Turkcell Iletisim Hizmetleri: Second Quarter 2023 Results
- None.
- None.
“Exceeding 2023 Targets, Upgrading Guidance”
- 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.
-
"Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in
- In this press release, a year-on-year comparison of our key indicators is provided and figures in parentheses following the operational and financial results for June 30, 2023 refer to the same item as at June 30, 2022. For further details, please refer to our consolidated financial statements and notes as at and for June 30, 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 second quarter and half year of 2022 and 2023 is based on Turkish Accounting Standards (TAS) / Turkish Financial Reporting Standards (TFRS) 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.
NOTICE
We are publishing financial statements as of June 30, 2023 prepared in accordance with Turkish Accounting Standards/Turkish Financial Reporting Standards (“TAS”/“TFRS”) only. These standards are issued by the Public Oversight Accounting and Auditing Standards Authority (“POA”) and are in full compliance with IAS/IFRS Standards. In an announcement published by the POA on January 20, 2022, it is stated that TAS 29 “Financial Reporting in Hyperinflationary Economies” does not apply to TFRS financial statements as of December 31, 2021. Since then and as of the preparation date of our latest consolidated financial statements, no new statement has been made by the POA about TAS 29 application. Consequently, no TAS 29 adjustment was made to our consolidated financial statements.
Financial statements prepared in accordance with IFRS should apply IAS 29 “Financial Reporting in Hyperinflationary Economies” as of June 30, 2023. In this context, financial statements prepared in accordance with IFRS and TFRS would have significant differences and would not be comparable as of June 30, 2023. We intend to publish IFRS financial statements, compliant with IAS 29 to the extent that it remains applicable, with our Annual Report on Form 20-F that will be filed to the
Although we have not prepared a detailed comparison of differences between IFRS (unadjusted according to IAS 29) and TFRS, we have noted in our past financial statements that the most significant differences have appeared in the lines Other Operating Income/Expense, Finance Income/Expense, and Investment Activity Income/Expense. In the past, revenue, net income and EBITDA have generally not differed. While no assurance can be given that this will be the case for Q2 2023, we are not at present aware of changes that would cause other significant differences, other than those resulting from the application of IAS 29.
FINANCIAL HIGHLIGHTS
TRY million |
Q222 |
Q223 |
y/y% |
H122 |
H123 |
y/y% |
Revenue |
12,477 |
21,651 |
|
23,172 |
38,927 |
|
EBITDA1 |
5,030 |
9,523 |
|
9,332 |
16,282 |
|
EBITDA Margin (%) |
|
|
3.7pp |
|
|
1.5pp |
EBIT2 |
2,550 |
6,535 |
|
4,767 |
10,608 |
|
EBIT Margin (%) |
|
|
9.8pp |
|
|
6.7pp |
Net Income |
1,858 |
3,161 |
|
2,661 |
5,978 |
|
SECOND QUARTER HIGHLIGHTS
-
Strong financial performance maintained:
-
Group revenues up
73.5% , primarily due to accelerated ARPU and positive contributions of digital business services and techfin business -
EBITDA up
89.3% year-on-year leading to an EBITDA margin of44.0% ; EBIT up156.3% year-on-year driving an EBIT margin of30.2% -
Net income up
70.1% year-on-year -
Free cash flow3 generation of TRY1.3 billion; net leverage4 level at 1.0; long FX position of
US $84 million
-
Group revenues up
-
Solid operational momentum:
- Turkcell Turkey subscriber base5 up by 234 thousand quarterly net additions
-
404 thousand quarterly mobile postpaid net additions; postpaid subscribers share at
70% - 33 thousand quarterly fixed subscriber net additions; 40 thousand quarterly fiber net additions
- 165 thousand new fiber homepasses in Q223; 300 thousand year-end target exceeded in the first half of the year
-
Robust mobile ARPU6 growth of
84.5% ; fixed residential fiber ARPU growth of48.6% -
Data usage of 4.5G users at 17.6 GB in Q223; smartphone penetration at
89%
-
We upgraded our guidance7 for 2023. Accordingly, we now target revenue growth of around
71% and EBITDA of ~TRY37.0 billion. We maintain our operational capex over sales ratio8 guidance at ~22%
(1) EBITDA is a non-GAAP financial measure. See page 15 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 Turkish Financial Reporting Standartds (TFRS) 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) 2023 guidance figures are based on TFRS, and do not include the effects of a likely adoption of inflationary accounting in accordance with IAS 29.
