Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL):
- Please note that all financial data is
consolidated and comprises that of Turkcell Iletisim Hizmetleri
A.S. (the “Company”, or “Turkcell”) and its subsidiaries and
associates (together referred to as the “Group”), unless otherwise
stated.
- As previously announced, starting from
Q115, we now have three reporting segments:
- "Turkcell Turkey" which comprises all
of our telecom related businesses in Turkey (as used in our
previous releases, this term covered only mobile businesses). All
non-financial data presented in this press release is
unconsolidated and comprises Turkcell Turkey only figures, unless
otherwise stated. The terms "we", "us", and "our" in this press
release refer only to Turkcell Turkey, except in discussions of
financial data, where such terms refer to the Group, and except
where context otherwise requires.
- “Turkcell International” which
comprises all of our telecom related businesses outside of
Turkey.
- “Other subsidiaries” which is mainly
comprised of our information and entertainment services, call
center business revenues, financial services revenues and
inter-business eliminations. Call centers were previously included
in Turkcell Turkey but are, with effect from the fourth quarter of
2015, now included in “Other subsidiaries”. We have made this
change because we believe that our third party call center revenues
are not telecom related. All figures presented in this document for
prior periods have been restated to reflect this change.
- In this press release, a year-on-year
comparison of our key indicators is provided and figures in
parentheses following the operational and financial results for
September 30, 2016 refer to the same item as at September 30, 2015.
For further details, please refer to our consolidated financial
statements and notes as at and for September 30, 2016, which can be
accessed via our website in the investor relations section
(www.turkcell.com.tr).
- With effect from Q4 2015, our financial
statements are presented in TRY only, the currency in which we
recognize the majority of our revenues and expenses. We will no
longer present financial statements in US$. This change allows us
align our Turkish and US reporting.
- In the tables used in this press
release totals may not foot due to rounding differences. The same
applies for the calculations in the text.
- Year-on-year and quarter-on-quarter
percentage comparisons appearing in this press release reflect
mathematical calculation.
NINE MONTHS SUMMARY
- All-time-high nine months revenue and
EBITDA1, both at the Turkcell Turkey and Turkcell Group level in
line with our targets
- Turkcell Turkey revenues and EBITDA up
8.6% and 4.7%, respectively with an EBITDA margin of 31.9%
- Group revenues and EBITDA1 up 8.6% and
5.4%, respectively with an EBITDA margin of 31.7%
- Group net income as per IFRS of
TRY1,141 million (TRY1,484 million). Group proforma net income2 up
4.8% to TRY1,822 million (TRY1,738 million)
- Full year guidance3 maintained;
Turkcell Turkey and Group revenue growth targeted at 8% - 10%,
Group EBITDA margin targeted at 31% - 33% and Group capex over
sales at ~25%3
THIRD QUARTER SUMMARY
- Turkcell Turkey’s revenues and EBITDA
up 7.9% and 3.2%, respectively with an EBITDA margin of 33.4%; data
and services&solutions revenues, comprising 60% of Turkcell
Turkey revenues, up 76.5%
- Excluding the impact of emergency
packages, Turkcell Turkey revenue growth would have been 9.7%.
EBITDA would have grown by 8.9%, while the EBITDA margin would have
been 34.7%.
- Group revenues and EBITDA1 up 8.8% and
4.9%, respectively with an EBITDA margin of 33.3%
- Excluding the impact of emergency
packages, our Group revenues would have risen by 10.4%. EBITDA
would have grown by 10.1%, while the EBITDA margin would have been
34.4%.
- Group net income as per IFRS at TRY163
million (TRY630 million). Group proforma net income2 up 4.2% to
TRY705 million (TRY677 million)
- Turkcell International revenues at
TRY222 million (TRY235 million) with an EBITDA margin of 27.2%
- Turkcell is the only company in Turkey
to sustain 3 investment grade ratings from major rating agencies.
Despite recent actions of these rating agencies on sovereign
ratings, all of them have affirmed Turkcell’s investment grade
ratings on the back of our strong financial profile.
