Turkcell Iletisim Hizmetleri: First Quarter 2024 Results
Turkcell Iletisim Hizmetleri (NYSE:TKC) reported its first-quarter financial results for 2024, showcasing a strong start to the year. The company reported consolidated revenue of TRY 14.2 billion, a 22% year-on-year increase from Q1 2023. EBITDA increased by 18% to TRY 5.2 billion, while the net profit rose by 12% to TRY 1.7 billion. The company's guidance for 2024 has been upgraded, with an expected revenue growth of 20-22% and an EBITDA margin of 36-38%. Notable segments contributing to this growth include Turkcell Türkiye and Techfin. The Ukrainian operations have been classified as discontinued operations due to ongoing geopolitical issues, and the company is focusing on divesting these assets. Turkcell continues to prioritize digital transformation and expanding its digital services both within and outside Türkiye.
- Consolidated revenue increased by 22% year-on-year to TRY 14.2 billion.
- EBITDA rose by 18% year-on-year to TRY 5.2 billion.
- Net profit increased by 12% to TRY 1.7 billion.
- Upgraded guidance for 2024, with expected revenue growth of 20-22% and an EBITDA margin of 36-38%.
- Strong performance from Turkcell Türkiye and Techfin segments.
- Continued focus on digital transformation and expansion of digital services.
- Ukrainian operations classified as discontinued due to geopolitical issues, leading to divestment.
- Potential uncertainties related to hyperinflationary accounting practices and their impact on financial reporting.
Insights
The first quarter results showcase a strong performance by Turkcell Iletisim Hizmetleri A.S. A notable aspect is the upgraded guidance, indicating management’s confidence in the business trajectory. The upgrade could suggest potential revenue growth and better operational efficiencies.
A key insight for investors is the impact of hyperinflationary accounting. Adjusting financial results to reflect the purchasing power of the Turkish Lira as of March 31, 2024, is important in understanding the real financial health in an inflationary environment. This approach helps in making fair comparisons year-on-year and differentiating between nominal and real growth.
Moreover, the classification of their Ukrainian operations as discontinued is significant. This move may reduce uncertainty and focus resources on more stable regions, potentially leading to improved financial stability and reduced exposure to geopolitical risks. The strategic decision to divest could lead to immediate financial benefits, including one-time gains from the sale and reduced operational costs.
It is important to consider how these factors could influence the stock's valuation in both the short and long term. While the upgraded guidance is a positive signal, the real impact of inflation and geopolitical risk management should be closely monitored.
Turkcell's performance in the first quarter, particularly the upgraded guidance, reflects positively on their market positioning. The company's diversified business strategy, segmented into telecom, digital services and financial services, appears to be paying off. Each segment’s performance in different geographies could be a key driver of sustainable growth. The disposal of Ukrainian operations aligns with a strategic focus on consolidating efforts in more promising markets.
Retail investors should take note of the digital services segment, which is likely to benefit from ongoing digital transformation trends. The emphasis on financial technology, as indicated by their 'Techfin' segment, positions Turkcell well in the burgeoning fintech market.
Understanding the regional dynamics and Turkcell’s response to hyperinflationary pressures through IAS 29 adjustments is critical. These factors collectively provide insights into future revenue streams and market penetration capabilities, boosting investor confidence in Turkcell's long-term strategies.
“STRONG START TO 2024; GUIDANCE UPGRADED”
- 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 Türkiye" which comprises our telecom, digital services and digital business services related businesses in Türkiye (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 Türkiye only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Türkiye, 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 Türkiye (BeST and KKTCELL).
-
As of December 31, 2023, our Lifecell, UkrTower, and Global LLC operations in
Ukraine have been classified as a disposal group held for sale and as a discontinued operation.
- “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.
-
Discontinued operations in
Ukraine include Lifecell LLC, LLC Global Bilgi, and LLC Ukrtower.
- This press release provides a year-on-year comparison of our key indicators and figures in parentheses following the operational and financial results for March 31, 2024 refer to the same item as at and for the three months ended March 31, 2023. For further details, please refer to our consolidated financial statements and notes as at and for March 31, 2024, 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 quarter of 2023, and 2024 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 percentage comparisons appearing in this press release reflect mathematical calculation.
NOTICE
This press release contains the Company’s financial information for the period ended March 31, 2024 prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). This press release contains the Company’s financial information prepared in accordance with International Accounting Standard 29, Financial Reporting in Hyperinflationary Economies (“IAS29"). Therefore, the financial statement information included in this press release for the periods presented is expressed in terms of purchasing power of the Turkish Lira as of March 31, 2024. The Company restated all non-monetary items in order to reflect the impact of the inflation restatement reporting in terms of the measuring unit current as of March 31, 2024. Comparative financial information has also been restated using the general price index of the current period. This release includes forward-looking statements within the meaning of Section 27A of the
Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. In addition, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Many factors could cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by forward-looking statements. Should one or more of these risks or uncertainties materialize, or underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, intended, planned or projected.
