Turkcell Iletisim Hizmetleri: Full Year 2023 Results
- None.
- None.
Insights
The disclosure of Turkcell's financial performance, particularly the achievement of double-digit real growth and the exceeding of guidance, is a significant indicator of the company's operational efficiency and market positioning. An evaluation of the financial results prepared under IFRS and TAS/TFRS suggests a robust accounting framework, ensuring transparency for investors. The segmentation of reporting into 'Turkcell Türkiye' and 'Turkcell International,' along with 'Techfin' and 'Other' categories, allows for a granular analysis of revenue streams and potential areas for capital allocation.
Investors may find the classification of certain operations in Ukraine as discontinued particularly noteworthy, as this reflects strategic shifts and potential future divestments. The financial impact of discontinued operations must be assessed, considering both the immediate financial implications and the longer-term strategic realignment. Moreover, the adherence to IAS 29 is critical in the context of hyperinflationary economies, which can significantly distort financial outcomes. This adherence indicates a proactive approach to financial reporting, providing stakeholders with a realistic view of financial health.
From a market perspective, Turkcell's performance in the telecom sector within Türkiye and its digital services operations abroad suggests a competitive edge in both domestic and international markets. The year-on-year comparison of key indicators serves as a benchmark for operational success and can influence investor sentiment. The strategic significance of the Techfin segment points to diversification efforts and the potential tapping into new revenue sources in financial services, a move that could resonate well with investors seeking growth in fintech.
The operational and financial data provided, particularly in a year-end report, is a critical tool for forecasting future market trends and understanding the company's trajectory. The mention of double-digit growth is likely to be received positively by the market, signaling strong performance and possibly affecting Turkcell's stock valuation. However, the impact of macroeconomic factors, such as currency fluctuations and inflation, must be monitored as they can affect the purchasing power parity and, consequently, the real growth figures.
The telecom industry is highly susceptible to technological advancements and regulatory changes. Turkcell's reported growth and segmentation indicate an adaptive business model that is responsive to the dynamic nature of the telecom sector. The focus on digital services and business services within Türkiye reflects an understanding of the evolving consumer demands and the shift towards digital transformation. Additionally, the international component of Turkcell's operations, particularly in the context of discontinued operations, suggests strategic repositioning which could streamline the company's focus and optimize resource allocation.
Understanding the implications of IAS29 in Turkcell's financial reporting is important for stakeholders, as it adjusts the financial statements to reflect the economic reality in hyperinflationary conditions. This level of detail in financial reporting is commendable and provides a clearer picture of the company's financial health. Stakeholders should interpret these results with an understanding of the broader industry trends, such as the increasing demand for digital services and the competitive landscape of the telecom industry.
Achieving Double-digit Real Growth;
Guidance Exceeded
- 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, Lifecell, UkrTower, and Global LLC have been classified as a disposal group held for sale and as a discontinued operation. Discontinued operations in
Ukraine include Lifecell LLC, LLC Global Bilgi, and LLC Ukrtower.
-
As of December 31, 2023, Lifecell, UkrTower, and Global LLC have been classified as a disposal group held for sale and as a discontinued operation. Discontinued operations in
- “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.
- This press release provides a year-on-year comparison of our key indicators and figures in parentheses following the operational and financial results for December 31, 2023 refer to the same item as at December 31, 2022. For further details, please refer to our consolidated financial statements and notes as at and for December 31, 2023, 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 full year of 2022, and 2023 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 year ended December 31, 2023 prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and includes certain financial information prepared in accordance with Turkish Accounting Standards (“TAS”) / Turkish Financial Reporting Standards (“TFRS”). This press release contains the Company’s financial information prepared in accordance with International Accounting Standard 29, Financial Reporting in Hyperinflationary Economies (“IAS29"). 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 2022 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 |
FY22 |
FY23 |
y/y% |
Revenue |
93,487 |
107,116 |
|
EBITDA1 |
36,608 |
43,877 |
|
EBITDA Margin (%) |
|
|
1.8pp |
EBIT2 |
4,012 |
12,578 |
|
EBIT Margin (%) |
|
|
7.4pp |
Net Income |
6,880 |
12,554 |
|
FULL YEAR HIGHLIGHTS
- Strong financial performance:
-
Group revenues up
14.6% supported mainly by accelerated ARPU growth and strong mobile postpaid subscriber net add performance. Our digital services and techfin business also contributed to overall revenue growth.