FINANCIAL HIGHLIGHTS
TRY million Q315 Q316
y/y % 9M15 9M16 y/y
% Revenue 3,363.8 3,658.5 8.8%
9,435.0 10,242.0 8.6% Turkcell Turkey 3,034.7 3,275.7
7.9% 8,483.1 9,211.4 8.6% EBITDA1 1,160.6 1,217.6 4.9% 3,082.3
3,248.4 5.4% Turkcell Turkey 1,060.6 1,095.0 3.2% 2,803.7 2,934.3
4.7% EBITDA Margin 34.5% 33.3% (1.2pp) 32.7% 31.7% (1.0pp) Net
Income 630.4 162.6 (74.2%) 1,483.5 1,141.4 (23.1%) Proforma Net
Income2 676.8 704.9 4.2% 1,738.4
1,822.1 4.8%
(1) EBITDA is a non-GAAP financial measure. See page 14 for the
reconciliation and the explanation of how we calculate Adjusted
EBITDA to net income.(2) We use "proforma net income" as a means of
presenting our net income net of certain non-operating items and
items that we believe are non-recurring. We define "proforma net
income" in this document as net Income excluding FX gain / (loss)
(including tax and minority impact), interest Income on time
deposits of Turkcell Iletisim Hizmetleri, interest expense on loans
& borrowings, share of profit of equity accounted investees
(Fintur), 4.5G license amortization and one-off items. Please note
that this is a non-GAAP measure and that we may in future
presentations change the scope of items that we deduct from net
income to arrive at "proforma net income."(3) Please note that this
paragraph contains forward looking statements based on our current
estimates and expectations regarding market conditions for each of
our different businesses. No assurance can be given that actual
results will be consistent with such estimates and expectations.
For a discussion of factors that may affect our results, see our
Annual Report on Form 20-F for 2015 filed with U.S. Securities and
Exchange Commission, and in particular, the risk factor section
therein.For further details, please refer to our consolidated
financial statements and notes as at and for September 30, 2016
which can be accessed via our web site in the investor relations
section (www.turkcell.com.tr).
COMMENTS BY KAAN TERZIOGLU, CEO
With our value driven and service focused approach, we have
begun generating returns from our 4.5G investments
We registered all-time-high revenue and EBITDA, both at the
Turkcell Turkey and Turkcell Group level in the first nine months.
In the third quarter, Turkcell Group achieved the highest growth
level of the past three years at 8.8% with a performance that
improved every quarter. The EBITDA margin was at 33.3% in the same
period. In the aftermath of a treasonous July 15th coup attempt, we
fulfilled our duty of delivering accurate and timely information by
providing free emergency communication packages to our customers.
Revenue growth and EBITDA margin would have been 10.4% and 34.4%
respectively, excluding the effect of these packages.
In the first nine months of the year, Turkcell Turkey,
generating 90% of Group revenues, continued its growth at 8.6%,
recording an EBITDA margin of 31.9%. Group revenues rose 8.6% to
TRY10.2 billion, while EBITDA increased 5.4% to TRY3.2 billion on a
31.7% EBITDA margin. Proforma Group net income1 was at TRY1.8
billion, while net income as per IFRS was at TRY1.1 billion. With
these results, which are in line with our plans, we reiterate our
2016 full year guidance of 8%-10% revenue growth, a 31%-33% EBITDA
margin and an operational capex to sales ratio of 25%, the latter
of which we had revised in Q216.2
In the first nine months of 2016, we continued our 4.5G
investments at full speed. With our 4.5G investments, we registered
an operational capex to sales ratio of 21.5% for the first nine
months of the year. As of today, our 4.5G customers have reached 19
million3, while 22% of total data traffic has derived from our 4.5G
network. With the contribution of 4.5G users, data usage per
customer increased 61% to 2.6GB compared to last year. Our
smartphone penetration in Turkey, gaining momentum, reached 62% at
the end of the third quarter. Our data and services&solutions
revenues grew by 76.5% year-on-year through our investments and
increasing customer demand.