These forward-looking statements are based upon a number of assumptions and other important factors that could cause our actual results, performance or achievements to differ materially from our future results, performance or achievements expressed or implied by such forward-looking statements. 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 2023 filed with the
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.
FINANCIAL HIGHLIGHTS
TRY million |
Q123 |
Q124 |
y/y% |
Revenue |
27,569 |
30,822 |
|
EBITDA1 |
10,354 |
12,754 |
|
EBITDA Margin (%) |
|
|
3.8pp |
EBIT2 |
2,533 |
3,522 |
|
EBIT Margin (%) |
|
|
2.2pp |
Net Income / (Loss) |
(269) |
2,635 |
n.m |
FIRST QUARTER HIGHLIGHTS
-
Financial performance accelerated on solid results:
-
Group revenues up
11.8% year-on-year supported mainly by strong ARPU growth and the larger postpaid subscriber base of Turkcell Türkiye as well as the contribution of the techfin business, and digital services & solutions -
EBITDA up
23.2% , leading to an EBITDA margin of41.4% ; EBIT up39.0% , resulting in an EBIT margin of11.4% - Net income was TRY2.6 billion
-
Net leverage3 level at 0.6x; net long FX position of
US $158 million
-
Group revenues up
-
Solid operational momentum:
- Turkcell Türkiye subscriber base4 up by 333 thousand net additions
- 472 thousand mobile postpaid net additions
- 50 thousand fixed subscriber net additions; 48 thousand fiber net additions
- 44 thousand new fiber homepasses
-
Mobile ARPU5 growth of
17.1% ; residential fiber ARPU growth of13.7%
-
We have upgraded our revenue growth guidance6 for 2024. Accordingly, we now target low-double-digit revenue growth rather than high single digit growth. We maintain our EBITDA margin target of around
42% , and operational capex over sales ratio7 guidance at around23% -
General Assembly meeting held on May 2nd:
- TRY6.3 billion dividend distribution was approved; the payment will be made on December 5th
(1) EBITDA is a non-GAAP financial measure. See page 14 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) Starting from Q421, we have revised the definition of our net debt calculation to include "financial assets” reported under current and non-current assets. Required reserves held in CBRT balances are also considered in net debt calculation. We believe that these assets are highly liquid and can be easily converted to cash without significant change in value.
(4) Including mobile, fixed broadband, IPTV, and wholesale (MVNO&FVNO) subscribers
(5) Excluding M2M
(6) The guidance for the year 2024 includes the effects of implementing inflation accounting in accordance with IAS 29. Our 2024 guidance has been established using a certain number of assumptions regarding factors beyond our control, including in relation to macroeconomic indicators such as expected inflation levels. In particular, our 2024 guidance is based on an assumed annual inflation rate of
(7) Excluding license fee
For further details, please refer to our consolidated financial statements and notes as at March 31, 2024 via our website in the Investor Relations section (www.turkcell.com.tr).
COMMENTS BY CEO, ALİ TAHA KOÇ, PhD
We are delighted to celebrate our 30th anniversary as the pioneer of Türkiye's digital transformation. As Turkcell, we have introduced numerous innovations in the industry. Today, we are entering an era wherein we will solidify our leadership of Türkiye's digital transformation by focusing on our technological capabilities and bringing global technological advancements to our country. Moreover, we are proud to enter our 30th year with strong financial and operational results.
A strong start to 2024
Although the first quarter of 2024 was impacted by economic and geopolitical uncertainties, it was a period where hopes for macroeconomic normalization began to increase. Domestically, the Central Bank of the Republic of Türkiye's controlled interest rate hikes were monitored amid reaccelerated inflation, while global attention was on the Fed's cautious approach to interest rate cuts.