(8) Excluding license fee
For further details, please refer to our consolidated financial statements and notes as at June 30, 2023 via our website in the investor relations section (www.turkcell.com.tr).
COMMENTS BY CEO, MURAT ERKAN
We are pleased to report another set of outstanding results despite a challenging quarter occupied by a hefty schedule. The domestic agenda during the second quarter was predominantly focused on elections, however, we observed a dynamic period as the major uncertainties faded through the end of the quarter and as we gradually entered into the summer months. For this quarter, in addition to the base effect of accelerated inflation in the same period of last year, inflation decelerated with the contribution of a tighter monetary policy and economic measures. These factors together gave rise to a positive outlook for the economy overall. The revival of economic activity in the second quarter of the year positively impacted our operations, which were further enhanced by increased mobility during the summer months. The steady actions which we had taken since the end of 2021 within the scope of our inflationary pricing policy, has made a significant contribution to preserving and strengthening our company's financial performance. In April, considering prevailing market conditions and ongoing inflation, although it was decelerating, we continued our price adjustments that had been temporarily paused in the first quarter due to the earthquakes. In addition to a substantial rise in the minimum wage as of June, July’s inflation print signaled that despite the recent deceleration trend, another phase of accelerated inflation was upon us. Yet we continued to implement price adjustments in August remaining committed to our pricing strategy.
Our performance in the quarter improved due to the expansion of our subscriber base, the cumulative impact of sequential price increases, our focus on upsell to higher packages for our customers, and the contribution of our digital services and techfin business. Group revenues grew by
Strong results with sequential price adjustments
In the second quarter of the year we continued to focus on postpaid subscribers, gaining 165 thousand net mobile subscribers, of which 404 thousand were postpaid. During this period, overall price levels continued to rise as our price adjustments were followed by other operators. Yet the competitive effects of promotional sales being limited to short periods in response to aggressive attacks from the competition were also observed. Accordingly, following a subdued first quarter due to the earthquake, the Mobile Number Portability (MNP) market volume has increased to some extent. On the other hand, alternative data services particularly for tourists, and rising price levels suppressed tourists’ new line acquisitions, especially on the price-sensitive prepaid side. Mobile ARPU2 rose
In the fixed broadband segment where we meet our customers' demand for uninterrupted and fast connectivity; our contract-free packages also continued to attract attention in addition to our high-speed internet offerings of 100 Mbps and above. We followed the incumbent operator's price increases in July and made price adjustments for our fixed customers in August. The more than half of our fiber subscribers have opted for the 12-month contracts or contract-free tariffs as of the end of this quarter, thanks to our strategic focus on those offerings, where we can reflect price adjustments to our subscribers in a timelier manner during the inflationary period. We reached a fixed broadband customer base of 3.0 million with a net addition of 40 thousand fiber subscribers. In addition to price adjustments, thanks to our focus on higher speed packages, especially among new subscribers, Residential Fiber ARPU gave a robust performance marking a year-on-year rise of
We are enhancing the value that we provide to our customers through digital services and achieving strong results
In addition to our strong financial and operational growth, we are sustaining the success of our strategic focus areas. The stand-alone revenues of our digital services, including prominent brands such as BiP, TV+, lifebox, fizy, İşte Suit, GAME+, and digital advertising increased by
Our techfin-focused services, the Financell4 and Paycell businesses continue to support the group's growth. Financell offers customers a broad range of financial solutions by providing services in diverse areas such as device, car, and supplier financing to enhance product diversity. Loan portfolio of Financell reached TRY 4.7 billion during the quarter, supported by a strong rise in new loans issued to customers. This performance was also supported by the increase in average interest rates. Financell's revenues grew by
We raised our guidance on the back of accelerating growth thanks to our customer-focused strategies
We are upward-revising our guidance5 for the year 2023, supported by our strong half-year performance and confidence for the remainder of the year. Accordingly, we anticipate consolidated revenue growth of around
While expressing gratitude to all our employees who contributed to this success, we are also thankful to our Board of Directors for their trust and support. The continuous presence by our side of our customers and business partners empowers us, and we extend a special gratitude to them all.
(1) EBITDA is a non-GAAP financial measure. See page 15 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. Within this scope, all past data has been revised for comparability purposes.