Turkcell Turkey: Our subscriber numbers are rising due to
converged services that differentiate us in user experience
During the third quarter of 2016, the total number of
subscribers in the five countries where we have direct operations
were at 49.7 million with 34.84 million subscribers being from
Turkey. Meanwhile, Turkcell Turkey continued to gain mobile, fiber
and TV subscribers in the quarter, with mobile subscribers up 179
thousand to 32.8 million. Postpaid customers rose by 897 thousand
year-on-year to 52% of our mobile subscriber base. Fiber
subscribers in the fixed segment rose by 140 thousand year-on-year
to 992 thousand, with total fixed subscribers exceeding 1.7
million.
In line with our convergence strategy, the mobile triple play
ratio, which includes customers of voice, data and services
combined reached 28%5, while multiplay with TV6 service users
registered at 34%.
(1) We use "proforma net income" as a means of presenting our
net income net of certain non-operating items and items that we
believe are non-recurring. We define "proforma net income" in this
document as net income excluding FX gain / (loss) (including tax
and minority impact), interest Income on time deposits of Turkcell
Iletisim Hizmetleri, interest expense on loans & borrowings,
share of profit of equity accounted investees (Fintur), 4.5G
license amortization and one-off items. Please note that this is a
non-GAAP measure and that we may in future presentations change the
scope of items that we deduct from net income to arrive at
"proforma net income."(2) Please note that this paragraph contains
forward looking statements based on our current estimates and
expectations regarding market conditions for each of our different
businesses. No assurance can be given that actual results will be
consistent with such estimates and expectations. For a discussion
of factors that may affect our results, see our Annual Report on
Form 20-F for 2015 filed with U.S. Securities and Exchange
Commission, and in particular, the risk factor section therein.(3)
Customers registered to 4.5G services through SMS confirmation(4)
Total of mobile, fixed and IPTV subscribers(5) Breakdown among
mobile voice users which excludes subscribers who do not use their
line in the last 3 months(6) Multiplay customers with TV: Internet
+ TV users & internet + TV + voice users
With the rise in postpaid base and data and service revenues,
ARPU from mobile subscribers rose 6.9% year-on-year to TRY27.9.
Excluding the free emergency communication package impact, ARPU
would have increased by 8.8% to TRY28.4. Meanwhile, fixed
residential ARPU rose 5.1% to TRY51.6.
English Premier League now on Turkcell TV+
In the third quarter, Turkcell TV+ became the official
broadcaster of the UK’s Premier League, which is considered one of
the world’s most prestigious football leagues. On the mobile
platform, the Premier League is now available exclusively through
Turkcell TV+. Along with the English Premier League, Turkcell TV+
providing privileged coverage to sports fans, also holds the
broadcasting rights for the Bundesliga, NBA and Formula 1. We will
continue to provide diversified services to our customers on our
4.5G platform, which has the widest spectrum. In this context, we
remain excited about the upcoming Turkish Super League live
broadcast tender, and the possibility of broadcasting it through
our mobile TV platform, with a view to providing football content
to even more people.
Our Digital Services attract global attention
Innovation in our digital services, our key focal point, has
continued in this quarter. Developed entirely with national
resources, BiP continues to attract interest from all over the
world, including Europe and the USA. Having been downloaded more
than 10 million times in 192 countries, BiP has been a major
success within a short period of time. As the number of customers
who downloaded the application from abroad exceeded 1 million, BiP
has progressed towards becoming a global brand. BiP, a new
dimension in the concept of communication, has marked a world-first
with its fax service through BiP message.
Meanwhile, fizy, one of Turkey’s largest music platforms,
integrated with video clips and live concerts, has reached one
million users by broadcasting Open Air Concerts, becoming Turkey’s
largest digital concert broadcaster. Elsewhere, the “Hello Hope”
application was developed by Turkcell to meet the communication
needs of Syrian refugees by making their lives easier through
language assistance. The app, operational on all-access, has
exceeded 100 thousand active users in just one month. Meanwhile,
Turkey’s first and only integrated game platform, Gamecell, made a
fast entry into the games market, which has an estimated size of
TRY2 billion. The platform, which currently offers around 2,000
games, will also enable its users to build their teams and
participate in tournaments, besides the opportunity of following
the latest developments in the games industry.