In the first quarter of the year, we achieved strong growth by enlarging our subscriber base with our value-oriented postpaid and fiber subscribers, along with the support of our digital services and techfin business. Our ongoing inflationary pricing policy has significantly contributed to strengthening our company's financial performance. Our group revenues increased by
Our operational performance started the year strong, led by the mobile segment. We gained 229 thousand net mobile subscribers in the first quarter. While our postpaid subscriber base posted an increase of net 472 thousand in this quarter, our net addition for the past twelve months surpassed 1.7 million subscribers. Other sector players also made the price adjustments we made during this period. While aggressive offers from competitors were less observed this quarter, the Mobile Number Portability (MNP) market volume also contracted compared to the previous quarter. Thanks to the increasing contribution of sequential price adjustments, the postpaid subscriber base, which expanded to
We maintained our focus on fiber subscribers in the fixed broadband segment. With demand for high-speed and quality fiber services remaining strong, we gained a net of 48 thousand fiber subscribers, pushing our fiber subscriber base beyond 2.3 million. Our strategy of shifting customers to 12-month contracts contributed to limiting the delaying effect of inflation on our growth performance. Thanks to this strategy, the share of 12-month contracted subscribers in residential fiber base reached
Digital services continue to drive our financial performance
The growth of our digital services continues to support our group revenues. Revenues from the stand-alone paid users of our digital services grew by
Digital Business Services provide cloud-based software services enabling automation in business processes, end-to-end digitalization, data center services, and next-generation technologies such as the Internet of Things to our corporate customers. The revenue generated by these services amounted to TRY 2.8 billion this quarter. The revenues from our cloud services, where we provide value-added services and operate four next-generation data centers with a total IT capacity of 54 MWs, recorded growth of
Our Techfin segment, with the contributions of our subsidiaries Financell4 and Paycell, significantly contributed to the group's growth in the first quarter. Financell, with 1.1 million active customers, reached a loan portfolio of TRY 6.1 billion, and with rising interest rates, its revenues rose
We pioneer innovation, social responsibility, and sustainability
By carrying the 'Turkcell and Technology' focus to the international domain, we participated in the 'Sustainable Digital Transformation' panel at the GSMA Mobile World Congress in
As Türkiye's leading technology integrator, we hold data, energy, artificial intelligence, and cybersecurity in sharp relief. In a digital world, we consider data generated by people and objects the most valuable raw material. In this context, as Türkiye's largest data center operator, I emphasize our company's superior position in the industry.
Our Board of Directors TRY 6.3 billion dividend proposal was approved at the Annual General Assembly meeting of May 2, 2024. We will continue to work with dedication to sustain our successful financial and operational results while maintaining our robust balance sheet.
We revise our guidance upwards
Considering our first quarter performance, we revise our guidance6 upwards. We expect low-double-digit growth of Group revenues in real terms in 2024. We maintain our EBITDA margin expectation of approximately
As we celebrate our company's 30th anniversary with joy and pride, we confidently advance towards making Turkcell the leader of Türkiye's Digital Century. We will continue to leverage the opportunities provided by technology to build on our sustainable successes and add value to our country.
(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) Excluding M2M
(3) Including IPTV, OTT TV, fizy, lifebox and GAME+
(4) Following the change in organizational structure, the revenues of Turkcell Sigorta Aracılık Hizmetleri A.Ş. (Insurance Agency), which was previously managed under Financell, have are now classified as "Other" in the Techfin segment as of the first quarter of 2023.
(5) 3-month active user
(6) The guidance for the year 2024 includes the effects of implementing inflation accounting in accordance with IAS 29. Our 2024 guidance has been established using a certain number of assumptions regarding factors beyond our control, including in relation to macroeconomic indicators such as expected inflation levels. In particular, our 2024 guidance is based on an assumed annual inflation rate of
(7) Excluding license fee
FINANCIAL AND OPERATIONAL REVIEW
Financial Review of Turkcell Group
Profit & Loss Statement (million TRY) |
Q123 |
Q124 |
y/y% |
Revenue |
27,569.1 |
30,822.3 |
|
Cost of revenue1 |
(14,487.4) |
(14,948.1) |
|
Cost of revenue1/Revenue |
( |
( |
4.0pp |
Gross Margin1 |
|
|
4.0pp |
Administrative expenses |
(916.1) |
(1,161.1) |
|
Administrative expenses/Revenue |
( |
( |
(0.5pp) |
Selling and marketing expenses |
(1,450.5) |
(1,757.9) |
|
Selling and marketing expenses/Revenue |
( |
( |
(0.4pp) |
Net impairment losses on financial and contract assets |
(361.2) |
(200.9) |
( |
EBITDA2 |
10,353.9 |
12,754.3 |
|
EBITDA Margin |
|
|
3.8pp |
Depreciation and amortization |
(7,820.4) |
(9,231.9) |
|
EBIT3 |
2,533.5 |
3,522.4 |
|
EBIT Margin |
|
|
2.2pp |
Net finance income / (costs) |
(872.0) |
160.8 |
n.m |
Finance income |
1,456.2 |
5,477.3 |
|
Finance costs |
(1,885.5) |
(7,964.1) |
|
Monetary gain / (loss) |
(442.8) |
2,647.6 |
n.m |
Other income / (expenses) |
(232.8) |
(218.4) |
( |
Non-controlling interests |
0.3 |
5.4 |
n.m |
Share of profit of equity accounted investees |
94.0 |
(55.9) |
( |
Income tax expense |
(2,319.1) |
(1,320.4) |
( |
Profit /(loss) from discontinued operations |
526.8 |
540.6 |
|
Net Income |
(269.4) |
2,634.6 |
n.m |
(1) Excluding depreciation and amortization expenses.