(5) 2023 guidance figures are based on TFRS, and do not include the effects of a likely adoption of inflationary accounting in accordance with IAS 29.
(6) Excluding license fee
FINANCIAL AND OPERATIONAL REVIEW
Financial Review of Turkcell Group
Profit & Loss Statement (million TRY) |
|
Quarter |
|
|
Half Year |
|
Q222 |
Q223 |
y/y% |
H122 |
H123 |
y/y% |
|
Revenue |
12,477.1 |
21,651.0 |
|
23,172.1 |
38,926.8 |
|
Cost of revenue1 |
(6,427.4) |
(10,286.4) |
|
(11,920.9) |
(19,126.9) |
|
Cost of revenue1/Revenue |
( |
( |
4.0pp |
( |
( |
2.3pp |
Gross Margin1 |
|
|
4.0pp |
|
|
2.3pp |
Administrative expenses |
(348.1) |
(568.4) |
|
(651.8) |
(1,129.0) |
|
Administrative expenses/Revenue |
( |
( |
0.2pp |
( |
( |
(0.1pp) |
Selling and marketing expenses |
(575.9) |
(1,061.1) |
|
(1,116.6) |
(1,972.9) |
|
Selling and marketing expenses/Revenue |
( |
( |
(0.3pp) |
( |
( |
(0.3pp) |
Net impairment losses on financial and contract assets |
(95.5) |
(212.5) |
|
(150.6) |
(416.3) |
|
EBITDA2 |
5,030.1 |
9,522.5 |
|
9,332.1 |
16,281.7 |
|
EBITDA Margin |
|
|
3.7pp |
|
|
1.5pp |
Depreciation and amortization |
(2,480.1) |
(2,987.4) |
|
(4,564.7) |
(5,673.3) |
|
EBIT3 |
2,550.0 |
6,535.1 |
|
4,767.4 |
10,608.4 |
|
EBIT Margin |
|
|
9.8pp |
|
|
6.7pp |
Net finance income / (expense) |
(3,376.7) |
(11,241.7) |
|
(6,415.1) |
(13,345.9) |
|
Finance income |
776.7 |
2,570.4 |
|
848.9 |
2,575.1 |
|
Finance expense |
(4,153.4) |
(13,812.1) |
|
(7,264.1) |
(15,921.0) |
|
Other operating income / (expense) |
1,863.1 |
5,490.6 |
|
3,357.2 |
6,561.2 |
|
Investment activity income / (expense) |
797.0 |
2,871.5 |
|
1,096.2 |
3,381.6 |
|
Non-controlling interests |
0.0 |
0.9 |
n.m |
0.0 |
1.1 |
n.m |
Share of profit of equity accounted investees |
(51.1) |
0.8 |
n.m |
(74.5) |
7.2 |
n.m |
Income tax expense |
75.9 |
(495.9) |
( |
(70.1) |
(1,235.7) |
1, |
Net Income |
1,858.2 |
3,161.3 |
|
2,661.1 |
5,977.9 |
|
(1) Excluding depreciation and amortization expenses.
(2) EBITDA is a non-GAAP financial measure. See page 15 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 Turkey revenues, comprising
- Consumer segment revenues grew
- Corporate segment revenues rose
- Standalone digital services revenues across consumer and corporate segments grew
- Wholesale revenues grew
Turkcell International revenues, comprising
Techfin segment revenues, comprising
Other subsidiaries' revenues, at
Cost of revenue (excluding depreciation and amortization) decreased to
Administrative Expenses decreased to
Selling and Marketing Expenses increased to
Net impairment losses on financial and contract assets increased to
EBITDA1 rose
- Turkcell Turkey’s EBITDA increased
- Turkcell International EBITDA rose
- Techfin segment EBITDA increased
- The EBITDA of other subsidiaries rose to TRY169 million (TRY121 million).
Depreciation and amortization expenses increased
Net finance expense rose to TRY11,242 million (TRY3,377 million) in Q223. This was driven mainly by higher FX losses from borrowings and issued bonds. The FX losses were partially offset by the gain from derivatives.
See Appendix A for details of net foreign exchange gain and loss.
Net other operating income increased to TRY5,491 million (TRY1,863 million) in Q223 due mainly to higher FX gains arising from foreign currency cash.
See Appendix A for details of net foreign exchange gain and loss.
Net investment activity income was TRY2,872 million in Q223 due mainly to fair value differences of currency-protected time deposits and FX gains arising from financial investments.
