Turkcell Iletisim Hizmetleri: First Quarter 2021 Results
Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) reported strong Q1 2021 results, with revenues at TRY7.8 billion, up 17.5% year-on-year. Key drivers included a robust subscriber base and increased demand for digital services. EBITDA rose 17.7% to TRY3.3 billion, maintaining a margin of 42.2%. Net income jumped 26.6% to TRY1.1 billion. Notably, the subscriber base grew by 705,000, the highest in three years. Turkcell also approved a TRY2.6 billion dividend distribution during its General Assembly.
- Revenue increased 17.5% year-on-year to TRY7.8 billion.
- EBITDA rose by 17.7% year-on-year, leading to a 42.2% EBITDA margin.
- Net income increased 26.6% to TRY1.1 billion.
- Highest subscriber additions in three years: 705,000.
- Digital services revenue grew by 28% year-on-year.
- Quarterly revenue decreased 0.6% from Q4 2020.
- Net income decreased 15.1% from Q4 2020.
Turkcell Iletisim Hizmetleri A.S. (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 four reporting segments:
- "Turkcell Turkey" which comprises our telecom, digital services and digital business services 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 and digital services related businesses outside of Turkey.
- “Techfin” which comprises all of our financial services businesses.
- “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations.
- 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 March 31, 2021 refer to the same item as at March 31, 2020. For further details, please refer to our consolidated financial statements and notes as at and for March 31, 2021, 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 first and fourth quarters of 2020 and the first quarter of 2021 is based on IFRS figures in TRY terms unless otherwise stated.
- 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.
SEGMENT INFORMATION
In accordance with our integrated communication and technology services strategy, we have reported our telecom related businesses in Turkey and outside of Turkey under Turkcell Turkey and Turkcell International reportable segments, respectively. All other businesses were reported under the Other segment until Q121.
Starting from Q121, our financial services businesses; Turkcell Finansman A.Ş., Turkcell Ödeme ve Elektronik Para Hizmetleri A.Ş., Turkcell Sigorta Aracılık Hizmetleri A.Ş., and Paycell LLC, will be reported under the new Techfin segment. In previous releases, these businesses were included under the Other segment. We made this change since these entities have similar business models, and to some extent have operations integrated with each other. Moreover, these businesses are subject to legislation and regulations, which differ from those applied to other entities reported under the Other segment.
Furthermore, operations of Turkcell Satış ve Dijital İş Servisleri Hizmetleri A.Ş. (“Turkcell Satış”), which are reported under Turkcell Turkey are separated as “Digital Business Services” and other Turkcell Satış operations: Integrated corporate business solutions, city hospitals, equipment and corporate terminal activities will continue to be reported under Turkcell Turkey as “Digital Business Services”, while other Turkcell Satış operations, which include retail channel operations, smart devices management and consumer electronics sales through digital channels, will be reported in the Other segment. We have made this change since other Turkcell Satış operations, which are reported under the Other segment, are now less connected with the integrated business model of Turkcell Turkey. Accordingly, these operations mainly comprise the procurement and sale of consumer electronics not limited to integrated telco products. They target non-Turkcell customers as well. Moreover, these operations also have different level of operating profitability compared to businesses reported under Turkcell Turkey.
There have been no changes to Turkcell International segment.
Starting from Q121, our reporting segments will be as follows:
“Turkcell Turkey” comprises “Turkcell İletişim Hizmetleri A.Ş.”, “Superonline İletişim Hizmetleri A.Ş.”, the group call center operations of “Global Bilgi Pazarlama Danışmanlık ve Çağrı Servisi Hizmetleri A.Ş.”, the abovementioned digital business services operations of “Turkcell Satış”, “Turktell Bilişim Servisleri A.Ş.”, “Turkcell Teknoloji Araştırma ve Geliştirme A.Ş.”, “Kule Hizmet ve İşletmecilik A.Ş.”, “Rehberlik Hizmetleri A.Ş.”, “Turkcell Gayrimenkul Hizmetleri A.Ş.”, “Lifecell Dijital Servisler ve Çözümler A.Ş.”, “Lifecell Bulut Çözümleri A.Ş.”, “Lifecell TV Yayın ve İçerik Hizmetleri A.Ş.”, “Lifecell Müzik Yayın ve İletim A.Ş.”, “BiP İletişim Teknolojileri ve Dijital Servisler A.Ş.” and “Turkcell Dijital İş Servisleri A.Ş.”. Hence, Turkcell Turkey comprises our telecom, digital services and digital business services related businesses in Turkey.
“Turkcell International” comprises “Kıbrıs Mobile Telekomünikasyon Limited Şirketi”, “East Asian Consortium B.V.”, “Lifecell LLC”, “Lifecell Ventures Coöperatief U.A.”, “Beltel Telekomünikasyon Hizmetleri A.Ş.”, “CJSC Belarusian Telecommunications Network”, “LLC UkrTower”, “LLC Global Bilgi”, “Turkcell Europe GmbH”, “Lifetech LLC”, “Beltower LLC”, “Lifecell Digital Limited”, “Yaani Digital BV” and “BiP Digital Communication Technologies B.V.”. Turkcell International comprises our telecom and digital services related businesses outside of Turkey.
“Techfin” comprises “Turkcell Finansman A.Ş.”, “Turkcell Ödeme ve Elektronik Para Hizmetleri A.Ş.”, “Turkcell Sigorta Aracılık Hizmetleri A.Ş.”, and “Paycell LLC”. Techfin comprises all our financial services businesses.