(2) EBITDA is a non-GAAP financial measure. See page 14 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.
Revenue of the Group grew by
Turkcell Türkiye revenues, comprising
- Consumer business rose4 by
- Corporate revenues4 decreased by
- Standalone digital services revenues from consumer and corporate segments grew
- Wholesale revenues decreased
(4) Following the change in the organizational structure, the revenues from sole proprietorship subscribers that we define as Merchant, which were previously managed under the Corporate segment, are being reported under the Consumer segment as of and from the third quarter of 2023. Within this scope, past data has been revised for comparative purposes.
Turkcell International revenues1, comprising
Techfin segment revenues, comprising
Other subsidiaries’ revenues, at
Cost of revenue (excluding depreciation and amortization) decreased to
Administrative expenses increased to
Selling and marketing expenses increased to
Net impairment losses on financial and contract assets was at
EBITDA2 rose by
- Turkcell Türkiye’s EBITDA rose
- Turkcell International (excl.
- Techfin segment EBITDA declined
- The EBITDA of other subsidiaries was TRY84 million (TRY11 million) in Q124.
Depreciation and amortization expenses increased
Net finance income of TRY160.8 million (negative TRY872 million) was recorded for Q124, including TRY2.6 billion monetary gain and net FX losses of TRY2.3 billion.
See Appendix A for details of net foreign exchange gain and loss.
Other expenses decreased to TRY218 million (TRY232 million) in Q124.
Income tax expense increased to TRY1,320 million (TRY2,319 million) due mainly to a lower corporate and deferred tax expense compared to the previous year.
Profit /(loss) from discontinued operations of TRY541 million (TRY527 million) was recorded in Q124.
Net income of the Group was TRY2.6 billion (negative TRY269 million) in Q124. This result was mainly due to significant contributions from monetary gains and strong performance at the EBITDA level.
Total cash & debt: Consolidated cash as of March 31, 2024, decreased to TRY48,779 million compared to TRY57,507 million as of December 31, 2023. Please recall that the second installment of the earthquake donation, eurobond purchasing, personnel bonus payment, and wireless fee tax were paid in this quarter. Excluding FX swap transactions,
(1) As of December 31, 2023, our Lifecell, UkrTower, and Global LLC operations in
(2) EBITDA is a non-GAAP financial measure. See page 14 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income.
Consolidated debt as of March 31, 2024, increased to TRY98,050 million from TRY96,750 million as of December 31, 2023 due mainly to the impact of currency movements. Please note that TRY3,197 million of our consolidated debt is comprised of lease obligations. Please note that
Net debt1 as of March 31, 2024, increased to TRY33,441 million from TRY27,389 million as of December 31, 2023 with a net debt to EBITDA ratio of 0.6x times.
Turkcell Group had a long FX position of
Capital expenditures: Capital expenditures, including non-operational items, were at TRY7,508 million in Q124.
Operational capital expenditures (excluding license fees) at the Group level were at
Capital expenditures (million TRY) |
Q1232 |
Q1243 |
Operational Capex |
6,000.0 |
5,596.7 |
License and Related Costs |
- |
- |
Non-operational Capex (Including IFRS15 & IFRS16) |
2,360.0 |
1,911.3 |
Total Capex |
8,360.0 |
7,508.0 |
(1) Starting from Q421, we have revised the definition of our net debt calculation to include "financial assets” reported under current and non-current assets. Required reserves held in CBRT balances are also considered in net debt calculation. We believe that these assets are highly liquid and can be easily converted to cash without significant change in value.