We confidently work towards achieving our 2016 targets and
keenly look forward to 2017
We have progressed in line with our plans over the past nine
months, despite macroeconomic and geopolitical challenges. We
expect to meet our year-end operational and financial targets, and
are working towards a strong start to 2017. In this regard, to
create more value for our stakeholders through maximizing the value
of the strategic assets on our balance sheet, we are evaluating all
options accordingly. We are currently evaluating various strategic
alternatives for Fintur, in which we own a 41.45% stake, including
its sale, following the inconclusive negotiations with Telia
Company regarding the acquisition of the remaining stake in this
asset.
Global Tower is another strategic asset on our balance sheet.
With a view to a more focused management of Global Tower, and to
transforming it into a regional tower company, the first planned
step was its initial public offering, now postponed to 2017.
Investor interest in Global Tower during its IPO process has
strengthened our confidence in our tower business model.
We would like to take this opportunity to once again thank our
Board of Directors and the Turkcell team for their outstanding
performance, dedication and compassion, which fully embodies the
Turkcell spirit.
FINANCIAL AND OPERATIONAL REVIEW OF THE THIRD QUARTER
2016
The following discussion focuses principally on the developments
and trends in our business in the third quarter of 2016 in TRY
terms. Selected financial information presented in this press
release for the third quarter and nine months 2015 and 2016 is
based on IFRS figures.
Selected financial information for the third quarter of 2015,
for the second and third quarters of 2016, nine months 2015 and
2016 prepared in accordance with IFRS and Turkish Accounting
standards, is also included at the end of this press release.
Financial Review of Turkcell Group
Profit & Loss Statement
(million TRY)
Quarter Nine Months Q315
Q316 y/y % 9M15
9M16 y/y % Total Revenue 3,363.8
3,658.5 8.8%
9,435.0 10,242.0 8.6%
Direct cost of revenues1 (1,987.8) (2,372.6) 19.4% (5,714.7)
(6,628.3) 16.0%
Direct cost of
revenues1/revenues (59.1%) (64.9%)
(5.8pp) (60.6%) (64.7%) (4.1pp)
Depreciation and amortization (426.9) (577.0) 35.2% (1,230.7)
(1,598.9) 29.9%
Gross Margin 40.9% 35.1%
(5.8pp) 39.4% 35.3% (4.1pp)
Administrative expenses (168.2) (177.3) 5.4% (459.4) (531.8) 15.8%
Administrative expenses/revenues (5.0%) (4.8%)
0.2pp (4.9%) (5.2%) (0.3pp) Selling and
marketing expenses (474.1) (468.0) (1.3%) (1,409.3) (1,432.4) 1.6%
Selling and marketing expenses/revenues (14.1%)
(12.8%) 1.3pp (14.9%) (14.0%)
0.9pp EBITDA2 1,160.6 1,217.6
4.9% 3,082.3 3,248.4 5.4% EBITDA
Margin 34.5% 33.3% (1.2pp) 32.7%
31.7% (1.0pp) EBIT3 733.7
640.6 (12.7%) 1,851.6 1,649.5
(10.9%) Net finance income / (expense) 30.4 (162.5) (634.5%)
(55.9) 25.5 n.m Finance expense (144.7) (349.7) 141.7% (658.5)
(545.4) (17.2%) Finance income 175.1 187.2 6.9% 602.6 570.9 (5.3%)
Share of profit of associates 80.1 (5.1) (106.4%) 268.9 2.2 (99.2%)
Other income / (expense) (18.4) (192.6) 946.7% (194.9) (189.9)
(2.6%) Non-controlling interests (12.2) (11.5) (5.7%) 171.7 (34.0)
(119.8%) Income tax expense (183.2) (106.3) (42.0%) (557.9) (311.9)
(44.1%)
Net Income 630.4 162.6 (74.2%)
1,483.5 1,141.4 (23.1%) Proforma Net
Income4 676.8 704.9
4.2% 1,738.4 1,822.1
4.8%
(1) Including depreciation and amortization expenses.(2) EBITDA
is a non-GAAP financial measure. See page 14 for the reconciliation
and an explanation of how we calculate Adjusted EBITDA to net
income.(3) EBIT is a non-GAAP financial measure and is equal to
EBITDA minus depreciation and amortization expenses.(4) We use
"proforma net income" as a means of presenting our net income net
of certain non-operating items and items that we believe are
non-recurring. We define "proforma net income" in this document as
net income excluding FX gain / (loss) (including tax and minority
impact), interest Income on time deposits of Turkcell Iletisim
Hizmetleri, interest expense on loans & borrowings, share of
profit of equity accounted investees (Fintur), 4.5G license
amortization and one-off items. Please note that this is a non-GAAP
measure and that we may in future presentations change the scope of
items that we deduct from net income to arrive at "proforma net
income."