-
EBITDA up
19.9% leading to an EBITDA margin of41.0% ; EBIT up213.5% resulting in an EBIT margin of11.7%
-
Net income up
82.5% to TRY12.6 billion
-
Strong free cash flow3 generation of TRY7.3 billion; net leverage4 level at 0.5x; net long FX position of
US $22 million
- Solid operational momentum:
- Turkcell Türkiye subscriber base5 up by 799 thousand net additions
- 1.6 million mobile postpaid net additions
- 173 thousand fixed subscriber net additions; 169 thousand fiber net additions
- 5.8 million total homepasses; 386 thousand new fiber homepasses
-
Mobile ARPU6 growth of
18.4% ; residential fiber ARPU growth of0.7%
-
2024 guidance7; revenue growth target of high-single-digit, EBITDA margin target of around
42% , and operational capex over sales ratio8 target of around23%
(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) Free cash flow calculation includes EBITDA and the following items as per IFRS cash flow statement; acquisition of property, plant and equipment, acquisition of intangible assets, change in operating assets/liabilities, payment of lease liabilities and income tax paid.
(4) 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.
(5) Including mobile, fixed broadband, IPTV, and wholesale (MVNO&FVNO) subscribers
(6) Excluding M2M
(7) 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
(8) Excluding license fee
For further details, please refer to our consolidated financial statements and notes as at December 31, 2023 via our website in the Investor Relations section (www.turkcell.com.tr).
COMMENTS BY CEO, ALİ TAHA KOÇ, PhD
2023 was a year in which Türkiye's agenda was shaped by the February earthquake that came to be known as the disaster of the century, the general election period, and challenging macroeconomic conditions. Globally, the main impacts came from decelerated growth due to central banks' continued tightening policies, ongoing wars creating humanitarian crises, and the effects of climate change. Despite these challenges, I am proud to share with you our determination to further strengthen Türkiye's pioneering position on the journey of digital transformation.
During this time, we continued to enhance our technological infrastructure, know-how, and capabilities to provide our customers with a seamless and high-quality communication experience. We aim to develop new strategies to increase Türkiye's digital access and make technology more inclusive. With our projects supporting digital transformation in various fields, from education and healthcare to business and social life, as Türkiye's Turkcell, we continue to invest in the development of the technology sector and the future of our country.
Yet another year highlighted by prominent achievements…
We completed the year 2023 with a performance that exceeded our expectations. In 2023, according to inflation accounting practices*, our consolidated revenues rose
In 2023, while maintaining our leadership in the mobile segment, we remain committed to our rational pricing strategy, despite the aggressive short-term campaigns of our competitors. This approach enabled us to maintain our dynamic position in the industry. Moreover, thanks to our customer-oriented strategy, innovative and comprehensive offerings, large sales network strengthened by digital channels, and best-in-class infrastructure, we had 799 thousand net subscriber additions. This year, we maintained our focus on postpaid subscribers, ensuring a higher revenue growth contribution, and gained a net 1.6 million subscribers. On the fixed broadband side, while focusing on penetration with our fiber product, we also remained focused on revenue growth. By extending our end-to-end fiber service to an additional 386 thousand home passes in 2023, the total number of households reached rose to 5.8 million. Our fiber subscribers reached 2.3 million.
Our strategic focus areas continue to support growth
We continued our digital service portfolio activities, comprising significant brands such as BiP, TV+, lifebox, fizy, GAME+, and digital advertising. In 2023, the number of stand-alone paid users2 enjoying our digital services increased by
In 2023, Digital Business Services remained the primary supporter of corporate customers on their digital transformation journey. In addition to end-to-end tailored digitalization services, data centers and cloud services were the key contributors to revenue growth. We have completed over 3,500 projects in system integration and managed services to date; the backlog from system integration projects has reached TRY3.1 billion. In the digital data era, we consider the ownership of data, the raw material of industrial transformation, remaining in our country to be an important initiative. To keep Türkiye's data within the country, we are committed to retaining our leadership position in the data center market. We intend to further bolster our investments, having already allocated
Our techfin services, Financell3 and Paycell, continued their operations successfully in 2023. Financell, continuing to diversify its product portfolio according to the financing needs of individual and corporate customers, had reached a credit portfolio of TRY6.2 billion by the end of 2023. Paycell, with its extensive product portfolio that provides fast and secure payment solutions, had reached 8.0 million users by the end of 2023. While the "Pay Later" service, which constitutes a significant portion of Paycell's revenues, remains the key vertical driving growth, POS solutions, which have been rapidly expanding since the last quarter of the previous year, have also supported Paycell's growth.