(2) Including Ukraine operations
(3) Excluding Ukraine operations
Operational Review of Turkcell Türkiye
Summary of Operational Data |
Q123 |
Q423 |
Q124 |
y/y % |
q/q% |
Number of subscribers1 (million) |
41.7 |
42.5 |
42.8 |
|
|
Mobile Postpaid (million) |
25.9 |
27.2 |
27.6 |
|
|
Mobile M2M (million) |
4.1 |
4.5 |
4.6 |
|
|
Mobile Prepaid (million) |
11.6 |
10.8 |
10.6 |
( |
( |
Fiber (thousand) |
2,159.7 |
2,291.0 |
2,338.6 |
|
|
ADSL (thousand) |
759.0 |
760.7 |
762.3 |
|
|
Superbox (thousand)2 |
676.5 |
719.9 |
737.6 |
|
|
Cable (thousand) |
42.4 |
38.5 |
39.2 |
( |
|
IPTV (thousand) |
1,309.3 |
1,409.2 |
1,450.1 |
|
|
Churn (%)3 |
|
|
|
|
|
Mobile Churn (%) |
|
|
|
(0.2pp) |
(0.9pp) |
Fixed Churn (%) |
|
|
|
(0.2pp) |
(0.3pp) |
Average mobile data usage per user (GB/user) |
16.2 |
17.4 |
17.8 |
|
|
(1) Including mobile, fixed broadband, IPTV, and wholesale (MVNO&FVNO) subscribers
(2) Superbox subscribers are included in mobile subscribers.
(3) Churn figures represent average monthly churn figures for the respective years.
ARPU (Average Monthly Revenue per User) (TRY) |
Q123 |
Q124 |
y/y % |
Mobile ARPU, blended |
156.0 |
180.2 |
|
Mobile ARPU, blended (excluding M2M) |
173.4 |
203.1 |
|
Postpaid |
185.5 |
208.0 |
|
Postpaid (excluding M2M) |
218.0 |
247.0 |
|
Prepaid |
91.6 |
109.3 |
|
Fixed Residential ARPU, blended |
202.3 |
228.9 |
|
Residential Fiber ARPU |
203.9 |
231.9 |
|
Turkcell Türkiye's customer base continued to expand, reaching 42.8 million with a net quarterly addition of 333 thousand, driven by strong postpaid subscriber net addition performance in the first quarter of the year. This strong performance led us to achieve a total of 1.7 million postpaid net additions in the last 12 months.
On the mobile front, our subscriber base expanded to 38.2 million on 229 thousand net additions in Q124. This was driven by 472 thousand net additions from the postpaid subscriber base, which reached
On the fixed front, our subscriber base reached 3.1 million on 50 thousand quarterly net additions. Our fiber subscriber base expanded by 48 thousand quarterly and 179 thousand annual net additions. Meanwhile, IPTV customers reached to 1.5 million on 41 thousand quarterly and 141 thousand annual net additions. The average monthly fixed churn rate at
Average monthly mobile data usage per user rose
TURKCELL INTERNATIONAL
BeST1 |
Q123 |
Q124 |
y/y% |
Number of subscribers (million) |
1.5 |
1.5 |
- |
Active (3 months) |
1.1 |
1.2 |
|
Revenue (million BYN) |
39.3 |
48.8 |
|
EBITDA (million BYN) |
18.2 |
24.2 |
|
EBITDA margin (%) |
|
|
3.2pp |
Net loss (million BYN) |
(9.2) |
(5.0) |
( |
Capex (million BYN) |
18.8 |
25.4 |
|
Revenue (million TRY) |
453.9 |
467.6 |
|
EBITDA (million TRY) |
210.0 |
231.7 |
|
EBITDA margin (%) |
|
|
3.2pp |
Net loss (million TRY) |
(105.8) |
(47.1) |
( |
(1) BeST, in which we hold a
BeST revenues increased
BeST continued to offer LTE services to all six regions, encompassing 4.3 thousand sites in Q124. Enhanced LTE coverage has enabled BeST to expand its 4G subscriber base. Accordingly, 4G users reached
Kuzey Kıbrıs Turkcell2 (million TRY) |
Q123 |
Q124 |
y/y% |
Number of subscribers (million) |
0.6 |
0.6 |
- |
Revenue |
281.6 |
300.6 |
|
EBITDA |
91.7 |
81.5 |
( |
EBITDA margin (%) |
|
|
(5.5pp) |
Net income |
361.5 |
473.2 |
|
(2) Kuzey Kıbrıs Turkcell, in which we hold a
Kuzey Kıbrıs Turkcell revenues rose
TECHFIN
Paycell Financial Data (million TRY) |
Q123 |
Q124 |
y/y% |
Revenue |
511.1 |
681.0 |
|
EBITDA |
215.9 |
318.2 |
|
EBITDA Margin (%) |
|
|
4.5pp |
Net Income / (Loss) |
(71.7) |
74.0 |
n.m |
Paycell’s revenue rose by
The Pay Later service transaction volume (non-group) increased by
Financell1 Financial Data (million TRY) |
Q123 |
Q124 |
y/y% |
Revenue |
548.4 |
841.7 |
|
EBITDA |
230.5 |
93.8 |
( |
EBITDA Margin (%) |
|
|
(30.9pp) |
Net interest margin |
|
|
(2.4pp) |
Net loss |
(140.4) |
(94.3) |
( |
(1) Following the change in the organizational structure, the revenues of Turkcell Sigorta Aracılık Hizmetleri A.Ş. (Insurance Agency), which was previously managed under the Financell, has been classified from Financell to "Other" in the Techfin segment as of the first quarter of 2023.
