- |
|
n.a. |
- |
|
772.4 |
|
n.a. |
||
Consolidated profit before minority interest |
429.5 |
|
479.4 |
|
11.6 |
% |
954.5 |
|
1,723.7 |
|
80.6 |
% |
NOTICE: This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. This includes, in particular, our targets for revenue, EBITDA and capex for 2019. More generally, all statements other than statements of historical facts included in this press release, including, without limitation, certain statements regarding the launch of new businesses, our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as, among others, "will," "expect," "intend," "estimate," "believe", "continue" and “guidance”.
Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward looking statements, see our Annual Report on Form 20-F for 2018 filed with the U.S. Securities and Exchange Commission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The Company makes no representation as to the accuracy or completeness of the information contained in this press release, which remains subject to verification, completion and change. No responsibility or liability is or will be accepted by the Company or any of its subsidiaries, board members, officers, employees or agents as to or in relation to the accuracy or completeness of the information contained in this press release or any other written or oral information made available to any interested party or its advisers.
ABOUT TURKCELL: Turkcell is a digital operator headquartered in Turkey, serving its customers with its unique portfolio of digital services along with voice, messaging, data and IPTV services on its mobile and fixed networks. Turkcell Group companies operate in 5 countries – Turkey, Ukraine, Belarus, Northern Cyprus, Germany. Turkcell launched LTE services in its home country on April 1st, 2016, employing LTE-Advanced and 3 carrier aggregation technologies in 81 cities. Turkcell offers up to 10 Gbps fiber internet speed with its FTTH services. Turkcell Group reported TRY6.2 billion revenue in Q219 with total assets of TRY45.6 billion as of June 30, 2019. It has been listed on the NYSE and the BIST since July 2000, and is the only NYSE-listed company in Turkey. Read more at www.turkcell.com.tr.
This press release can also be viewed using the Turkcell Investor Relation app, which can be downloaded here for iOS, and here for Android mobile devices.
Appendix A – Tables
Table: Net foreign exchange gain and loss details
Million TRY |
Quarter |
Half Year |
||||||||||
Q218 |
Q219 |
y/y% |
H118 |
H119 |
y/y% |
|||||||
Turkcell Turkey |
(660.2 |
) |
(37.4 |
) |
(94.3 |
%) |
(1,027.7 |
) |
(595.9 |
) |
(42.0 |
%) |
Turkcell International |
(33.7 |
) |
(9.8 |
) |
(70.9 |
%) |
(43.0 |
) |
(35.7 |
) |
(17.0 |
%) |
Other Subsidiaries |
(266.8 |
) |
(61.9 |
) |