We are shaping the future with our sustainability vision
As per our sustainability strategy, we aim to positively impact our environment, society, business, and planet in all our endeavors. Therefore, as a leading company in the technology and telecommunications sector, we integrate sustainability into our business strategy and operations. In this context, we don't just consider our investment in renewable energy an environmentally friendly step but also an essential element in managing our energy needs. In addition to our wind energy power plant, our solar energy plant projects, which will have an installed capacity of 300 MW, along with greenfield and rooftop solar power installations, we are confidently moving towards a future where we expect to meet
In addition to these efforts, as Turkcell, we greatly emphasize social investment projects to ensure equal opportunities for all segments of our society, utilizing the inclusive power of digitalization. We carry out projects that prioritize social benefit, promote digital literacy, raise awareness about the conscious use of technology, and enable participation in various aspects of life for many groups, from children to young people and from the elderly to individuals with disabilities.
While supporting environmental sustainability with our renewable energy investments, we aim to add value to all institutions and businesses through digital transformation. This dual approach brings us closer to our goal of becoming a net-zero company and strengthens the social integration and inclusivity of technology. In the coming periods, through the steps we will take towards environmental and social sustainability, we believe that as Turkcell, the leading telecommunication and technology company, we will shape Türkiye's Digital Century.
Turkcell means Technology
Meanwhile, our approach to artificial intelligence technologies strikes a delicate balance between fostering innovation and prioritizing societal benefit. We are fully confident that, in line with this strategy, we will play a critical role in shaping the future. As Turkcell, we effectively integrate artificial intelligence solutions into every aspect of our operations while ensuring the ethical use of AI in our actions. The chatbot that we have developed, supporting around 200 thousand customers per day, provides a tangible example of how these technologies can be implemented in business models. Additionally, we have AI-supported recommendation systems on our fizy and TV+ platforms, enhancing our capacity to provide content tailored to users' preferences. Furthermore, Turkcell's artificial intelligence team has played a significant role in developing the 'In-Car Face Detection, Recognition, and Analysis System' for Turkiye's domestic pride, Togg, the Turkish EV. These projects epitomize how technology transforms our business processes and contributes to social benefit.
We aim to elevate Turkcell's strongest and most significant capability, the best-in-class mobile and fixed network infrastructure, to the next level, focusing on increasing FTTS (Fiber to the Site) and modernizing through GPON (Gigabit Passive Optical Network) in the upcoming period. We continue to take determined steps towards being the best in the technologies of 5G and beyond. In this context, alongside our network preparations, we are increasing R&D collaboration with our business partners.
In 2024, we expect4 high-single-digit growth in Group revenues, an EBITDA margin of around
In the upcoming periods, our determination to carry Turkcell and our country to a brighter future with a focus on innovation and our spirit of excellence will continue uninterrupted, positioning Turkcell as the pioneer of Türkiye's Digital Century.
I express my gratitude to our Board of Directors, colleagues, customers, and shareholders who have been by my side throughout this successful journey. Together, I am fully confident that we will achieve further 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
(2) Including IPTV, OTT TV, fizy, lifebox and GAME+
(3) 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. Within this scope, all past data has been revised for comparability purposes.
(4) 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
(5) Excluding license fee
*International Accounting Standard 29, Financial Reporting in Hyperinflationary Economies (“IAS29")
FINANCIAL AND OPERATIONAL REVIEW OF FULL YEAR
Financial Review of Turkcell Group
Profit & Loss Statement (million TRY) |
Year |
||
FY22 |
FY23 |
y/y% |
|
Revenue |
93,486.8 |
107,116.2 |
|
Cost of revenue1 |
(49,084.9) |
(53,119.0) |
|
Cost of revenue1/Revenue |
( |
( |
2.9pp |
Gross Margin1 |
|
|
2.9pp |
Administrative expenses |
(2,579.4) |
(3,429.5) |
|
Administrative expenses/Revenue |
( |
( |
(0.4pp) |
Selling and marketing expenses |
(4,592.8) |
(5,682.3) |
|
Selling and marketing expenses/Revenue |
( |
( |
(0.4pp) |
Net impairment losses on financial and contract assets |
(622.0) |
(1,008.2) |
|
EBITDA2 |
36,607.7 |
43,877.1 |
|
EBITDA Margin |
|
|
1.8pp |
Depreciation and amortization |
(32,596.0) |
(31,299.0) |
( |
EBIT3 |
4,011.7 |
12,578.1 |
|
EBIT Margin |
|
|
7.4pp |
Net finance income / (costs) |
(224.4) |
(3,451.1) |
1, |
Finance income |
3,957.7 |
12,663.7 |
|
Finance costs |
(11,949.2) |
(19,931.6) |
|
Monetary gain / (loss) |
7,767.1 |
3,816.9 |
( |
Other income / (expenses) |
(1,058.4) |
(4,765.6) |
|
Non-controlling interests |
1.6 |
21.8 |
1, |
Share of profit of equity accounted investees |
522.2 |
1,525.2 |
|
Income tax expense |
2,785.3 |
4,675.9 |
|
Profit /(loss) from discontinued operations |
842.4 |
1,969.7 |
|
Net Income |
6,880.4 |
12,554.0 |
|
(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.