Income tax expense: The current tax expense increased to TRY496 million (TRY76 million) due mainly to a higher deferred tax expense incurred in Q223.
Net income of the Group rose
(1) EBITDA is a non-GAAP financial measure. See page 15 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income.
Total cash & debt: Consolidated cash as of June 30, 2023 increased to TRY35,030 million from TRY27,317 million as of March 31, 2023. Our cash position was positively impacted by the currency movements. Excluding FX swap transactions,
Consolidated debt as of June 30, 2023 rose to TRY77,198 million from TRY58,486 million as of March 31, 2023, due mainly to the impact of currency movements and new borrowings. TRY3,936 million of our consolidated debt is comprised of lease obligations. Please note that
Net debt1 as of June 30, 2023, was at TRY28,046 million with a net debt to EBITDA ratio of 1.0 times. Excluding finance company customer loans, our telco only net debt was at TRY23,361 million with a leverage of 0.8 times.
Turkcell Group had a long FX position of
Capital expenditures: Capital expenditures, including non-operational items, amounted to TRY8,229.1 million in Q223. In Q223 and H123, operational capital expenditures (excluding license fees) at the Group level were at
Capital expenditures (million TRY) |
Quarter |
Half Year |
||
Q222 |
Q223 |
H122 |
H123 |
|
Operational Capex |
2,047.7 |
4,017.6 |
3,894.0 |
7,460.4 |
License and Related Costs |
- |
2,615.7 |
- |
2,630.1 |
Non-operational Capex (Including IFRS15 & IFRS16) |
1,063.1 |
1,595.8 |
2,135.8 |
3,577.2 |
Total Capex |
3,110.8 |
8,229.1 |
6,029.8 |
13,667.7 |
(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.
Operational Review of Turkcell Turkey
Summary of Operational Data |
Q222 |
Q123 |
Q223 |
y/y % |
q/q % |
Number of subscribers (million)1 |
40.6 |
41.7 |
42.0 |
|
|
Mobile Postpaid (million) |
24.5 |
25.9 |
26.3 |
|
|
Mobile M2M (million) |
3.6 |
4.1 |
4.2 |
|
|
Mobile Prepaid (million) |
12.1 |
11.6 |
11.3 |
( |
( |
Fiber (thousand) |
1,996.1 |
2,159.7 |
2,199.8 |
|
|
ADSL (thousand) |
740.6 |
759.0 |
754.4 |
|
( |
Superbox (thousand)2 |
640.3 |
676.5 |
703.4 |
|
|
Cable (thousand) |
48.6 |
42.4 |
40.2 |
( |
( |
IPTV (thousand) |
1,185.9 |
1,309.3 |
1,344.2 |
|
|
Churn (%)3 |
|
|
|
|
|
Mobile Churn (%) |
|
|
|
0.1pp |
0.2pp |
Fixed Churn (%) |
|
|
|
- |
(0.1pp) |
ARPU (Average Monthly Revenue per User) (TRY) |
|
|
|
|
|
Mobile ARPU, blended |
63.2 |
90.3 |
114.9 |
|
|
Mobile ARPU, blended (excluding M2M) |
69.5 |
100.4 |
128.2 |
|
|
Postpaid |
76.5 |
107.4 |
133.8 |
|
|
Postpaid (excluding M2M) |
88.6 |
126.2 |
157.7 |
|
|
Prepaid |
36.4 |
53.0 |
71.7 |
|
|
Fixed Residential ARPU, blended |
93.8 |
117.1 |
138.5 |
|
|
Residential Fiber ARPU |
94.5 |
118.1 |
140.4 |
|
|
Average mobile data usage per user (GB/user) |
14.1 |
16.2 |
16.5 |
|
|
(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 quarters.