Financell’s revenues rose by
Financell’s loan portfolio was at TRY6.1 billion in the first quarter of the year. Financell has provided loans to about 30 thousand corporate customers. Financell’s cost of risk was at
Turkcell Group Subscribers
Turkcell Group registered subscribers amounted to approximately 56.2 million as of March 31, 2024. This figure is calculated by taking the number of subscribers of Turkcell Türkiye, and of each of our subsidiaries. It includes the total number of mobile, fiber, ADSL, cable and IPTV subscribers of Turkcell Türkiye, and the mobile subscribers of lifecell*, BeST, and Kuzey Kıbrıs Turkcell.
Turkcell Group Subscribers |
Q123 |
Q124 |
y/y% |
Turkcell Türkiye subscribers1 (million) |
41.7 |
42.8 |
|
BeST ( |
1.5 |
1.5 |
- |
Kuzey Kıbrıs Turkcell |
0.6 |
0.6 |
- |
Discontinued operations – lifecell ( |
10.8 |
11.3 |
|
Turkcell Group Subscribers (million) |
54.6 |
56.2 |
|
(1) Subscribers to more than one service are counted separately for each service. Including mobile, fixed broadband, IPTV, and wholesale (MVNO&FVNO) subscribers
*Discontinued operations
DISCONTINUED OPERATIONS – lifecell (
lifecell1 Financial Data |
Q123 |
Q124 |
y/y% |
Revenue (million UAH) |
2,687.4 |
3,120.5 |
|
EBITDA (million UAH) |
1,605.0 |
1,696.7 |
|
EBITDA margin (%) |
|
|
(5.3pp) |
Net income (million UAH) |
515.6 |
582.7 |
|
Capex (million UAH) |
638.0 |
1,008.2 |
|
Revenue (million TRY) |
2,335.7 |
2,510.6 |
|
EBITDA (million TRY) |
1,395.0 |
1,365.1 |
( |
EBITDA margin (%) |
|
|
(5.3pp) |
Net income (million TRY) |
448.5 |
468.8 |
|
(1) Since July 10, 2015, we hold a
lifecell (
In TRY terms, lifecell’s revenue increased by
OVERVIEW OF THE MACROECONOMIC ENVIRONMENT
The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below.
|
Q123 |
Q423 |
Q124 |
y/y% |
q/q% |
GDP Growth (Türkiye) |
|
|
n.a |
n.a |
n.a |
Consumer Price Index (Türkiye)(yoy) |
|
|
|
18.0pp |
3.7pp |
US$ / TRY rate |
|
|
|
|
|
Closing Rate |
19.1460 |
29.4382 |
32.2854 |
|
|
Average Rate |
18.8577 |
28.4905 |
30.7624 |
|
|
EUR / TRY rate |
|
|
|
|
|
Closing Rate |
20.8021 |
32.5739 |
34.8023 |
|
|
Average Rate |
20.2424 |
30.7734 |
33.3856 |
|
|
US$ / UAH rate |
|
|
|
|
|
Closing Rate |
36.5686 |
37.9824 |
39.2214 |
|
|
Average Rate |
36.5686 |
36.6722 |
38.2281 |
|
|
US$ / BYN rate |
|
|
|
|
|
Closing Rate |
2.8571 |
3.1775 |
3.2498 |
|
|
Average Rate |
2.7505 |
3.1809 |
3.2100 |
|
|
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 and intangible assets (affecting relative depreciation expense and amortization 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
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 finance income and expense, other operating income and expense, investment activity income and expense, share of profit of equity accounted investees and minority interest.
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 to net profit, which we believe is the most directly comparable financial measure calculated and presented in accordance with IFRS.
Turkcell Group (million TRY) |
Q123 |
Q124 |
y/y% |
Consolidated profit before minority interest |
(269.7) |
2,629.1 |
n.m |
Profit /(loss) from discontinued operations |
526.8 |
540.6 |
|
Income tax expense |
(2,319.1) |
(1,320.4) |
( |
Consolidated profit before income tax & minority interest |
1,522.7 |
3,408.9 |
|
Share of profit of equity accounted investees |
94.0 |
(55.9) |
( |
Finance income |
1,456.2 |
5,477.3 |
|
Finance costs |
(1,885.5) |
(7,964.1) |
|
Monetary gain / (loss) |
(442.8) |
2,647.6 |
n.m |
Other income / (expenses) |
(232.8) |
(218.4) |
( |
EBIT |
2,533.5 |
3,522.4 |
|
Depreciation and amortization |
7,820.4 |
9,231.9 |
|
Adjusted EBITDA |
10,353.9 |
12,754.3 |
|
RECONCILIATION OF ARPU: ARPU is an operational measurement tool and the methodology for calculating performance measures such as ARPU varies substantially among operators and is not standardized across the telecommunications industry, and reported performance measures thus vary from those that may result from the use of a single methodology. Management believes this measure is helpful in assessing the development of our services over time. The following table shows the reconciliation of Turkcell Türkiye revenues to such revenues included in the ARPU calculations for Q1 2023 and Q1 2024.