Revenue of the Group grew by
For the full year, Turkcell Türkiye revenues, comprising
- Consumer business rose4
- Corporate revenues4 rose
- Standalone digital services revenues from consumer and corporate segments grew
(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.
- Wholesale revenues grew
Turkcell International revenues (excl.
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
EBITDA1 rose by
- Turkcell Türkiye’s EBITDA rose
- Turkcell International (excl.
- Techfin segment EBITDA declined by
- The EBITDA of other subsidiaries declined by
Depreciation and amortization expenses decreased by
Net finance costs increased to TRY3,451 million (TRY224 million) in FY23. This was driven mainly by higher FX losses which were partially offset by derivative gains, and the fair value gains registered on currency-protected time deposits. Additionally, higher interest expenses limited the positive impact.
See Appendix A for details of net foreign exchange gain and loss.
Other expenses increased to TRY4,766 million (TRY1,058 million) for the full year mainly due to donation and litigation expenses.
See Appendix A for details of net foreign exchange gain and loss.
Income tax expense: The income tax expense of TRY4,676 million (TRY2,785 million) was reported, mainly due to an increase in deferred income tax expense triggered by the implementation of inflationary accounting in statutory accounts.
Net income of the Group increased by
(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.
Total cash & debt: Consolidated cash as of December 31, 2023, increased to TRY49,979 million compared to TRY42,776 million as of December 31, 2022. This was driven mainly by the positive impact of currency movements. Excluding FX swap transactions,
Consolidated debt as of December 31, 2023, decreased to TRY84,084 million from TRY88,737 million as of December 31, 2022 due mainly to the impact of currency movements. Please note that TRY2,428 million of our consolidated debt is comprised of lease obligations. Please note that
Net debt1 as of December 31, 2023, was at TRY23,803 million with a net debt to EBITDA ratio of 0.5x times.
Turkcell Group had a long FX position of
Capital expenditures: Capital expenditures, including non-operational items were at TRY33,950 million in FY23.
For the full year, operational capital expenditures (excluding license fees) at the Group level were at
Capital expenditures (million TRY) |
Year |
|
FY222 |
FY233 |
|
Operational Capex |
19,533.1 |
21,430.3 |
License and Related Costs |
536.8 |
3,632.9 |
Non-operational Capex (Including IFRS15 & IFRS16) |
9,815.8 |
8,886.9 |
Total Capex |
29,885.6 |
33,950.0 |
(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
The actual impact of the earthquakes was in line with our initial assessment, which we have communicated in our Q422 results.
Operational Review of Turkcell Türkiye
Summary of Operational Data |
Year |
||
FY22 |
FY23 |
y/y % |
|
Number of subscribers1 (million) |
41.7 |
42.5 |
|
Mobile Postpaid (million) |
25.6 |
27.2 |
|
Mobile M2M (million) |
4.0 |
4.5 |
|
Mobile Prepaid (million) |
12.0 |
10.8 |
( |
Fiber (thousand) |
2,121.8 |
2,291.0 |
|
ADSL (thousand) |
751.4 |
760.7 |
|
Superbox (thousand)2 |
670.7 |
719.9 |
|
Cable (thousand) |
43.9 |
38.5 |
( |
IPTV (thousand) |
1,281.7 |
1,409.2 |
|
Churn (%)3 |
|
|
|
Mobile Churn (%) |
|
|
- |
Fixed Churn (%) |
|
|
0.1pp |
ARPU (Average Monthly Revenue per User) (TRY) |
|
|
|
Mobile ARPU, blended |
133.5 |
155.6 |
|
Mobile ARPU, blended (excluding M2M) |
146.9 |
174.0 |
|
Postpaid |
161.6 |
181.7 |
|
Postpaid (excluding M2M) |
187.7 |
214.7 |
|
Prepaid |
77.0 |
96.0 |
|
Fixed Residential ARPU, blended |
190.0 |
190.0 |
- |
Residential Fiber ARPU |
190.8 |
192.1 |
|
Average mobile data usage per user (GB/user) |
14.7 |
17.0 |
|
(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.