“Other” comprises the non-group call center operations of “Global Bilgi Pazarlama Danışmanlık ve Çağrı Servisi Hizmetleri A.Ş.”, “Turkcell Enerji Çözümleri ve Elektrik Satış Ticaret A.Ş.” and the abovementioned other operations of “Turkcell Satış”. The Other segment mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations.
FINANCIAL HIGHLIGHTS
TRY million |
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
Revenue |
6,658 |
7,872 |
7,827 |
|
( |
EBITDA1 |
2,809 |
3,243 |
3,306 |
|
|
EBITDA Margin (%) |
|
|
|
- |
1.0pp |
EBIT2 |
1,437 |
1,608 |
1,651 |
|
|
EBIT Margin (%) |
|
|
|
(0.5pp) |
0.7pp |
Net Income |
873 |
1,302 |
1,105 |
|
( |
FIRST QUARTER HIGHLIGHTS
-
Strong set of financials:
-
Group revenues up
17.5% year-on-year mainly on Turkcell Turkey’s data and digital services revenue growth, larger subscriber base, as well as the increase in equipment revenues backed by digital channels -
Robust performance in strategic focus areas; standalone digital services revenues up
27.5% ; digital business services revenues up27.3% ; Paycell revenues up52.6% -
Group EBITDA up
17.7% year-on-year leading to an EBITDA margin of42.2% ; EBIT up14.9% year-on-year resulting in an EBIT margin of21.1% -
Net income up
26.6% year-on-year mainly on solid operational performance and disciplined financial risk management -
Leverage at 0.9x, despite FX fluctuations; long FX position at US
$183 million
-
Group revenues up
-
Robust operational performance:
- Turkcell Turkey subscriber base up by 705 thousand quarterly net additions, highest of the past three years; solid performance towards the target of 1 million net subscriber additions for the full year
-
410 thousand quarterly mobile postpaid net additions; postpaid subscriber share at
66% - Quarterly mobile prepaid customer net additions of 190 thousand
- 50 thousand net quarterly fiber additions; 49 thousand quarterly IPTV net additions
-
Mobile ARPU3 growth of
8.7% year-on-year; fixed residential ARPU growth of11.0% year-on-year - Average monthly data consumption of 4.5G users at 14.4 GB in Q121
-
Digital channels’ share in Turkcell Turkey consumer sales (excluding fixed business) at
15.7% ; up 8.5pp year-on-year
-
General Assembly meeting held on April 15th:
- TRY2.6 billion dividend distribution in three equal installments was approved; payment of first installment was performed on April 30th
- All board members, including independent ones, were appointed
(1) EBITDA is a non-GAAP financial measure. See page 16 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
For further details, please refer to our consolidated financial statements and notes as at March 31, 2021 via our website in the investor relations section (www.turkcell.com.tr).
COMMENTS BY CEO, MURAT ERKAN
We began the year strongly with our customer-driven approach
Having made a strong start, we have concluded this quarter with strong operational and financial results matching up with our targets. In this period in which we managed our business successfully, in spite of the challenging conditions of the COVID-19 pandemic, we continued our strong growth and achieved successful results. This was made possible by offering enriched value offers to our customers with our “Customer First” focus, and reflective of our diversified business model with strategic focus areas.
Our consolidated revenues rose
The highest subscriber additions of the past 3 years
Thanks to our value offers meeting changing customer needs and our innovative campaigns facilitating the lives of our customers, we recorded 410 thousand postpaid subscriber and 190 thousand prepaid subscriber net additions in this quarter. Including the fixed broadband and IPTV services, the total 705 thousand net subscriber addition marks our highest level of the past 3 years. Our strong and fast network, convenient digital sales channels and brand loyalty have been instrumental in customers opting for Turkcell. Our postpaid customer base reached 22.4 million, reflecting
The strong demand for fixed broadband has continued in this quarter, too, under the prevailing mobility restrictions within the scope of measures against the pandemic, and more widespread remote working. We gained a net 50 thousand fiber subscribers with our high-speed and unlimited fiber internet offers designed to meet the need for speed in homes where a large number of devices are connected at the same time. Accordingly, our fixed broadband customer base reached 2.5 million.
Interest in our digital services is rising daily
We continue pioneering the digital transformation of Turkey with the instant messaging, TV and music platforms, personal cloud services, search engine and e-mail services developed by Turkcell engineers. Enjoying increasing recognition, BiP, our instant messaging application, saw 32 million new downloads in this quarter. With its total downloads reaching 77 million, BiP has been the most downloaded local application in Turkey. With no imposition or discriminating among its users in terms of data privacy, BiP has reached 40 million three-month active users, approximately one third of which are outside of Turkey. TV+, our web-based digital TV platform, has been another outstanding service this quarter. Both IPTV and the OTT TV+ service users have accelerated in this quarter thanks to enriched content, as well as its accessibility through smart televisions. With the addition of net 49 thousand IPTV customers, we now offer IPTV services to 61 out of every 100 households among our residential fiber customers.
We launched GAMEPLUS, our new gaming platform on which we have been focusing recently, in March in collaboration with NVIDIA GeForce NOW, a cloud-based gaming service. Thanks to the cloud-based gaming technology eliminating the need for particular hardware to play games, users can access over 950 games. We believe that the strong interest in this platform, which has reached 10.4 thousand premium users within just 15 days will continue in the coming periods.