Revenues of the Group rose by 8.8% year-on-year in Q316,
in line with our full-year guidance. In July, we provided free of
charge emergency packages to our customers for their communication
needs following the coup attempt in Turkey. Excluding the impact of
emergency packages, our Group revenues would have risen by
10.4%.
Turkcell Turkey revenues, constituting 90% of Group revenues,
grew by 7.9% to TRY3,276 million (TRY3,035 million). Excluding the
impact of the aforementioned emergency packages, Turkcell Turkey
revenue growth would have been 9.7%. The rise in Turkcell Turkey
revenues was driven by a 9.2% increase in consumer segment revenues
to TRY2,626 million (TRY2,404 million), and 3.4% rise in corporate
segment revenues to TRY536 million (TRY519 million).
Consumer and corporate segment revenues in total grew by 8.2% to
TRY3,162 million (TRY2,992 million). Our data and
services&solutions revenues, comprising 60% of Turkcell Turkey
revenues, rose by 76.5% to TRY1,972 million (TRY1,117 million).
Following the launch of 4.5G, more than 90% of our investments,
cost base and our customers’ consumption are now data related.
Hence, with the annulment of the minimum price rule regulation in
Turkey, we are now able to reflect this reality in our tariffs and
campaigns.
Demand for our 4.5G services continued to increase in Q316.
Accordingly, 22% of our data traffic, which rose 23% for the
quarter, came through our 4.5G network. Our 4.5G subscribers
consumed 2.1 times more data per month as compared to a non 4.5G
user. Coupled with higher smartphone penetration of 62% and
increased data users overall, data revenues rose by 80.8% to
TRY1,699 million (TRY940 million). Mobile broadband revenues grew
by 96.6% to TRY 1,430 million (TRY727 million), while fixed
broadband revenues rose by 26.7% to TRY269 million (TRY213
million). Meanwhile, services and solutions revenues grew by 53.8%
to TRY273 million (TRY177 million) driven mainly by increased usage
of Turkcell TV+, fizy, personal cloud service and other mobile
services.
Wholesale revenues grew by 2.2% to TRY133 million (TRY130
million) driven by the rise in carrier traffic.
Turkcell International revenues, comprising 6% of Group
revenues, were at TRY222 million (TRY235 million), due to currency
devaluation in Ukraine and Belarus as lifecell and BeST grew by
4.7% and 11.0%, respectively in local currency terms.
Other subsidiaries' revenues, at 4% of Group revenues, which
includes information and entertainment services, call center
revenues and revenues from financial services rose by 69.9% to
TRY160 million (TRY94 million). This was mainly driven by the
contribution of our consumer finance company, which commenced
operations in March 2016.
Direct cost of revenues rose to 64.9% (59.1%) as a
percentage of revenues in Q316. This was mainly due to the rise in
depreciation and amortization expenses (3.1pp) reflecting the 4.5G
license and investments, and various other cost items (2.7pp),
mainly arising from our network and retail sales related device
costs.
Administrative expenses declined to 4.8% (5.0%) as a
percentage of revenues in Q316.
Selling and marketing expenses fell to 12.8% (14.1%) as a
percentage of revenues in Q316, driven by the decline in selling
expenses (0.7pp) with our value focused customer acquisition
strategy, in personnel expenses (0.5pp) and in various other cost
items (0.5pp). This more than offset the rise in marketing expenses
(0.4pp) related mainly to 4.5G services.