Turkcell Türkiye subscriber base grew by 799 thousand net additions in FY23 to 42.5 million. In addition, we have achieved 5.8 million net subscriber additions in the last 3 years thanks to our wide range of solutions tailored to customer preferences, our pioneering campaigns designed to simplify their lives, our superior infrastructure, a unique customer experience and our analytical capabilities.
On the mobile front, our subscriber base expanded to 38.0 million on 493 thousand net annual additions in FY23. This was driven by 1.6 million net additions from the postpaid subscriber base, which reached
On the fixed front, we saw a net increase of 169 thousand fiber subscribers in FY23, attributable to our investments in fiber networks, and the robust demand for high-speed, and quality broadband services. Total fixed subscribers reached 3.1 million on 38 thousand quarterly and 173 thousand annual net additions. Meanwhile, IPTV customers exceeded 1.4 million on 34 thousand quarterly and 127 thousand annual net additions.
The average yearly mobile churn rate was at
On an inflation adjusted basis, our mobile ARPU (excluding M2M) rose
Average monthly mobile data usage per user rose
Total smartphone penetration on our network reached
TURKCELL INTERNATIONAL
BeST1 |
|
Year |
|
FY22 |
FY23 |
y/y% |
|
Number of subscribers (million) |
1.5 |
1.5 |
- |
Active (3 months) |
1.1 |
1.2 |
|
Revenue (million BYN) |
146.2 |
175.5 |
|
EBITDA (million BYN) |
44.2 |
80.2 |
|
EBITDA margin (%) |
|
|
15.5pp |
Net loss (million BYN) |
(124.8) |
(10.8) |
( |
Capex (million BYN) |
81.4 |
77.1 |
( |
Revenue (million TRY) |
1,542.3 |
1,390.3 |
( |
EBITDA (million TRY) |
468.8 |
633.1 |
|
EBITDA margin (%) |
|
|
15.1pp |
Net loss (million TRY) |
(1,435.8) |
(53.2) |
( |
(1) BeST, in which we hold a
BeST revenues increased
BeST continued to offer LTE services to all six regions, encompassing 4.2 thousand sites. Extended LTE coverage allows BeST to increase the penetration of 4G subscribers. Accordingly, 4G users reached
Kuzey Kıbrıs Turkcell2 (million TRY) |
|
Year |
|
FY22 |
FY23 |
y/y% |
|
Number of subscribers (million) |
0.6 |
0.6 |
- |
Revenue |
905.1 |
1,090.0 |
|
EBITDA |
371.8 |
362.4 |
( |
EBITDA margin (%) |
|
|
(7.9pp) |
Net income |
315.8 |
1,138.2 |
|
(2) Kuzey Kıbrıs Turkcell, in which we hold a
Kuzey Kıbrıs Turkcell revenues increased by
DISCONTINUED OPERATIONS – lifecell (
lifecell1 Financial Data |
|
Year |
|
FY22 |
FY23 |
y/y% |
|
Revenue (million UAH) |
9,411.7 |
11,712.1 |
|
EBITDA (million UAH) |
5,446.5 |
6,808.9 |
|
EBITDA margin (%) |
|
|
0.2pp |
Net income (million UAH) |
972.3 |
2,567.7 |
|
Capex (million UAH) |
3,007.6 |
4,207.1 |
|
Revenue (million TRY) |
7,865.6 |
7,649.8 |
( |
EBITDA (million TRY) |
4,553.3 |
4,434.5 |
( |
EBITDA margin (%) |
|
|
0.1pp |
Net income (million TRY) |
800.0 |
1,707.8 |
|
(1) Since July 10, 2015, we hold a
lifecell (
In TRY terms, lifecell’s revenue declined by
TECHFIN
Paycell Financial Data (million TRY) |
|
Year |
|
FY22 |
FY23 |
y/y% |
|
Revenue |
1,693.0 |
2,176.5 |
|
EBITDA |
761.7 |
925.5 |
|
EBITDA Margin (%) |
|
|
(2.5pp) |
Net Income |
167.0 |
51.6 |
( |
Paycell’s revenue rose by
The quarterly transaction volume (non-group) of the Pay Later service exceeded TRY2 billion, which was utilized by 3-month active Pay Later users of 8.0 million in Q423. Meanwhile, the Paycell Card transaction volume increased
Financell1 Financial Data (million TRY) |
|
Year |
|
FY22 |
FY23 |
y/y% |
|
Revenue |
1,848.2 |
2,360.9 |
|
EBITDA |
1,011.4 |
807.8 |
( |
EBITDA Margin (%) |
|
|
(20.5pp) |
Net loss |
(566.0) |
(816.5) |
|
(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. Within this scope, all past data have been revised for comparability purposes.