Overall, the stand-alone revenue of our digital services business reached TRY367 million with an increase of
Turkcell Digital Business Services continues pioneering the digital transformation of companies
The total revenues of Digital Business Services through which we offer a wide range of new generation technologies to our corporate customers, from access to cyber security, from cloud technologies to data centers, and from managed services to the internet of things, reached TRY452 million on an annual increase of
Growth of the Techfin sector’s rising star, Paycell, gains speed
Paycell, our innovative payment services platform in the field of techfin, marked a successful quarter with its rising users and growing mobile payment volume. As the number of three-month active Paycell users reached 5.3 million, mobile payment volume reached TRY351 million, doubling on an annual basis. During the same period, the Paycell Card transaction volume quadrupled. Overall, Paycell revenues grew by
We have set our sustainability targets
We, as Turkcell Group, have prioritized the use of renewable sources towards our goal of maximizing the efficient use of natural resources, reflective of our business model which is sensitive to the environment and based on shaping technology according to the needs of society. As we have also shared at the ‘GSMA Mobile Net Zero’ event on April 20, we aim to meet
Also this quarter, as a pioneer in mobile working in Turkey, we have put into practice our “Flexible Working Model” designed together with our employees. Accordingly, our employees, reflecting their preferences and planning, can work remotely or at our offices if need be, for an indefinite period without any limitation on location. With this model, we aim at enhancing the comfort and productivity of our employees, while at the same time offering the best working experience.
Dividend of TRY 2.6 billion approved at the Ordinary General Assembly
As part of our disclosure about the change in our shareholding structure, we had stated that the number of seats on the Board of Directors was increased to nine. At the Turkcell Ordinary General Assembly meeting held on April 15, these appointments were realized and the number of members set forth in our articles of association has been completed. At the same meeting, the distribution of the dividend of TRY2.6 billion, corresponding to
We will continue to serve our country and people with sustained investments in the upcoming period
In firm hopes that the COVID-19 pandemic may finally be behind us in the near future, I believe wholeheartedly that we will achieve new successes, while serving our country and people in the quarters ahead.
I extend my thanks to all our colleagues for their contribution that has enabled our strong start to the year, and to our Board of Directors for their confidence in us and their invaluable support. I also express our gratitude to our customers and business partners, ever with us on our journey to success.
(1) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income.
FINANCIAL AND OPERATIONAL REVIEW
Financial Review of Turkcell Group
Profit & Loss Statement (million TRY) |
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
Revenue |
6,658.2 |
7,872.2 |
7,826.5 |
|
( |
Cost of revenue1 |
(3,197.4) |
(3,938.1) |
(3,913.0) |
|
( |
Cost of revenue1/Revenue |
( |
( |
( |
(2.0pp) |
- |
Gross Margin1 |
|
|
|
(2.0pp) |
- |
Administrative expenses |
(188.3) |
(210.7) |
(199.4) |
|
( |
Administrative expenses/Revenue |
( |
( |
( |
0.3pp |
0.2pp |
Selling and marketing expenses |
(348.7) |
(400.8) |
(358.2) |
|
( |
Selling and marketing expenses/Revenue |
( |
( |
( |
0.6pp |
0.5pp |
Net impairment losses on financial and contract assets |
(114.8) |
(79.5) |
(49.5) |
( |
( |
EBITDA2 |
2,809.0 |
3,243.0 |
3,306.5 |
|
|
EBITDA Margin |
|
|
|
- |
1.0pp |
Depreciation and amortization |
(1,372.1) |
(1,634.6) |
(1,656.0) |
|
|
EBIT3 |
1,437.0 |
1,608.4 |
1,650.5 |
|
|
EBIT Margin |
|
|
|
(0.5pp) |
0.7pp |
Net finance income / (costs) |
(221.4) |
(381.8) |
(207.1) |
( |
( |
Finance income4 |
621.5 |
(316.0) |
1,601.9 |
|
n.m |
Finance costs4 |
(842.9) |
(65.8) |
(1,809.0) |
|
n.m |
Other income / (expense) |
(94.0) |
(366.9) |
(12.1) |
( |
( |
Non-controlling interests |
(1.2) |
- |
(0.0) |
( |
- |
Share of profit of equity accounted investees |
(3.2) |
(5.2) |
17.7 |
n.m |
n.m |
Income tax expense |
(244.4) |
447.6 |
(344.1) |
|
( |
Net Income |
872.7 |
1,302.0 |
1,104.9 |
|
( |
(1) Excluding depreciation and amortization expenses.
(2) EBITDA is a non-GAAP financial measure. See page 16 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 and the respective fair value gain and interest income regarding derivative instruments are represented on a net basis. 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 this change.
Revenue of the Group grew by
Turkcell Turkey revenues, comprising
- Consumer segment revenues grew
- Corporate segment revenues rose
- Standalone digital services revenues registered as part of consumer and corporate segments grew
- Wholesale revenues grew
Turkcell International revenues, comprising
Total techfin segment revenues, comprising
Other subsidiaries' revenues, at
Cost of revenue (excluding depreciation and amortization) rose to
Administrative Expenses declined to
Selling and Marketing Expenses declined to
Net impairment losses on financial and contract assets declined to
EBITDA1 rose by
- Turkcell Turkey’s EBITDA rose
- Turkcell International EBITDA grew
- Techfin segment EBITDA was at TRY138 million (TRY137 million) with an EBITDA margin of
- The EBITDA of other subsidiaries stood at TRY93 million (TRY35 million).