EBITDA1 rose by 4.9% year-on-year in Q316 with an
EBITDA margin of 33.3% (34.5%). Direct cost of revenues (excluding
depreciation and amortization) increased by 2.7pp, while
administrative expenses and selling and marketing expenses declined
by 0.2pp and 1.3pp, respectively. Excluding the impact of emergency
packages, EBITDA would have grown by 10.1%, while the EBITDA margin
would have been 34.4%.
- Turkcell Turkey’s EBITDA grew by 3.2%
to TRY1,095 million (TRY1,061 million), while the EBITDA margin was
at 33.4% (34.9%). Excluding the impact of emergency packages,
EBITDA would have grown by 8.9%, while the EBITDA margin would have
been 34.7%.
- Turkcell International EBITDA was at
TRY60 million (TRY70 million) impacted by year-on-year devaluation
in Ukraine and Belarus, while the EBITDA margin was at 27.2%
(29.6%).
- The EBITDA of other subsidiaries rose
by 103.8% to TRY62 million (TRY31 million) with the contribution of
the financial services business.
(1) EBITDA is a non-GAAP financial measure. See page 14 for the
reconciliation and an explanation of how we calculate Adjusted
EBITDA to net income.
Net finance expense of TRY163 million (net finance income
of TRY30 million) was recorded in Q316. Depreciation of TRY against
US$ and EUR led to a higher translation loss of TRY238 million in
Q316 compared to TRY97 million in Q315. Moreover, the decline in
interest income from time deposits and contracted receivables, as
well as the rise in interest expenses in relation to loans and 4.5G
payables led to a net finance expense in Q316. Please see Appendix
A for translation gain and loss details.
Income tax expense declined 42.0 % year-on-year in Q316.
Please see Appendix A for details.
Net income of the Group as per IFRS declined to TRY163
million (TRY630 million) in Q316. This was mainly due to higher
quarterly translation losses, the negative contribution of Fintur,
as well as increased interest expense on loans and 4.5G payables,
and a higher amortization expense due to the 4.5G license.
Moreover, in Q316 we booked a provision of TRY138 million to
benefit from the tax amnesty based on Article 6736 mainly relating
to our special communication tax dispute1. Proforma net income2 was
at TRY705 million (TRY677 million) in Q316.
The net income of Turkcell Turkey as per IFRS declined to TRY145
million (TRY605 million) in Q316, mainly due to the reasons
explained above with respect to the decline in Group net income.
Proforma net income2 was at TRY662 million (TRY649 million) in
Q316.
Please see Appendix A for a reconciliation of Group and Turkcell
Turkey proforma net income to net income as per IFRS.
(1) For details, please refer to consolidated financial
statements and notes as at and for September 30, 2016 under note 20
on our website.(2) We use "proforma net income" as a means of
presenting our net income net of certain non-operating items and
items that we believe are non-recurring. We define "proforma net
income" in this document as net Income excluding FX gain / (loss)
(including tax and minority impact), interest Income on time
deposits of Turkcell Iletisim Hizmetleri, interest expense on loans
& borrowings, share of profit of equity accounted investees
(Fintur), 4.5G license amortization and one-off items. Please note
that this is a non-GAAP measure and that we may in future
presentations change the scope of items that we deduct from net
income to arrive at "proforma net income."
Total debt as of September 30, 2016 rose to TRY8,132
million from TRY7,307 million as of June 30, 2016 mainly due to
loans utilized by our consumer finance company and a translation
increase in the FX denominated debt portfolio of Turkcell Turkey as
TRY depreciated against US$ and EUR.
- Turkcell Turkey’s debt was TRY6,802
million, of which TRY3,195 million (US$1,066 million) was
denominated in US$, TRY3,222 (EUR959 million) in EUR and the
remaining TRY385 million in TRY.
- The debt balance of lifecell was TRY345
million, denominated in UAH.
- Our consumer finance company had a debt
balance of TRY980 million denominated in TRY.
In accordance with our hedging policy, in July we engaged in a
participating cross currency swap transaction for US$150 million of
our Club loan. In August, with the easing in foreign exchange rates
we engaged in another participating cross currency swap transaction
for another US$100 million of our Club loan. With these
transactions, US$250 million of our Club loan with 4 year final
maturity and LIBOR + 2% annual interest rate has been swapped to
fixed rate TRY denominated liability. Moreover, by converting free
cash flow from operations to US$ and EUR, we decreased our foreign
exchange risk in Q316. Having taken these actions, Turkcell Group’s
short position, which was at US$1.2 billion as at the end of Q216,
declined to US$0.7 billion as at the end of Q316.