(76.8 |
%) |
(383.9 |
) |
(190.0 |
) |
(50.5 |
%) |
Net FX loss before hedging |
(960.6 |
) |
(109.1 |
) |
(88.6 |
%) |
(1,454.6 |
) |
(821.6 |
) |
(43.5 |
%) |
Fair value gain on derivative financial instruments1 |
568.6 |
|
(300.0 |
) |
(152.8 |
%) |
782.3 |
|
152.4 |
|
(80.5 |
%) |
Net FX gain / (loss) after hedging |
(392.0 |
) |
(409.1 |
) |
4.4 |
% |
(672.3 |
) |
(669.3 |
) |
(0.4 |
%) |
(1) Definition of fair value gain on derivative financial instruments has been extended to include the impact of interest income and expense in relation to derivative instruments and fair value of FX swaps option contracts engaged in during the period to manage operational cash flow balance. |
Table: Income tax expense details
Million TRY |
Quarter |
Half Year |
||||||||||
Q218 |
Q219 |
y/y% |
H118 |
H119 |
y/y% |
|||||||
Current tax expense |
(181.6 |
) |
(208.0 |
) |
14.5 |
% |
(361.7 |
) |
(361.8 |
) |
- |
|
Deferred tax income / (expense) |
39.4 |
|
45.0 |
|
14.2 |
% |
49.4 |
|
39.1 |
|
(20.9 |
%) |
Income Tax expense |
(142.2 |
) |
(163.0 |
) |
14.6 |
% |
(312.4 |
) |
(322.7 |
) |
3.3 |
% |
| TURKCELL ILETISIM HIZMETLERI A.S. IFRS SELECTED FINANCIALS (TRY Million) |
||||||||||
Quarter Ended |
Quarter Ended |
Quarter Ended |
Half Ended |
Half Ended |
||||||
Jun 30, |
Mar 31, |
Jun 30, |
Jun 30, |
Jun 30, |
||||||
2018 |
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
|
| Consolidated Statement of Operations Data | ||||||||||
| Turkcell Turkey | 4,365.6 |
|
4,833.3 |
|
5,260.8 |
|
8,437.7 |
|
10,094.1 |
|
| Turkcell International | 331.5 |
|
424.8 |
|
492.0 |
|
610.9 |
|
916.8 |
|
| Other | 408.1 |
|
417.3 |
|
438.3 |
|
818.3 |
|
855.6 |
|
| Total revenues | 5,105.3 |
|
5,675.4 |
|
6,191.1 |
|
9,866.9 |
|
11,866.5 |
|
| Direct cost of revenues | (3,391.8 |
) |
(3,908.3 |
) |
(4,284.4 |
) |
(6,506.5 |
) |
(8,192.7 |
) |
| Gross profit | 1,713.6 |
|
1,767.1 |
|
1,906.8 |
|
3,360.4 |
|
3,673.8 |
|
| Administrative expenses | (158.8 |
) |
(190.6 |
) |
(184.9 |
) |
(313.1 |
) |
(375.5 |
) |
| Selling & marketing expenses | (404.3 |
) |
(403.2 |
) |
(413.4 |
) |
(760.9 |
) |
(816.5 |
) |
| Other Operating Income / (Expense) | (30.2 |
) |
(51.8 |
) |
(73.8 |
) |
(63.7 |
) |
(125.7 |
) |
| Net impairment loses on financial and contract assets | (62.3 |
) |
(70.3 |
) |
(21.4 |
) |
(156.1 |
) |
(91.8 |
) |
| Operating profit before financing costs | 1,058.0 |
|
1,051.2 |
|
1,213.2 |
|
2,066.7 |
|
2,264.3 |
|
| Finance costs | (1,138.2 |
) |
(955.4 |
) |
(371.4 |
) |
(1,724.8 |
) |
(1,326.8 |
) |
| Finance income | 651.9 |
|
535.1 |
|
(200.4 |
) |
925.0 |
|
334.7 |
|
| Share of profit of equity accounted investees | - |
|
0.8 |
|
1.0 |
|
- |
|
1.7 |
|
| Income before tax and non-controlling interest | 571.6 |
|
631.7 |
|
642.4 |
|
1,266.8 |