Depreciation and amortization expenses increased
Net finance expense declined to TRY207 million (TRY221 million) in Q121. This was driven mainly by higher interest income, despite a higher net FX loss after hedging, and a larger interest expense on financial assets and liabilities.
See Appendix A for the details of net foreign exchange gain and loss.
Income tax expense increased to TRY344 million (TRY244 million) due mainly to a higher deferred tax expense incurred in Q121.
Please see Appendix A for details.
Net income of the Group rose
Total cash & debt: Consolidated cash as of March 31, 2021 increased to TRY13,467 million from TRY11,861 million as of December 31, 2020, driven by cash flow generation and the positive impact of currency movements. Excluding FX swap transactions,
Consolidated debt as of March 31, 2021 increased to TRY24,896 million from TRY21,586 million as of December 31, 2020 mainly due to the impact of currency movements and new borrowings. Please note that TRY2,248 million of our consolidated debt is comprised of lease obligations.
Consolidated debt breakdown excluding lease obligations:
- Turkcell Turkey’s debt was at TRY20,467 million, of which TRY11,816 million (US
(1) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income
- The finance company had a debt balance of TRY1,089 million, of which TRY234 million (US
- The debt balance of lifecell was TRY1,092 million, fully denominated in UAH.
TRY1,203 million of lease obligations is denominated in TRY, TRY69 million (US
Net debt as of March 31, 2021 was at TRY11,429 million with a net debt to EBITDA ratio of 0.9 times. Excluding finance company consumer loans, our telco only net debt was at TRY9,534 million with a leverage of 0.8 times.
Turkcell Group had a long FX position of US
Capital expenditures: Capital expenditures, including non-operational items, amounted to TRY2,257 million in Q121. In the same period operational capital expenditures (excluding license fees) at the Group level were at
Capital expenditures (million TRY) |
Q120 |
Q420 |
Q121 |
Operational Capex |
836.7 |
1,904.2 |
1,467.9 |
License and Related Costs |
28.1 |
9.3 |
- |
Non-operational Capex (Including IFRS15 & IFRS16) |
695.2 |
971.2 |
789.4 |
Total Capex |
1,560.0 |
2,884.7 |
2,257.3 |
Summary of Operational Data |
Q120 |
Q420 |
Q121 |
y/y % |
q/q % |
Number of subscribers (million) |
36.3 |
36.7 |
37.4 |
|
|
Mobile Postpaid (million) |
21.0 |
22.0 |
22.4 |
|
|
Mobile M2M (million) |
2.7 |
2.8 |
2.9 |
|
|
Mobile Prepaid (million) |
12.2 |
11.5 |
11.6 |
( |
|
Fiber (thousand) |
1,518.4 |
1,664.3 |
1,714.3 |
|
|
ADSL (thousand) |
695.6 |
707.6 |
716.3 |
|
|
Superbox (thousand)1 |
399.5 |
591.2 |
614.6 |
|
|
Cable (thousand) |
58.7 |
67.7 |
64.9 |
|
( |
IPTV (thousand) |
747.3 |
871.3 |
920.7 |
|
|
Churn (%)2 |
|
|
|
|
|
Mobile Churn (%)3 |
|
|
|
(0.2pp) |
(1.2pp) |
Fixed Churn (%) |
|
|
|
(0.5pp) |
(0.3pp) |
ARPU4 (Average Monthly Revenue per User) (TRY) |
|
|
|
|
|
Mobile ARPU, blended |
42.6 |
46.8 |
46.0 |
|
( |
Mobile ARPU, blended (excluding M2M) |
45.9 |
50.5 |
49.9 |
|
( |
Postpaid |
56.1 |
59.8 |
57.8 |
|
( |
Postpaid (excluding M2M) |
63.6 |
67.8 |
65.8 |
|
( |
Prepaid |
19.9 |
23.4 |
23.4 |
|
- |
Fixed Residential ARPU, blended |
66.6 |
72.6 |
73.9 |
|
|
Residential Fiber ARPU |
68.3 |
73.6 |
74.3 |
|
|
Average mobile data usage per user (GB/user) |
9.8 |
13.0 |
12.6 |
|
( |
Mobile MoU (Avg. Monthly Minutes of usage per subs) blended |
458.2 |
548.6 |
532.0 |
|
( |
(1) Superbox subscribers are included in mobile subscribers.
(2) Churn figures represent 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 is disconnected at the latest by year-end. As a regulatory requirement, we started to disconnect prepaid lines in accordance with the new ICTA regulation, which requires deactivation of prepaid lines which lack residency documents by the 6th month of subscription starting from 2019. Furthermore, as required by the ICTA, the line of a deceased customer should either be transferred to a successor/another user or terminated. Lines, which are not transferred or terminated, are to be disconnected at the end of seven months.
(4) We historically recorded all TV-related revenue under Turkcell Superonline and presented the related ARPU under fixed residential ARPU. As previously announced, our TV business has become a separate standalone subsidiary. In order to reflect this change in our organization, we decided to shift mobile OTT TV ARPU from fixed residential ARPU into mobile ARPU starting from Q320. We note that mobile TV revenues are generated by mobile subscribers. IPTV revenues will continue to be recorded under Turkcell Superonline and included under residential fixed ARPU. Moreover, starting from Q121, as a consequence of the change in reportable segments, commission revenues resulting from devices and accessories sales have been excluded from mobile ARPU of Turkcell Turkey since these commissions are now reported under the Other segment. In order to maintain comparability, we provide ARPU data for the last three years, revised to reflect this change on our investor relations website in the financial and operational data spreadsheet.