TRY4,865 million of our consolidated debt is set at a floating
rate, while TRY1,686 million will mature within less than a year.
(Please note that the figures in parentheses refer to US$ or EUR
equivalents).
Cash flow analysis: Capital expenditures, including
non-operational items amounted to TRY743.2 million in Q316. The
cash flow item noted as “other” included the positive impact of
decreases in advances given for fixed asset purchases (TRY210
million), prepaid expenses (TRY168 million) and other working
capital (TRY 431 million).
Capital expenditures, including non-operational items amounted
to TRY2,361.2 million in 9M16. The cash flow item noted as “other”
included payment of the second installment of the 4.5G license fee
(TRY1,320 million), the negative impact of the increase in advances
given for fixed asset purchases (TRY443 million) and the change in
other working capital (TRY354 million).
In Q316 and 9M16, operational capital expenditures* at the Group
level were at 18.6% and 21.5% of total revenues, respectively.
Consolidated Cash Flow (million TRY) Quarter
Nine Months Q315 Q316
9M15 9M16 EBITDA1 1,160.6
1,217.6 3,082.3 3,248.4 LESS: Capex and
License (634.4) (743.2) (2,347.3) (2,361.2) Turkcell Turkey (506.4)
(686.8) (1,533.6) (2,163.7) Turkcell International2 (126.0) (54.2)
(798.2) (187.0) Other Subsidiaries2 (2.0) (2.2) (15.5) (10.5) Net
interest Income 127.8 75.4 478.6 292.8 Other (94.0) 808.6 (1,270.1)
(2,117.3) Net Change in Debt (955.2) 518.4 (1,147.9) 3,664.7
Cash generated / (used) (395.3) 1,876.8
(1,204.4) 2,727.4 Cash balance before dividend
payment 3,902.5 5,646.2 7,827.5
5,646.2 Dividend paid -
- (3,925.0)
-
Cash balance after dividend payment 3,902.5
5,646.2 3,902.5 5,646.2
(1) EBITDA is a non-GAAP financial measure. See page 14 for the
reconciliation and an explanation of how we calculate Adjusted
EBITDA to net income.(2) The impact from the movement of reporting
currency (TRY) against local currencies of subsidiaries in other
countries is included in these lines.(*) Excluding license fees
Operational Review in Turkey
Summary of Operational data Q315
Q316 y/y % Number of subscribers
35.8 34.8 (2.8%) Mobile Postpaid
(million) 16.1 17.0 5.6% Mobile M2M (million) 1.7 2.0 17.6% Mobile
Prepaid (million) 18.1 15.7 (13.3%) Fiber (thousand) 851.6 991.6
16.4% ADSL (thousand) 567.6 723.2 27.4% IPTV (thousand) 170.7 323.3
89.4%
Churn (%) Mobile Churn (%) 6.9% 6.3% (0.6pp) Fixed
churn (%) 4.4% 5.3% 0.9pp
ARPU (Average Monthly Revenue per
User)
Mobile ARPU, blended (TRY)
26.1
27.9
6.9%
Postpaid 40.4
40.1
(0.7%)
Postpaid (excluding M2M) 44.9
45.1
0.4%
Prepaid 13.5 14.7 8.9% Fixed Residential ARPU, blended (TRY) 49.1
51.6 5.1%
Mobile MOU (Avg. Monthly Minutes of usage per subs)
blended 309.6 342.7
10.7%
The mobile customer base grew by 179 thousand quarterly net
additions to 32.8 million in total, driven by our value
propositions focused on a richer customer experience. The postpaid
subscriber base expanded by 218 thousand quarterly and by 897
thousand annual net additions to 17.0 million, comprising 52.0%
(47.1%) of the total subscriber base. Meanwhile, customers in the
more price-sensitive prepaid segment declined in parallel to our
expectations.