Financell’s revenues rose by
The main factor behind the decline in EBITDA margin compared to the previous year was higher funding cost.
Financell’s loan portfolio increased to TRY6.2 billion at the end of the year. Financell has provided loans to about 28 thousand corporate customers. Financell’s cost of risk was at
Turkcell Group Subscribers
Turkcell Group registered subscribers amounted to approximately 56.3 million as of December 31, 2023. 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 |
FY22 |
FY23 |
y/y% |
Turkcell Türkiye subscribers1 (million) |
41.7 |
42.5 |
|
BeST ( |
1.5 |
1.5 |
- |
Kuzey Kıbrıs Turkcell |
0.6 |
0.6 |
- |
Discontinued operations – lifecell ( |
10.2 |
11.7 |
|
Turkcell Group Subscribers (million) |
54.0 |
56.3 |
|
(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
OVERVIEW OF THE MACROECONOMIC ENVIRONMENT
The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below.
Quarter |
Year |
|||||||
Q422 |
Q323 |
Q423 |
y/y% |
q/q% |
FY22 |
FY23 |
y/y% |
|
GDP Growth (Türkiye) |
|
|
|
0.7pp |
(2.1pp) |
|
|
(1.0pp) |
Consumer Price Index (Türkiye)(yoy) |
|
|
|
0.5pp |
(3.3pp) |
|
|
0.5pp |
US$ / TRY rate |
|
|
|
|
|
|
|
|
Closing Rate |
18.6983 |
27.3767 |
29.4382 |
|
|
18.6983 |
29.4382 |
|
Average Rate |
18.6010 |
26.7052 |
28.4905 |
|
|
16.4900 |
23.6985 |
|
EUR / TRY rate |
|
|
|
|
|
|
|
|
Closing Rate |
19.9349 |
29.0305 |
32.5739 |
|
|
19.9349 |
32.5739 |
|
Average Rate |
18.9748 |
28.9644 |
30.7734 |
|
|
17.3108 |
25.6283 |
|
US$ / UAH rate |
|
|
|
|
|
|
|
|
Closing Rate |
36.5686 |
36.5686 |
37.9824 |
|
|
36.5686 |
37.9824 |
|
Average Rate |
36.5686 |
36.5686 |
36.6722 |
|
|
32.4854 |
36.5945 |
|
US$ / BYN rate |
|
|
|
|
|
|
|
|
Closing Rate |
2.7364 |
3.2870 |
3.1775 |
|
( |
2.7364 |
3.1775 |
|
Average Rate |
2.5055 |
3.1329 |
3.1809 |
|
|
2.6098 |
2.9988 |
|
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
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) |
|
Year |
|
FY22 |
FY23 |
y/y% |
|
Adjusted EBITDA |
36,607.7 |
43,877.1 |
|
Depreciation and amortization |
(32,596.0) |
(31,299.0) |
( |
EBIT |
4,011.7 |
12,578.1 |
|
Finance income |
3,957.7 |
12,663.7 |
|
Finance costs |
(11,949.2) |
(19,931.6) |
|
Monetary gain / (loss) |
7,767.1 |
3,816.9 |
( |
Other income / (expenses) |
(1,058.4) |
(4,765.6) |
|
Share of profit of equity accounted investees |
522.2 |
1,525.2 |
|
Consolidated profit before income tax & minority interest |
3,251.2 |
5,886.7 |
|
Income tax expense |
2,785.3 |
4,675.9 |
|
Profit /(loss) from discontinued operations |
842.4 |
1,969.7 |
|
Consolidated profit before minority interest |
6,878.9 |
12,532.2 |
|
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 of 2022 and 2023.