We started the year registering a strong subscriber net addition performance. Accordingly, the Turkcell Turkey subscriber base expanded by 705 thousand quarterly net additions, reaching 37.4 million. This robust performance was driven mainly by our offerings with rich value propositions, customer-oriented campaigns and retention focus. This also confirms our commitment to achieving 1 million subscriber net additions for the full year.
On the mobile front, our subscriber base expanded by 599 thousand quarterly net additions, reaching 34.0 million in total. This was mainly driven by 410 thousand quarterly net additions to the postpaid subscriber base, which reached
On the fixed front, our subscriber base continued to grow, reaching 2.5 million subscribers on 56 thousand total quarterly net additions. Fiber subscribers exceeded 1.7 million on 50 thousand quarterly net additions. Superbox, our fixed-wireless access offering alternative to fiber, reached 615 thousand subscribers on 23 thousand quarterly net additions in Q121. Our cable subscribers were at 65 thousand by the end of the quarter. Meanwhile, our IPTV customers rose to 921 thousand on 49 thousand quarterly net additions.
The average monthly mobile churn rate declined to
Our mobile ARPU (excluding M2M) rose
Our residential fiber ARPU growth was
Average monthly mobile data usage per user rose
Total smartphone5 penetration on our network reached
(5) Smartphone penetration was positively impacted by approximately 700 thousand smartphone net additions in Q121 that resulted from an algorithm improvement to detect devices which were not previously classified as smartphones.
TURKCELL INTERNATIONAL
lifecell1 Financial Data |
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
Revenue (million UAH) |
1,580.1 |
1,913.8 |
1,899.2 |
|
( |
EBITDA (million UAH) |
798.2 |
1,042.9 |
1,076.8 |
|
|
EBITDA margin (%) |
|
|
|
6.2pp |
2.2pp |
Net income / (loss) (million UAH) |
(150.9) |
2,736.7 |
83.2 |
n.m |
( |
Capex (million UAH) |
635.3 |
1,545.7 |
572.4 |
( |
( |
Revenue (million TRY) |
386.4 |
531.4 |
508.8 |
|
( |
EBITDA (million TRY) |
195.2 |
289.6 |
288.6 |
|
( |
EBITDA margin (%) |
|
|
|
6.2pp |
2.2pp |
Net income / (loss) (million TRY) |
(37.0) |
731.9 |
22.4 |
n.m |
( |
(1) Since July 10, 2015, we hold a
lifecell (Ukraine) had another quarter with strong revenue growth performance. Accordingly, revenues rose
lifecell revenues in TRY terms rose
lifecell Operational Data |
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
Number of subscribers (million)2 |
8.9 |
9.3 |
9.2 |
|
( |
Active (3 months)3 |
7.5 |
8.1 |
8.0 |
|
( |
MOU (minutes) (12 months) |
162.8 |
185.5 |
177.2 |
|
( |
ARPU (Average Monthly Revenue per User), blended (UAH) |
59.2 |
69.6 |
68.1 |
|
( |
Active (3 months) (UAH) |
69.5 |
79.9 |
78.7 |
|
( |
(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 grew by
lifecell continued to increase the penetration of its 4.5G users within its customer base in Q121. Accordingly, the 3-month active 4.5G subscribers grew
lifecell continued its focus on increasing the penetration of its digital services within its customer base in Q121.
BeST1 |
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
Number of subscribers (million) |
1.5 |
1.4 |
1.4 |
( |
- |
Active (3 months) |
1.0 |
1.1 |
1.1 |
|
- |
Revenue (million BYN) |
32.5 |
37.8 |
38.0 |
|
|
EBITDA (million BYN) |
8.4 |
10.3 |
9.2 |
|
( |
EBITDA margin (%) |
|
|
|
(1.8pp) |
(3.2pp) |
Net loss (million BYN) |
(8.1) |
(7.1) |
(8.1) |
- |
|
Capex (million BYN) |
11.1 |
11.0 |
18.0 |
|
|
Revenue (million TRY) |
89.1 |
114.1 |
109.4 |
|
( |
EBITDA (million TRY) |
23.1 |
31.1 |
26.5 |
|
( |
EBITDA margin (%) |
|
|
|
(1.8pp) |
(3.1pp) |
Net loss (million TRY) |
(22.2) |
(21.7) |
(23.3) |
|
|
(1) BeST, in which we hold an
BeST revenues grew by
BeST continued to expand its 4G coverage in Belarus in Q121. Accordingly, it leads the market in terms of 4G geographical coverage. Furthermore, BeST started to provide LTE800 service over beCloud’s network in 2 regions, which enabled higher coverage and positively impacted customer satisfaction. All these efforts supported the increase of 4G services penetration as reflected by the number of 4G users, which reached