|
1,274.0 |
|
| Income tax expense | (142.2 |
) |
(159.8 |
) |
(163.0 |
) |
(312.4 |
) |
(322.7 |
) |
| Income from continuing operations before non-controlling interest | 429.5 |
|
471.9 |
|
479.4 |
|
954.5 |
|
951.2 |
|
| Discontinued operations | - |
|
772.4 |
|
- |
|
- |
|
772.4 |
|
| Non-controlling interests | (14.4 |
) |
(19.8 |
) |
(14.3 |
) |
(38.6 |
) |
(34.1 |
) |
| Net income | 415.1 |
|
1,224.5 |
|
465.2 |
|
915.8 |
|
1,689.6 |
|
| Net income per share | 0.19 |
|
0.21 |
|
0.21 |
|
0.42 |
|
0.42 |
|
| Other Financial Data | ||||||||||
| Gross margin | 33.6 |
% |
31.1 |
% |
30.8 |
% |
34.1 |
% |
31.0 |
% |
| EBITDA(*) | 2,134.3 |
|
2,281.1 |
|
2,552.8 |
|
4,156.2 |
|
4,833.9 |
|
| Total Capex | 1,583.8 |
|
1,352.6 |
|
1,807.8 |
|
4,143.9 |
|
3,160.4 |
|
| Operational capex | 1,062.3 |
|
883.6 |
|
956.0 |
|
1,588.6 |
|
1,839.6 |
|
| Licence and related costs | 137.2 |
|
0.7 |
|
0.5 |
|
325.2 |
|
1.2 |
|
| Non-operational Capex | 384.3 |
|
468.4 |
|
851.3 |
|
2,230.1 |
|
1,319.6 |
|
| Consolidated Balance Sheet Data (at period end) | ||||||||||
| Cash and cash equivalents | 7,080.9 |
|
8,888.3 |
|
10,686.7 |
|
7,080.9 |
|
10,686.7 |
|
| Total assets | 41,026.2 |
|
46,078.6 |
|
45,611.9 |
|
41,026.2 |
|
45,611.9 |
|
| Long term debt | 11,760.3 |
|
15,407.7 |
|
14,558.5 |
|
11,760.3 |
|
14,558.5 |
|
| Total debt | 18,448.6 |
|
22,866.9 |
|
22,062.0 |
|
18,448.6 |
|
22,062.0 |
|
| Total liabilities | 26,073.9 |
|
28,976.3 |
|
28,281.3 |
|
26,073.9 |
|
28,281.3 |
|
| Total shareholders’ equity / Net Assets | 14,952.3 |
|
17,102.3 |
|
17,330.6 |
|
14,952.3 |
|
17,330.6 |
|
| (*) Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 13 | ||||||||||
| For further details, please refer to our consolidated financial statements and notes as at 30 June 2019 on our web site | ||||||||||
| TURKCELL ILETISIM HIZMETLERI A.S. TURKISH ACCOUNTING STANDARDS SELECTED FINANCIALS (TRY Million) |
||||||||||
| Quarter Ended | Quarter Ended | Quarter Ended | Half Ended | Half Ended | ||||||
| Jun 30, | Mar 31, | Jun 30, | Jun 30, | Jun 30, | ||||||
2018 |
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
|
| Consolidated Statement of Operations Data | ||||||||||
| Turkcell Turkey | 4,365.6 |
|
4,833.3 |
|
5,260.8 |
|
8,437.7 |
|
10,094.1 |
|
| Turkcell International | 331.5 |
|
424.8 |
|
492.0 |
|
610.9 |
|
916.8 |
|
| Other | 408.1 |
|
417.3 |
|
438.3 |
|
818.3 |
|
855.6 |
|
| Total revenues | 5,105.3 |
|
5,675.4 |
|
6,191.1 |
|
9,867.0 |
|
11,866.5 |
|
| Direct cost of revenues | (3,391.8 |
) |
(3,908.3 |
) |
(4,284.4 |
) |
(6,506.5 |
) |
(8,192.7 |
) |
| Gross profit | 1,713.6 |
|
1,767.1 |
|
1,906.8 |
|
3,360.4 |
|
3,673.8 |
|
| Administrative expenses | (158.8 |
) |
(190.6 |
) |
(184.9 |
) |
(313.1 |
) |
(375.5 |
) |