Although there have been aggressive campaigns by competitors, our mobile subscriber base reached 37.6 million in the second quarter of 2023 supported by seasonality effect which is lower than normal trend. We registered 404 thousand quarterly net additions to the postpaid subscriber base, which reached
Average monthly mobile data usage per user increased by
Total smartphone penetration on our network reached
On the fixed front, our fiber subscriber base continued to grow in Q223, with 40 thousand net additions driven by demand for high-speed and quality broadband connection. Total fixed subscribers reached 3.0 million on 33 thousand quarterly net additions in Q223. Meanwhile, IPTV subscribers exceeded 1.3 million on 35 thousand quarterly net additions. Our residential fiber ARPU growth was
TURKCELL INTERNATIONAL
lifecell1 Financial Data |
|
Quarter |
|
|
Half Year |
|
Q222 |
Q223 |
y/y% |
H122 |
H123 |
y/y% |
|
Revenue (million UAH) |
2,127.3 |
2,903.2 |
|
4,434.1 |
5,590.6 |
|
EBITDA (million UAH) |
1,230.9 |
1,715.1 |
|
2,523.3 |
3,320.1 |
|
EBITDA margin (%) |
|
|
1.2pp |
|
|
2.5pp |
Net income / (loss) (million UAH) |
(27.4) |
611.5 |
n.m |
181.9 |
1,127.2 |
|
Capex (million UAH) |
659.0 |
1,445.6 |
|
1,370.6 |
2,083.6 |
|
Revenue (million TRY) |
1,134.9 |
1,646.5 |
|
2,247.5 |
3,032.7 |
|
EBITDA (million TRY) |
656.5 |
972.8 |
|
1,280.2 |
1,800.7 |
|
EBITDA margin (%) |
|
|
1.2pp |
|
|
2.4pp |
Net income / (loss) (million TRY) |
(18.2) |
346.7 |
n.m |
82.8 |
612.9 |
|
(1) Since July 10, 2015, we hold a
lifecell (
lifecell revenues in TRY terms rose
lifecell Operational Data |
Q222 |
Q123 |
Q223 |
y/y% |
q/q% |
Number of subscribers (million)2 |
10.2 |
10.8 |
11.1 |
|
|
Active (3 months)3 |
8.4 |
8.6 |
8.6 |
|
- |
MOU (minutes) (12 months) |
160.7 |
133.5 |
128.0 |
( |
( |
ARPU (Average Monthly Revenue per User), blended (UAH) |
69.2 |
85.1 |
88.1 |
|
|
Active (3 months) (UAH) |
82.8 |
104.6 |
112.7 |
|
|
(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 subscribers remained stable at 8.6 million in Q223. The 3-month active ARPU growth increased by
lifecell continued to demonstrate a strong focus on ensuring employee safety and delivering quality services to its customers, maintaining a highly functional network. On a daily average around
BeST1 |
|
Quarter |
|
|
Half Year |
|
Q222 |
Q223 |
y/y% |
H122 |
H123 |
y/y% |
|
Number of subscribers (million) |
1.5 |
1.5 |
- |
1.5 |
1.5 |
- |
Active (3 months) |
1.1 |
1.2 |
|
1.1 |
1.2 |
|
Revenue (million BYN) |
34.8 |
42.6 |
|
69.1 |
81.9 |
|
EBITDA (million BYN) |
9.2 |
19.8 |
|
19.9 |
38.0 |
|
EBITDA margin (%) |
|
|
19.8pp |
|
|
17.6pp |
Net loss (million BYN) |
(8.0) |
(8.9) |
|
(16.6) |
(18.1) |
|
Capex (million BYN) |
11.7 |
13.7 |
|
33.2 |
32.5 |
( |
Revenue (million TRY) |
204.9 |
301.5 |
|
380.7 |
570.9 |
|
EBITDA (million TRY) |
54.7 |
139.6 |
|
109.3 |
264.3 |
|
EBITDA margin (%) |
|
|
19.6pp |
|
|
17.6pp |
Net loss (million TRY) |
(46.4) |
(65.0) |
|
(90.1) |
(127.8) |
|
(1) BeST, in which we hold an
BeST revenues grew by
BeST achieved comprehensive coverage of its LTE services, across all six regions and reaching 4.1 thousand sites. This strategic expansion has contributed significantly to the increasing adoption of 4G services, resulting in
Kuzey Kıbrıs Turkcell2 (million TRY) |
|
Quarter |
|
|
Half Year |
|
Q222 |
Q223 |
y/y% |
H122 |
H123 |
y/y% |
|
Number of subscribers (million) |
0.6 |
0.6 |
- |
0.6 |
0.6 |
- |
Revenue |
103.1 |
185.6 |