BeST continued its efforts to promote its digital services in Q121, as digital services usage leads to higher loyalty and increased ARPU generation. Accordingly,
Kuzey Kıbrıs Turkcell2 (million TRY) |
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
Number of subscribers (million) |
0.5 |
0.5 |
0.5 |
- |
- |
Revenue |
54.5 |
65.6 |
61.9 |
|
( |
EBITDA |
20.3 |
21.8 |
24.5 |
|
|
EBITDA margin (%) |
|
|
|
2.3pp |
6.4pp |
Net income |
6.9 |
9.3 |
9.9 |
|
|
Capex |
16.3 |
23.0 |
15.7 |
( |
( |
(2) Kuzey Kıbrıs Turkcell, in which we hold a
Kuzey Kıbrıs Turkcell revenues grew
TECHFIN
Paycell Financial Data (million TRY) |
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
Revenue |
64.3 |
79.8 |
98.1 |
|
|
EBITDA |
36.4 |
37.0 |
53.3 |
|
|
EBITDA Margin (%) |
|
|
|
(2.2pp) |
8.0pp |
Net Income |
28.5 |
26.1 |
40.2 |
|
|
Paycell registered a remarkable performance in Q121 achieving
On the operational front, Paycell’s 3-month active users numbered 5.3 million. The increase in active users was driven mainly by increased digital content consumption, an expanding merchant channel and functionality of the Paycell application. Paycell serves 13 thousand contracted merchants as at the end of the quarter. The total transaction volume of TRY2.4 billion for the quarter was a result of the increase in active users and their increased consumption. The DCB transactions volume (non-group) rose
Financell Financial Data (million TRY) |
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
Revenue |
162.6 |
144.7 |
130.0 |
( |
( |
EBITDA |
99.4 |
96.0 |
85.3 |
( |
( |
EBITDA Margin (%) |
|
|
|
4.5pp |
(0.7pp) |
Net Income |
62.8 |
61.3 |
95.0 |
|
|
Financell revenues continued to contract in Q121 due mainly to the lower loan portfolio compared to the same period of the previous year and lower average interest rate on loan portfolio. Meanwhile, the decline in Financell’s EBITDA was slower compared to revenues which resulted in 4.5pp rise in EBITDA margin. This was driven mainly by the customer portfolio improvement with better credit scoring, successful collection performance and sale of doubtful receivables that led to a decline in bad debt expenses. Net income increased
Financell’s loan portfolio declined from TRY2.1 billion as of Q120 to TRY1.9 billion as of Q121. This was due mainly to the installment limitation on consumer loans for telecom devices. Moreover, sales volume was affected by the negative impacts of COVID-19 measures. Compared to the previous quarter, Financell had a more stable loan portfolio. In the meantime, Financell’s cost of risk declined to
Turkcell Group Subscribers
Turkcell Group registered subscribers amounted to approximately 48.6 million as of March 31, 2021. This figure is calculated by taking the number of subscribers of Turkcell Turkey, and of 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.
Turkcell Group Subscribers |
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
Mobile Postpaid (million) |
21.0 |
22.0 |
22.4 |
|
|
Mobile Prepaid (million) |
12.2 |
11.5 |
11.6 |
( |
|
Fiber (thousand) |
1,518.4 |
1,664.3 |
1,714.3 |
|
|
ADSL (thousand) |
695.6 |
707.6 |
716.3 |
|
|
Superbox (thousand)1 |
399.5 |
591.2 |
614.6 |
|
|
Cable (thousand) |
58.7 |
67.7 |
64.9 |
|
( |
IPTV (thousand) |
747.3 |
871.3 |
920.7 |
|
|
Turkcell Turkey subscribers (million)2 |
36.3 |
36.7 |
37.4 |
|
|
lifecell (Ukraine) |
8.9 |
9.3 |
9.2 |
|
( |
BeST (Belarus) |
1.5 |
1.4 |
1.4 |
( |
- |
Kuzey Kıbrıs Turkcell |
0.5 |
0.5 |
0.5 |
- |
- |
lifecell Europe3 |
0.2 |
- |
- |
n.a |
n.a |
Turkcell Group Subscribers (million) |
47.3 |
47.9 |
48.6 |
|
|
(1) Superbox subscribers are included in mobile subscribers.
(2) Subscribers to more than one service are counted separately for each service.
(3) The marketing partnership between Turkcell Europe and Telekom Deutschland Multibrand GmbH, the subsidiary of Deutsche Telekom, has ended on April 30, 2020 pursuant to the respective agreement. 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.