Reconciliation of ARPU |
Q123 |
Q124 |
Turkcell Türkiye Revenue (million TRY) |
23,455.1 |
26,515.8 |
Telecommunication services revenue |
21,791.0 |
25,153.8 |
Equipment revenue |
1,314.5 |
1,012.6 |
Other* |
349.6 |
349.4 |
Revenues which are not attributed to ARPU calculation1 |
(3,987.5) |
(3,631.4) |
Turkcell Türkiye revenues included in ARPU calculation2 |
19,118.0 |
22,535.0 |
Mobile blended ARPU (TRY) |
156.0 |
180.2 |
Average number of mobile subscribers during the year (million) |
37.5 |
38.1 |
Fixed residential ARPU (TRY) |
202.3 |
228.9 |
Average number of fixed residential subscribers during the year (million) |
2.6 |
2.8 |
(1) Revenue from fixed corporate and wholesale business; digital business sales; tower business, and other non-subscriber-based revenues
(2) Revenues from Turkcell Türkiye included in ARPU calculation comprise telecommunication services revenue, equipment revenue and revenues which are not attributed to ARPU calculation.
*Including call center revenues
ABOUT TURKCELL: Turkcell is a digital operator headquartered in Türkiye, 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 – Türkiye,
Appendix A – Tables
Table: Net foreign exchange gain and loss details
Million TRY |
Q123 |
Q124 |
y/y% |
Net FX loss before hedging |
(418.5) |
(2,685.1) |
|
Swap interest income/(expense) |
89.9 |
184.6 |
|
Fair value gain on derivative financial instruments |
(203.9) |
193.9 |
n.m |
Net FX gain / (loss) after hedging |
(532.5) |
(2,306.6) |
|
Table: Income tax expense details
Million TRY |
Q123 |
Q124 |
y/y% |
Current tax expense |
(510.3) |
(44.7) |
( |
Deferred tax income / (expense) |
(1,808.8) |
(1,275.7) |
( |
Income tax expense |
(2,319.1) |
(1,320.4) |
( |
| TURKCELL ILETISIM HIZMETLERI A.S. IFRS SELECTED FINANCIALS (TRY Million) |
||
| Quarter Ended March 31, 2023 |
Quarter Ended March 31, 2024 |
|
| Consolidated Statement of Operations Data | ||
| Turkcell Turkey | 23,455.1 |
26,515.8 |
| Turkcell International | 797.5 |
815.0 |
| Fintech | 1,053.1 |
1,512.9 |
| Other | 2,263.4 |
1,978.6 |
| Total revenue | 27,569.1 |
30,822.3 |
| Total cost of revenue | (22,307.9) |
(24,180.0) |
| Total gross profit | 5,261.3 |
6,642.3 |
| Administrative expenses | (916.1) |
(1,161.1) |
| Selling & marketing expenses | (1,450.5) |
(1,757.9) |
| Other Income / (Expense) | (232.8) |
(218.4) |
| Net impairment loses on financial and contract assets | (361.2) |
(200.9) |
| Operating profit | 2,300.7 |
3,304.0 |
| Finance costs | (1,885.5) |
(7,964.1) |
| Finance income | 1,456.2 |
5,477.3 |
| Monetary gain (loss) | (442.8) |
2,647.6 |
| Share of profit of an associate and a joint venture | 94.0 |
(55.9) |
| Profit before income tax from continuing operations | 1,522.7 |
3,408.9 |
| Income tax income/ (expense) | (2,319.1) |
(1,320.4) |
| Profit for the year from continuing operations | (796.5) |
2,088.5 |
| Profit /(loss) from discontinued operations | 526.8 |
540.6 |
| Profit for the year | (269.7) |
2,629.1 |
| Non-controlling interests | 0.3 |
5.4 |
| Owners of the Company | (269.4) |
2,634.6 |
| Basic and diluted earnings per share for profit attributable to owners of the Company (in full TRY) | (0.1) |
1.2 |
| Basic and diluted earnings per share for profit from continuing operations attributable to owners of the Company (in full TRY) | (0.4) |
1.0 |
| Other Financial Data | ||
| Gross margin |
|
|
| EBITDA(*) | 10,353.9 |
12,754.3 |
| Total capex | 8,360.0 |
7,508.0 |
| Operational capex | 6,000.0 |
5,596.7 |
| Licence and related costs | - |
- |
| Non-operational capex | 2,360.0 |
1,911.3 |
| Consolidated Balance Sheet Data (at period end) | December 31, 2023 | March 31, 2024 |
| Cash and cash equivalents | 57,507.3 |
48,778.7 |
| Total assets | 284,303.0 |
282,258.6 |
| Long term debt | 66,675.5 |
65,177.1 |
| Total debt | 96,750.3 |
98,049.5 |
| Total liabilities | 143,655.2 |
138,814.2 |
| Total shareholders’ equity / Net Assets | 140,647.9 |
143,444.4 |
| (*) Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 14 For further details, please refer to our consolidated financial statements and notes as at 31 March 2024 on our website |
||
TURKCELL ILETISIM HIZMETLERI A.S.