|
199.9 |
348.5 |
|
EBITDA |
43.4 |
69.9 |
|
81.7 |
122.9 |
|
EBITDA margin (%) |
|
|
(4.4pp) |
|
|
(5.6pp) |
Net income |
21.1 |
(5.7) |
( |
42.8 |
15.9 |
( |
Capex |
30.1 |
111.2 |
|
65.0 |
203.4 |
|
(2) Kuzey Kıbrıs Turkcell, in which we hold a
Kuzey Kıbrıs Turkcell revenues grew
TECHFIN
Paycell Financial Data (million TRY) |
|
Quarter |
|
|
Half Year |
|
Q222 |
Q223 |
y/y% |
H122 |
H123 |
y/y% |
|
Revenue |
198.8 |
388.1 |
|
362.7 |
682.2 |
|
EBITDA |
89.1 |
187.4 |
|
162.0 |
310.6 |
|
EBITDA margin (%) |
|
|
3.5pp |
|
|
0.8pp |
Net income |
66.1 |
123.2 |
|
115.2 |
202.0 |
|
In Q223, Paycell experienced a significant
The Pay Later service transaction volume more than doubled year-on-year to TRY1.9 billion. This was driven by a
Financell1 Financial Data (million TRY) |
|
Quarter |
|
|
Half Year |
|
Q222 |
Q223 |
y/y% |
H122 |
H123 |
y/y% |
|
Revenue |
214.6 |
402.1 |
|
407.4 |
719.4 |
|
EBITDA |
129.7 |
188.5 |
|
240.6 |
322.0 |
|
EBITDA margin (%) |
|
|
(13.5pp) |
|
|
(14.3pp) |
Net income |
79.2 |
157.7 |
|
146.4 |
266.6 |
|
Financell experienced a significant revenue boost during Q223, with an
The loan portfolio of Financell demonstrated significant growth, increasing from TRY2.5 billion in Q222 to TRY4.7 billion in Q223. This expansion can be attributed to increased mobility and higher lending to the corporate segment. Financell's cost of risk decreased from
(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.
Turkcell Group Subscribers
Turkcell Group registered subscribers amounted to approximately 55.2 million as of June 30, 2023. 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, BeST, and Kuzey Kıbrıs Turkcell.
Turkcell Group Subscribers |
Q222 |
Q123 |
Q223 |
y/y% |
q/q% |
Turkcell Turkey subscribers (million)1 |
40.6 |
41.7 |
42.0 |
|
|
lifecell ( |
10.2 |
10.8 |
11.1 |
|
|
BeST ( |
1.5 |
1.5 |
1.5 |
- |
- |
Kuzey Kıbrıs Turkcell |
0.6 |
0.6 |
0.6 |
- |
- |
Turkcell Group Subscribers (million) |
52.8 |
54.6 |
55.2 |
|
|
(1) Subscribers to more than one service are counted separately for each service. Including mobile, fixed broadband, IPTV and wholesale (MVNO&FVNO) subscribers
OVERVIEW OF THE MACROECONOMIC ENVIRONMENT
The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below.
|
|
Quarter |
|
|
Half Year |
|||
|
Q222 |
Q123 |
Q223 |
y/y% |
q/q% |
H122 |
H123 |
y/y% |
GDP Growth ( |
|
|
n.a |
n.a |
n.a |
|
n.a |
n.a |
Consumer Price Index ( |
|
|
|
(40.4pp) |
(12.3pp) |
|
|
(40.4pp) |
US$ / TRY rate |
|
|
|
|
|
|
|
|
Closing Rate |
16.6690 |
19.1460 |
25.8231 |
|
|
16.6690 |
25.8231 |
|
Average Rate |
15.5996 |
18.8577 |
20.7406 |
|
|
14.7387 |
19.7991 |
|
EUR / TRY rate |
|
|
|
|
|
|
|
|
Closing Rate |
17.5221 |
20.8021 |
28.1540 |
|
|
17.5221 |
28.1540 |
|
Average Rate |
16.7104 |
20.2424 |
22.5331 |
|
|
16.1154 |
21.3877 |
|
US$ / UAH rate |
|
|
|
|
|
|
|
|
Closing Rate |
29.2549 |
36.5686 |
36.5686 |
|
- |
29.2549 |
36.5686 |
|
Average Rate |
29.2549 |
36.5686 |
36.5686 |
|
- |
29.0117 |
36.5686 |
|
US$ / BYN rate |
|
|
|
|
|
|
|
|
Closing Rate |
2.5235 |
2.8571 |
3.0315 |
|
|
2.5235 |
3.0315 |
|
Average Rate |
2.6634 |
2.7505 |
2.9308 |
|
|
2.6876 |
2.8407 |
|
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 TFRS. The following table provides a reconciliation of Adjusted EBITDA, as calculated using financial data prepared in accordance with TFRS to net profit, which we believe is the most directly comparable financial measure calculated and presented in accordance with TFRS.