|
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
GDP Growth (Turkey) |
|
|
n.a |
n.a |
n.a |
Consumer Price Index (Turkey) (yoy) |
|
|
|
4.3pp |
1.6pp |
US$ / TRY rate |
|
|
|
|
|
Closing Rate |
6.5160 |
7.3405 |
8.3260 |
|
|
Average Rate |
6.1419 |
7.8933 |
7.5086 |
|
( |
EUR / TRY rate |
|
|
|
|
|
Closing Rate |
7.2150 |
9.0079 |
9.7741 |
|
|
Average Rate |
6.7901 |
9.3551 |
9.0683 |
|
( |
US$ / UAH rate |
|
|
|
|
|
Closing Rate |
28.06 |
28.27 |
27.89 |
( |
( |
Average Rate |
25.12 |
28.40 |
28.07 |
|
( |
US$ / BYN rate |
|
|
|
|
|
Closing Rate |
2.6023 |
2.5789 |
2.6242 |
|
|
Average Rate |
2.2433 |
2.6088 |
2.6112 |
|
|
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) |
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
Adjusted EBITDA |
2,809.0 |
3,243.0 |
3,306.5 |
|
|
Depreciation and amortization |
(1,372.1) |
(1,634.6) |
(1,656.0) |
|
|
EBIT |
1,437.0 |
1,608.4 |
1,650.5 |
|
|
Finance income |
621.5 |
(316.0) |
1,601.9 |
|
n.m |
Finance costs |
(842.9) |
(65.8) |
(1,809.0) |
|
n.m |
Other income / (expense) |
(94.0) |
(366.9) |
(12.1) |
( |
( |
Share of profit of equity accounted investees |
(3.2) |
(5.2) |
17.7 |
n.m |
n.m |
Consolidated profit before income tax & minority interest |
1,118.3 |
854.5 |
1,449.1 |
|
|
Income tax expense |
(244.4) |
447.6 |
(344.1) |
|
( |
Consolidated profit before minority interest |
873.9 |
1,302.0 |
1,104.9 |
|
( |
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 2021. 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 2020 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 4 countries – Turkey, Ukraine, Belarus, Northern Cyprus. 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 TRY7.8 billion revenue in Q121 with total assets of TRY56.0 billion as of March 31, 2021. 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.
Appendix A – Tables
Table: Net foreign exchange gain and loss details
Million TRY |
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
Net FX loss before hedging |
(688.3) |
254.7 |
(1,618.1) |
|
( |
Swap interest income/(expense)1 |
(121.9) |
(97.8) |
(114.5) |
( |
|
Fair value gain on derivative financial instruments1 |
709.1 |
(400.3) |
1,456.1 |
|
n.m |
Net FX gain / (loss) after hedging |
(101.1) |
(243.4) |
(276.5) |
|
|
(1) Swap interest income / (expense) which was included in fair value gain on derivative financial instruments line in previous quarters has been presented separately.
Table: Income tax expense details
Million TRY |
Q120 |
Q420 |
Q121 |
y/y% |
q/q% |
Current tax expense |
(161.5) |
(136.2) |
(163.2) |
|
|
Deferred tax income / (expense) |
(82.8) |
583.7 |
(181.0) |
|
( |
Income Tax expense |
(244.4) |
447.6 |
(344.1) |
|
( |
| TURKCELL ILETISIM HIZMETLERI A.S. IFRS SELECTED FINANCIALS (TRY Million) |
|||||
| Quarter Ended | Quarter Ended | Year Ended | Quarter Ended | ||
| Mar 31, | Dec 31, | Dec 31, | Mar 31, | ||
2020 |
2020 |
2020 |
2021 |
||
| Consolidated Statement of Operations Data | |||||
| Turkcell Turkey | 5,276.3 |
6,058.7 |
22,822.9 |
5,978.6 |
|
| Turkcell International | 559.6 |
747.3 |
2,542.4 |
708.2 |
|
| Techfin | 219.8 |
225.3 |
845.2 |
222.6 |
|
| Other | 602.5 |
840.9 |
2,893.3 |
917.1 |
|
| Total revenues | 6,658.2 |
7,872.2 |
29,103.7 |
7,826.5 |
|
| Direct cost of revenues | (4,569.5) |
(5,572.8) |
(20,336.1) |
(5,568.9) |
|
| Gross profit | 2,088.7 |
2,299.4 |
8,767.7 |
2,257.6 |
|
| Administrative expenses | (188.3) |
(210.7) |
(749.6) |
(199.4) |
|
| Selling & marketing expenses | (348.7) |
(400.8) |
(1,373.0) |
(358.2) |
|
| Other Operating Income / (Expense) | (94.0) |
(366.9) |
(523.3) |
(12.1) |
|
| Net impairment loses on financial and contract assets | (114.8) |
(79.5) |
(349.6) |
(49.5) |
|
| Operating profit before financing costs | 1,343.0 |
1,241.5 |
5,772.3 |
1,638.4 |
|
| Finance costs | (842.9) |
(65.8) |
(3,251.2) |
(1,809.0) |
|
| Finance income | 621.5 |
(316.0) |
2,119.5 |
1,601.9 |
|
| Share of profit of equity accounted investees | (3.2) |
(5.2) |
(13.8) |
17.7 |
|
| Income before tax and non-controlling interest | 1,118.3 |
854.5 |
4,626.8 |
1,449.1 |
|
| Income tax expense | (244.4) |
447.6 |
(387.2) |
(344.1) |
|
| Income from continuing operations before non-controlling interest | 873.9 |
1,302.0 |
4,239.6 |
1,104.9 |
|
| Discontinued operations | - |
- |
- |
- |
|
| Non-controlling interests | (1.2) |
- |
(2.5) |