|
||
Quarter Ended
|
Quarter Ended
|
|
| Consolidated Statement of Operations Data | ||
| Turkcell Turkey | 23,455.1 |
26,515.8 |
| Turkcell International | 797.5 |
815.0 |
| Fintech | 1,053.1 |
1,512.9 |
| Other | 2,263.4 |
1,978.6 |
| Total revenues | 27,569.1 |
30,822.3 |
| Direct cost of revenues | (22,307.9) |
(24,180.0) |
| Gross profit | 5,261.3 |
6,642.3 |
| Administrative expenses | (916.1) |
(1,161.1) |
| Selling & marketing expenses | (1,450.5) |
(1,757.9) |
| Other operating income | 2,066.3 |
3,614.4 |
| Other operating expense | (272.7) |
(489.4) |
| Operating profit | 4,688.3 |
6,848.3 |
| Impairment losses determined in accordance with TFRS 9 | (361.2) |
(200.9) |
| Income from investing activities | 856.2 |
1,123.9 |
| Expense from investing activities | (105.8) |
(38.0) |
| Share on profit of investments valued by equity method | 94.0 |
(55.9) |
| Income before financing costs | 5,171.5 |
7,677.4 |
| Finance income | 8.1 |
567.7 |
| Finance expense | (3,214.1) |
(7,483.8) |
| Monetary gain (loss) | (442.8) |
2,647.6 |
| Income from continuing operations before tax and non-controlling interest | 1,522.7 |
3,408.9 |
| Tax income (expense) from continuing operations | (2,319.1) |
(1,320.4) |
| Profit from continuing operations | (796.5) |
2,088.5 |
| Profit /(loss) from discontinued operations | 526.8 |
540.6 |
| Profit for the period | (269.7) |
2,629.1 |
| Non-controlling interest | 0.3 |
5.4 |
| Owners of the Parent | (269.4) |
2,634.6 |
| Earnings per share | (0.1) |
1.2 |
| Earnings per share from discontinued operations | (0.4) |
1.0 |
| Earnings per share from continuing operation | 0.2 |
0.2 |
| Other Financial Data | ||
| Gross margin |
|
|
| EBITDA(*) | 10,353.9 |
12,754.3 |
| Total capex | 8,360.0 |
7,508.0 |
| Operational capex | 6,000.0 |
5,596.7 |
| Licence and related costs | - |
- |
| Non-operational capex | 2,360.0 |
1,911.3 |
| Consolidated Balance Sheet Data (at period end) | December 31, 2023 | March 31, 2024 |
| Cash and cash equivalents | 57,507.3 |
48,778.7 |
| Total assets | 284,303.0 |
282,258.6 |
| Long term debt | 66,675.5 |
65,177.1 |
| Total debt | 96,750.3 |
98,049.5 |
| Total liabilities | 143,655.2 |
138,814.2 |
| Total shareholders’ equity / Net Assets | 140,647.9 |
143,444.4 |
| (*) Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 14 For further details, please refer to our consolidated financial statements and notes as at 31 March 2024 on our website |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240527165169/en/
For further information please contact Turkcell
Investor Relations
Tel: + 90 212 313 1888
investor.relations@turkcell.com.tr
Corporate Communications:
Tel: + 90 212 313 2321
Turkcell-Kurumsal-Iletisim@turkcell.com.tr
Source: Turkcell
FAQ
What were Turkcell's first-quarter 2024 revenues?
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What was Turkcell's net profit in Q1 2024?
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Why are Turkcell's Ukrainian operations classified as discontinued?