Reconciliation of ARPU |
Year |
|
FY22 |
FY23 |
|
Turkcell Türkiye Revenue (million TRY) |
77,951.7 |
91,952.8 |
Telecommunication services revenue |
73,395.9 |
86,033.4 |
Equipment revenue |
4,119.2 |
4,981.9 |
Call center |
169.9 |
289.2 |
Other |
266.7 |
648.4 |
Revenues which are not attributed to ARPU calculation1 |
(13,143.3) |
(14,294.2) |
Turkcell Türkiye revenues included in ARPU calculation2 |
64,371.8 |
76,721.1 |
Mobile blended ARPU (TRY) |
133.5 |
155.6 |
Average number of mobile subscribers during the year (million) |
36.7 |
37.8 |
Fixed residential ARPU (TRY) |
190.0 |
190.0 |
Average number of fixed residential subscribers during the year (million) |
2.4 |
2.7 |
(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.
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 |
|
Year |
|
FY22 |
FY23 |
y/y% |
|
Net FX loss before hedging |
(7,155.1) |
(14,016.4) |
|
Swap interest income/(expense) |
(280.4) |
580.1 |
n.m |
Fair value gain on derivative financial instruments |
(46.7) |
3,851.9 |
n.m |
Net FX gain / (loss) after hedging |
(7,482.1) |
(9,584.4) |
|
Table: Income tax expense details
Million TRY |
|
Year |
|
FY22 |
FY23 |
y/y% |
|
Current tax expense |
(864.5) |
(683.1) |
( |
Deferred tax income / (expense) |
3,649.8 |
5,359.0 |
|
Income Tax expense |
2,785.3 |
4,675.9 |
|
TURKCELL ILETISIM HIZMETLERI A.S.
|
||||
Year Ended |
Year Ended |
Year Ended |
||
Dec 31, |
Dec 31, |
Dec 31, |
||
2021 |
2022 |
2023 |
||
| Consolidated Statement of Operations Data |
|
|
|
|
| Turkcell Turkey | 90,008.6 |
77,951.7 |
91,952.8 |
|
| Turkcell International | 2,667.2 |
2,673.1 |
2,625.7 |
|
| Fintech | 3,550.8 |
3,545.4 |
4,568.7 |
|
| Other | 12,373.1 |
9,316.7 |
7,969.0 |
|
| Total revenue | 108,599.6 |
93,486.8 |
107,116.2 |
|
| Total cost of revenue | (86,138.1) |
(81,680.9) |
(84,418.0) |
|
| Total gross profit | 22,461.6 |
11,805.9 |
22,698.1 |
|
| Administrative expenses | (2,658.3) |
(2,579.4) |
(3,429.5) |
|
| Selling & marketing expenses | (5,201.0) |
(4,592.8) |
(5,682.3) |
|
| Other Income / (Expense) | (1,653.7) |
(1,058.4) |
(4,765.6) |
|
| Net impairment loses on financial and contract assets | (847.0) |
(622.0) |
(1,008.2) |
|
| Operating profit | 12,101.4 |
2,953.4 |
7,812.6 |
|
| Finance costs | (21,308.0) |
(11,949.2) |
(19,931.6) |
|
| Finance income | 11,528.0 |
3,957.7 |
12,663.7 |
|
| Monetary gain (loss) | 4,804.5 |
7,767.1 |
3,816.9 |
|
| Share of profit of an associate and a joint venture | 191.3 |
522.2 |
1,525.2 |
|
| Profit before income tax from continuing operations | 7,317.2 |
3,251.2 |
5,886.7 |
|
| Income tax income/ (expense) | (900.3) |
2,785.3 |
4,675.9 |
|
| Profit for the year from continuing operations | 6,416.9 |
6,036.5 |
10,562.6 |
|
| Profit /(loss) from discontinued operations | 718.7 |
842.4 |
1,969.7 |
|
| Profit for the year | 7,135.6 |
6,878.9 |
12,532.2 |
|
| Non-controlling interests | (0.2) |
1.6 |
21.8 |
|
| Owners of the Company | 7,135.4 |
6,880.4 |
12,554.0 |
|
|
|
|
||
|
|
|
||
| Basic and diluted earnings per share for profit attributable to owners of the Company (in full TRY) | 3.3 |
3.2 |
5.8 |
|
| Basic and diluted earnings per share for profit from continuing operations attributable to owners of the Company (in full TRY) | 2.9 |
2.8 |
4.8 |
|
|
|
|
||
| Other Financial Data |
|
|
|
|
|
|
|
||
| Gross margin |
|
|
|
|
| EBITDA(*) | 44,943.2 |
36,607.7 |
43,877.1 |
|
| Total Capex |
|
29,885.6 |
33,950.0 |
|
| Operational capex |
|
19,533.1 |
21,430.3 |
|
| Licence and related costs |
|
536.8 |
3,632.9 |
|
| Non-operational Capex |
|
9,815.8 |
8,886.9 |
|
|
|
|
||
|
|
|
||
| Consolidated Balance Sheet Data (at period end) |
|
|
|
|
| Cash and cash equivalents |
|
42,776.2 |
49,978.7 |
|
| Total assets |
|
234,989.2 |
247,083.3 |
|
| Long term debt |
|
61,185.3 |
57,946.6 |
|
| Total debt |
|
88,737.4 |
84,084.2 |
|
| Total liabilities |
|
125,611.2 |
124,848.5 |
|
| Total shareholders’ equity / Net Assets |
|
109,377.9 |
122,234.9 |
|
| FY 2021 Balance sheet figures are not presented in IFRS report. | ||||
| (*) 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 December 2023 on our website |
||||
TURKCELL ILETISIM HIZMETLERI A.S.