| Selling & marketing expenses | (404.3 |
) |
(403.2 |
) |
(413.4 |
) |
(760.9 |
) |
(816.5 |
) |
| Other Operating Income / (Expense) | 623.2 |
|
248.7 |
|
327.0 |
|
723.8 |
|
575.6 |
|
| Operating profit before financing and investing costs | 1,773.7 |
|
1,422.0 |
|
1,635.4 |
|
3,010.2 |
|
3,057.4 |
|
| Net impairment loses on financial and contract assets | (62.3 |
) |
(70.3 |
) |
(21.4 |
) |
(156.1 |
) |
(91.8 |
) |
| Income from investing activities | 7.7 |
|
12.7 |
|
26.0 |
|
16.4 |
|
38.7 |
|
| Expense from investing activities | (42.6 |
) |
(50.1 |
) |
(16.5 |
) |
(56.9 |
) |
(66.6 |
) |
| Share of profit of equity accounted investees | - |
|
0.8 |
|
1.0 |
|
- |
|
1.7 |
|
| Income before financing costs | 1,676.4 |
|
1,315.1 |
|
1,624.4 |
|
2,813.6 |
|
2,939.5 |
|
| Finance income | 543.2 |
|
461.5 |
|
(259.4 |
) |
832.1 |
|
202.1 |
|
| Finance expense | (1,648.0 |
) |
(1,145.0 |
) |
(722.6 |
) |
(2,378.9 |
) |
(1,867.6 |
) |
| Income from continuing operations before tax and non-controlling interest | 571.6 |
|
631.6 |
|
642.4 |
|
1,266.8 |
|
1,274.0 |
|
| Income tax expense from continuing operations | (142.2 |
) |
(159.8 |
) |
(163.0 |
) |
(312.4 |
) |
(322.7 |
) |
| Income from continuing operations before non-controlling interest | 429.5 |
|
471.8 |
|
479.4 |
|
954.5 |
|
951.2 |
|
| Discontinued operations | - |
|
772.4 |
|
- |
|
- |
|
772.4 |
|
| Income before non-controlling interest | 429.5 |
|
1,244.2 |
|
479.4 |
|
954.5 |
|
1,723.7 |
|
| Non-controlling interest | (14.4 |
) |
(19.8 |
) |
(14.3 |
) |
(38.6 |
) |
(34.1 |
) |
| Net income | 415.1 |
|
1,224.4 |
|
465.2 |
|
915.8 |
|
1,689.6 |
|
| Net income per share | 0.19 |
|
0.21 |
|
0.21 |
|
0.42 |
|
0.42 |
|
| Other Financial Data | ||||||||||
| Gross margin | 33.6 |
% |
31.1 |
% |
30.8 |
% |
34.1 |
% |
31.0 |
% |
| EBITDA | 2,134.3 |
|
2,281.1 |
|
2,552.8 |
|
4,156.2 |
|
4,833.9 |
|
| Total Capex | 1,583.8 |
|
1,352.6 |
|
1,807.8 |
|
4,143.9 |
|
3,160.4 |
|
| Operational capex | 1,062.3 |
|
883.6 |
|
956.0 |
|
1,588.6 |
|
1,839.6 |
|
| Licence and related costs | 137.2 |
|
0.7 |
|
0.5 |
|
325.2 |
|
1.2 |
|
| Non-operational Capex | 384.3 |
|
468.4 |
|
851.3 |
|
2,230.1 |
|
1,319.6 |
|
| Consolidated Balance Sheet Data (at period end) | ||||||||||
| Cash and cash equivalents | 7,080.9 |
|
8,888.3 |
|
10,686.7 |
|
7,080.9 |
|
10,686.7 |
|
| Total assets | 41,026.2 |
|
46,078.6 |
|
45,611.9 |
|
41,026.2 |
|
45,611.9 |
|
| Long term debt | 11,760.3 |
|
15,407.7 |
|
14,558.5 |
|
11,760.3 |
|
14,558.5 |
|
| Total debt | 18,448.6 |
|
22,866.9 |
|
22,062.0 |
|
18,448.6 |
|
22,062.0 |
|
| Total liabilities | 26,073.9 |
|
28,976.3 |
|
28,281.3 |
|
26,073.9 |
|
28,281.3 |
|
| Total shareholders’ equity / Net Assets | 14,952.3 |
|
17,102.3 |
|
17,330.6 |
|
14,952.3 |
|
17,330.6 |
|