(0.0) |
|
| Net income | 872.7 |
1,302.0 |
4,237.1 |
1,104.9 |
|
| Net income per share total | 0.40 |
0.60 |
1.94 |
0.51 |
|
| Other Financial Data | |||||
| Gross margin |
|
|
|
|
|
| EBITDA(*) | 2,809.0 |
3,243.0 |
12,270.3 |
3,306.5 |
|
| Total Capex | 1,560.0 |
2,884.7 |
9,078.9 |
2,257.3 |
|
| Operational capex | 836.7 |
1,904.2 |
5,391.6 |
1,467.9 |
|
| Licence and related costs | 28.1 |
9.3 |
42.8 |
- |
|
| Non-operational Capex | 695.2 |
971.2 |
3,644.6 |
789.4 |
|
| Consolidated Balance Sheet Data (at period end) | |||||
| Cash and cash equivalents | 9,212.2 |
11,860.6 |
11,860.6 |
13,467.0 |
|
| Total assets | 45,328.7 |
51,498.4 |
51,498.4 |
55,987.2 |
|
| Long term debt | 13,964.6 |
16,353.7 |
16,353.7 |
19,074.5 |
|
| Total debt | 19,499.9 |
21,586.4 |
21,586.4 |
24,895.8 |
|
| Total liabilities | 26,651.1 |
30,713.5 |
30,713.5 |
34,253.0 |
|
| Total shareholders’ equity / Net Assets | 18,677.6 |
20,784.9 |
20,784.9 |
21,734.3 |
|
| (*) Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 16 | |||||
| For further details, please refer to our consolidated financial statements and notes as at 31 March 2021 on our web site | |||||
| TURKCELL ILETISIM HIZMETLERI A.S. TURKISH ACCOUNTING STANDARDS SELECTED FINANCIALS (TRY Million) |
|||||
| Quarter Ended | Quarter Ended | Year Ended | Quarter Ended | ||
| Mar 31, | Dec 31, | Dec 31, | Mar 31, | ||
2020 |
2020 |
2020 |
2021 |
||
| Consolidated Statement of Operations Data | |||||
| Turkcell Turkey | 5,276.3 |
6,058.7 |
22,822.9 |
5,978.6 |
|
| Turkcell International | 559.6 |
747.3 |
2,542.4 |
708.2 |
|
| Techfin | 219.8 |
225.3 |
845.2 |
222.6 |
|
| Other | 602.5 |
840.9 |
2,893.3 |
917.1 |
|
| Total revenues | 6,658.2 |
7,872.2 |
29,103.7 |
7,826.5 |
|
| Direct cost of revenues | (4,569.5) |
(5,572.8) |
(20,336.1) |
(5,568.9) |
|
| Gross profit | 2,088.7 |
2,299.4 |
8,767.7 |
2,257.6 |
|
| Administrative expenses | (188.3) |
(210.7) |
(749.6) |
(199.4) |
|
| Selling & marketing expenses | (348.7) |
(400.8) |
(1,373.0) |
(358.2) |
|
| Other Operating Income / (Expense) | 631.9 |
(578.5) |
1,543.4 |
698.7 |
|
| Operating profit before financing and investing costs | 2,183.7 |
1,109.4 |
8,188.5 |
2,398.8 |
|
| Net impairment loses on financial and contract assets | (114.8) |
(79.5) |
(349.6) |
(49.5) |
|
| Income from investing activities | 80.9 |
4.5 |
167.8 |
50.7 |
|
| Expense from investing activities | - |
(30.2) |
(31.5) |
(47.6) |
|
| Share of profit of equity accounted investees | (3.2) |
(5.2) |
(13.8) |
17.7 |
|
| Income before financing costs | 2,146.6 |
999.1 |
7,961.4 |
2,370.1 |
|
| Finance income | 605.3 |
(486.5) |
1,788.6 |
1,373.1 |
|
| Finance expense | (1,633.6) |
341.9 |
(5,123.2) |
(2,294.1) |
|
| Income from continuing operations before tax and non-controlling interest | 1,118.3 |
854.5 |
4,626.8 |
1,449.1 |
|
| Income tax expense from continuing operations | (244.4) |
447.6 |
(387.2) |
(344.1) |
|
| Income from continuing operations before non-controlling interest | 873.9 |
1,302.0 |
4,239.6 |
1,104.9 |
|
| Discontinued operations | - |
- |
- |
- |
|
| Income before non-controlling interest | 873.9 |
1,302.0 |
4,239.6 |
1,104.9 |
|
| Non-controlling interest | (1.2) |
- |
(2.5) |
(0.0) |
|
| Net income | 872.7 |
1,302.0 |
4,237.1 |
1,104.9 |
|
| Net income per share from continuing operations | 0.40 |
0.60 |
1.94 |
0.51 |
|
| Other Financial Data | |||||
| Gross margin |
|
|
|
|
|
| EBITDA(*) | 2,809.0 |
3,243.0 |
12,270.3 |
3,306.5 |
|
| Total Capex | 1,560.0 |
2,884.7 |
9,078.9 |
2,257.3 |
|
| Operational capex | 836.7 |
1,904.2 |
5,391.6 |
1,467.9 |
|
| Licence and related costs | 28.1 |
9.3 |
42.8 |
- |
|
| Non-operational Capex | 695.2 |
971.2 |
3,644.6 |
789.4 |
|
| Consolidated Balance Sheet Data (at period end) | |||||
| Cash and cash equivalents | 9,212.2 |
11,860.6 |
11,860.6 |
13,467.0 |
|
| Total assets | 45,328.7 |
51,498.4 |
51,498.4 |
55,987.2 |
|
| Long term debt | 13,964.6 |
16,353.7 |
16,353.7 |
19,074.5 |
|
| Total debt | 19,499.9 |
21,586.4 |
21,586.4 |
24,895.8 |
|
| Total liabilities | 26,651.1 |
30,713.5 |
30,713.5 |
34,253.0 |
|
| Total shareholders’ equity / Net Assets | 18,677.6 |
20,784.9 |
20,784.9 |
21,734.3 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210430005481/en/
FAQ
What were Turkcell's Q1 2021 revenue figures?
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