|
|||
Year Ended |
Year Ended |
||
Dec 31, |
Dec 31, |
||
2022 |
2023 |
||
| Consolidated Statement of Operations Data | |||
| Turkcell Turkey | 77,951.7 |
91,952.8 |
|
| Turkcell International | 2,673.1 |
2,625.7 |
|
| Fintech | 3,545.4 |
4,568.7 |
|
| Other | 9,316.7 |
7,969.0 |
|
| Total revenues | 93,486.8 |
107,116.2 |
|
| Direct cost of revenues | (81,680.9) |
(84,418.0) |
|
| Gross profit | 11,805.9 |
22,698.1 |
|
| Administrative expenses | (2,579.4) |
(3,429.5) |
|
| Selling & marketing expenses | (4,592.8) |
(5,682.3) |
|
| Other operating income | 14,429.6 |
15,944.1 |
|
| Other operating expense | (1,454.9) |
(5,932.7) |
|
| Operating profit | 17,608.4 |
23,597.8 |
|
| Impairment losses determined in accordance with TFRS 9 | (622.0) |
(1,008.2) |
|
| Income from investing activities | 3,278.5 |
7,187.3 |
|
| Expense from investing activities | (35.5) |
(23.2) |
|
| Share on profit of investments valued by equity method | 522.2 |
1,525.2 |
|
| Income before financing costs | 20,751.6 |
31,278.9 |
|
| Finance income | 430.6 |
4,596.9 |
|
| Finance expense | (25,698.1) |
(33,805.9) |
|
| Monetary gain (loss) | 7,767.1 |
3,816.9 |
|
| Income from continuing operations before tax and non-controlling interest | 3,251.2 |
5,886.7 |
|
| Tax income (expense) from continuing operations | 2,785.3 |
4,675.9 |
|
| Profit from continuing operations | 6,036.5 |
10,562.6 |
|
| Profit /(loss) from discontinued operations | 842.4 |
1,969.7 |
|
| Profit for the period | 6,878.9 |
12,532.2 |
|
| Non-controlling interest | 1.6 |
21.8 |
|
| Owners of the Parent | 6,880.4 |
12,554.0 |
|
|
|
||
| Earnings per share | 3.2 |
5.8 |
|
| Earnings per share from discontinued operations | 2.8 |
4.9 |
|
| Earnings per share from continuing operation | 0.4 |
0.9 |
|
| Other Financial Data |
|
|
|
|
|
||
| Gross margin |
|
|
|
| EBITDA(*) | 36,607.7 |
43,877.1 |
|
| Total Capex | 29,885.6 |
33,950.0 |
|
| Operational capex | 19,533.1 |
21,430.3 |
|
| Licence and related costs | 536.8 |
3,632.9 |
|
| Non-operational Capex | 9,815.8 |
8,886.9 |
|
|
|
||
|
|
||
| Consolidated Balance Sheet Data (at period end) |
|
|
|
| Cash and cash equivalents | 42,776.2 |
49,978.7 |
|
| Total assets | 234,989.2 |
247,083.3 |
|
| Long term debt | 61,185.3 |
57,946.6 |
|
| Total debt | 88,737.4 |
84,084.2 |
|
| Total liabilities | 125,611.2 |
124,848.5 |
|
| Total shareholders’ equity / Net Assets | 109,377.9 |
122,234.9 |
|
| (*) 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 December 2023 on our website |
|||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240320601623/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 Iletisim Hizmetleri A.S.
FAQ
What financial data is included in the press release?
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