Turkcell Group (million TRY) |
|
Quarter |
|
|
Half Year |
|
Q222 |
Q223 |
y/y% |
H122 |
H123 |
y/y% |
|
Adjusted EBITDA |
5,030.1 |
9,522.5 |
|
9,332.1 |
16,281.7 |
|
Depreciation and amortization |
(2,480.1) |
(2,987.4) |
|
(4,564.7) |
(5,673.3) |
|
EBIT |
2,550.0 |
6,535.1 |
|
4,767.4 |
10,608.4 |
|
Finance income |
776.7 |
2,570.4 |
|
848.9 |
2,575.1 |
|
Finance expense |
(4,153.4) |
(13,812.1) |
|
(7,264.1) |
(15,921.0) |
|
Other operating income / (expense) |
1,863.1 |
5,490.6 |
|
3,357.2 |
6,561.2 |
|
Investment activity income / (expense) |
797.0 |
2,871.5 |
|
1,096.2 |
3,381.6 |
|
Share of profit of equity accounted investees |
(51.1) |
0.8 |
n.m |
(74.5) |
7.2 |
n.m |
Consolidated profit before income tax & minority interest |
1,782.3 |
3,656.3 |
|
2,731.2 |
7,212.5 |
|
Income tax expense |
75.9 |
(495.9) |
( |
(70.1) |
(1,235.7) |
1, |
Consolidated profit before minority interest |
1,858.2 |
3,160.4 |
|
2,661.1 |
5,976.8 |
|
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 2023. 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 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.
ABOUT TURKCELL: Turkcell is a digital operator headquartered in
Appendix A – Tables
Table: Net foreign exchange gain and loss details
Million TRY |
|
Quarter |
|
|
Half Year |
|
Q222 |
Q223 |
y/y% |
H122 |
H123 |
y/y% |
|
Net FX loss before hedging |
(1,651.2) |
(6,698.7) |
|
(2,728.8) |
(7,131.1) |
|
Swap interest income/(expense) |
(49.4) |
117.3 |
n.m |
(120.2) |
169.4 |
n.m |
Fair value gain on derivative financial instruments |
765.8 |
2,501.2 |
|
824.6 |
2,393.0 |
|
Net FX gain / (loss) after hedging |
(934.9) |
(4,080.2) |
|
(2,024.4) |
(4,568.7) |
|
Table: Income tax expense details
Million TRY |
|
Quarter |
|
|
Half Year |
|
Q222 |
Q223 |
y/y% |
H122 |
H123 |
y/y% |
|
Current tax expense |
(81.5) |
(184.6) |
|
(238.8) |
(490.1) |
|
Deferred tax income / (expense) |
157.4 |
(311.3) |
( |
168.6 |
(745.6) |
( |
Income Tax expense |
75.9 |
(495.9) |
( |
(70.1) |
(1,235.7) |
(1, |
TURKCELL ILETISIM HIZMETLERI A.S. TURKISH ACCOUNTING STANDARDS SELECTED FINANCIALS (TRY Million) |
||||||
Quarter Ended |
Quarter Ended |
Quarter Ended |
Half Ended |
Half Ended |
||
Jun 30, |
Mar 31, |
Jun 30, |
Jun 30, |
Jun 30, |
||
2022 |
2023 |
2023 |
2022 |
2023 |
||
|
|
|
|
|
||
Consolidated Statement of Operations Data |
|
|
|
|
|
|
Turkcell Turkey | 9,376.9 |
13,490.7 |
17,090.8 |
17,326.6 |
30,581.5 |
|
Turkcell International | 1,479.7 |
1,868.8 |
2,187.4 |
2,906.4 |
4,056.1 |
|
Fintech | 414.0 |
606.1 |
797.5 |
766.8 |
1,403.5 |
|
Other | 1,206.4 |
1,310.3 |
1,575.3 |
2,172.3 |
2,885.7 |
|
Total revenues | 12,477.1 |
17,275.9 |
21,651.0 |
23,172.1 |
38,926.8 |
|
Direct cost of revenues | (8,907.5) |
(11,526.4) |
(13,273.9) |
(16,485.6) |
(24,800.2) |
|
Gross profit | 3,569.5 |
5,749.5 |
8,377.1 |
6,686.5 |
14,126.6 |
|
Administrative expenses | (348.1) |
(560.5) |
(568.4) |
(651.8) |
(1,129.0) |
|
Selling & marketing expenses | (575.9) |
(911.8) |
(1,061.1) |
(1,116.6) |
(1,972.9) |
|
Other Operating Income / (Expense) | 1,863.1 |
1,070.6 |
5,490.6 |
3,357.2 |
6,561.2 |
|
Operating profit | 4,508.6 |
5,347.8 |
12,238.1 |
8,275.3 |
17,585.9 |
|
Impairment losses determined in accordance with TFRS 9 | (95.5) |
(203.9) |
(212.5) |
(150.6) |
(416.3) |
|
Income from investing activities | 797.0 |
533.5 |
2,898.5 |
1,096.2 |
3,432.0 |
|
Expense from investing activities | - |
(23.4) |
(26.9) |
- |
(50.4) |
|
Share on profit of investments valued by equity method | (51.1) |
6.4 |
0.8 |
(74.5) |
7.2 |
|
Income before financing costs | 5,159.0 |
5,660.4 |
14,898.0 |
9,146.4 |
20,558.4 |
|
Finance income | 776.7 |
4.6 |
2,570.4 |
848.9 |
2,575.1 |
|
Finance expense | (4,153.4) |
(2,108.8) |
(13,812.1) |
(7,264.1) |
(15,921.0) |
|
Income from continuing operations before tax and non-controlling interest | 1,782.3 |
3,556.2 |
3,656.3 |
2,731.2 |
7,212.5 |
|
Tax income (expense) from continuing operations | 75.9 |
(739.8) |
(495.9) |
(70.1) |
(1,235.7) |
|
Income from continuing operations before non-controlling interest | 1,858.2 |
2,816.4 |
3,160.4 |
2,661.1 |
5,976.8 |
|
Income before non-controlling interest | 1,858.2 |
2,816.4 |
3,160.4 |
2,661.1 |
5,976.8 |
|
Non-controlling interest | 0.0 |
0.2 |
0.9 |
- |
1.1 |
|
Net income | 1,858.2 |
2,816.6 |
3,161.3 |
2,661.1 |
5,977.9 |
|
Net income per share from continuing operations | 0.9 |
1.3 |
1.4 |
1.2 |
2.7 |
|
|
|
|
|
|
||
Other Financial Data |
|
|
|
|
|
|
Gross margin |
|
|
|
|
|
|
EBITDA(*) | 5,030.1 |
6,759.2 |
9,522.5 |
9,332.1 |
16,281.7 |
|
Total Capex | 3,110.8 |
5,438.5 |
8,229.1 |
6,029.8 |
13,667.6 |
|
Operational capex | 2,047.7 |
3,442.7 |
4,017.6 |
3,894.0 |
7,460.4 |
|
Licence and related costs | - |
14.4 |
2,615.7 |
- |
2,630.1 |
|
Non-operational Capex | 1,063.1 |
1,981.4 |
1,595.8 |
2,135.8 |
3,577.2 |
|
|
|
|
|
|
||
|
|
|
|
|
||
Consolidated Balance Sheet Data (at period end) |
|
|
|
|
|
|
Cash and cash equivalents | 21,972.3 |
27,316.6 |
35,030.3 |
21,972.3 |
35,030.3 |
|
Total assets | 84,545.2 |
109,842.8 |
136,175.4 |
84,545.2 |
136,175.4 |
|
Long term debt | 35,010.4 |
39,049.2 |
51,930.2 |
35,010.4 |
51,930.2 |
|
Total debt | 48,234.6 |
58,486.4 |
77,197.8 |
48,234.6 |
77,197.8 |
|
Total liabilities | 60,711.1 |
75,990.3 |
98,639.3 |
60,711.1 |
98,639.3 |
|
Total shareholders’ equity / Net Assets | 23,834.0 |
33,852.5 |
37,536.2 |
23,834.0 |
37,536.2 |
|
|
|
|
|
|
||
(*) Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 15 |
||||||
For further details, please refer to our consolidated financial statements and notes as at 30 June 2023 on our website. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230817001374/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
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