The fixed customer base has continued to grow, exceeding 1.7
million on 74 thousand quarterly net additions; 26 thousand were
fiber and 48 thousand were ADSL customers. Annually, we registered
296 thousand net additions to our fixed customer base, of which 140
thousand were fiber and 156 thousand were ADSL customers. IPTV
customers reached 323 thousand on 20 thousand quarterly and 153
thousand annual net additions. Mobile TV has been downloaded by 2.3
million users to date.
Mobile churn declined to 6.3% (6.9%) year-on-year, while fixed
churn was higher at 5.3% (4.4%) in Q316.
Mobile blended ARPU rose by 6.9% with our upsell strategy and
focus on high value customer groups, as well as increased package
penetration. The triple play ratio, which includes customers of
voice, data and services combined reached 28%(1) and contributed to
the ARPU rise. Excluding the impact of emergency packages, the
mobile ARPU increase would have been 8.8%.
Fixed residential ARPU rose 5.1% with the increase in multiplay
customers with TV2 to 34% of total residential fiber customers, in
addition to price increases and upsell efforts.
Mobile MoU rose by 10.7% driven by our increased postpaid base
and upsell efforts.
Smartphones on our network increased by 951 thousand quarterly
net additions leading to a smartphone penetration rate of 62%.
Accordingly, there were 18.5 million smartphones on our network at
quarter end, with 50% being 4.5G enabled.
(1) Breakdown among mobile voice users which excludes
subscribers who do not use their line in the last 3 months(2)
Multiplay customers with TV: Internet + TV users & internet +
TV + voice users
TURKCELL INTERNATIONAL
lifecell* Financial Data Quarter
Nine Months Q315 Q316
y/y% 9M15 9M16
y/y% Revenue (million UAH) 1,182.9
1,239.0 4.7% 3,317.6
3,523.8 6.2% EBITDA (million UAH) 412.5 333.4
(19.2%) 1,064.3 993.6 (6.6%)
EBITDA margin (UAH)
34.9% 26.9% (8.0pp) 32.1% 28.2%
(3.9pp) Net income / (loss) (million UAH)** (455.2) (120.0)
(73.6%) (4,308.5) 990.8 n.m
Capex (million UAH)
317.0 389.4 22.8%
5,468.7 1,408.8 (74.2%) Revenue
(million TRY) 157.9 145.6 (7.8%) 417.4 405.1 (2.9%)
EBITDA
(million TRY) 55.0 39.2 (28.7%)
134.3 114.1 (15.0%) EBITDA margin (TRY) 34.8%
26.9% (7.9pp) 32.2% 28.2% (4.0pp)
Net income / (loss) (million
TRY)** (58.9) (14.0)
(76.2%) (524.5) 106.2
n.m
(*) Since July 10, 2015, we hold a 100% stake in
lifecell.(**)During 3rd quarter of 2015, foreign exchange gains and
losses arising from receivable from or payable to a foreign
operation, the settlement of which is neither planned nor likely
occur in the foreseeable future, were considered to form part of a
net investment in a foreign operation and were recognized directly
in equity in the foreign currency translation differences in the
consolidated financial statements. Exchange differences arising in
the foreign operations’ individual financial statements which were
recognized directly in equity in the foreign currency translation
differences in the consolidated financial statements were
eliminated from the individual financial statements above for
reporting purposes.
lifecell revenues grew by 4.7% in local currency terms on
almost doubling mobile broadband revenues with the higher data
usage through the 3G+ network and increased terminal sales
following the launch in June 2016. Through its sales network and
online store, lifecell offers its customers a portfolio of
terminals bundled with its data packages. lifecell is the first
operator in Ukraine to be directly involved in terminal sales.
Revenue growth was impacted by the MTR cut in October 2015 on a
yearly basis. Eliminating this effect, lifecell would have recorded
10.9% revenue growth. Another MTR cut is announced for January 1,
2017 from UAH0.23/min to UAH0.15/min.
lifecell’s EBITDA declined by 19.2% in local currency terms with
an EBITDA margin of 26.9% (34.9%), due to higher network related
costs resulting from the 3G+ roll-out and operational leasing
expense post tower related sale and leaseback transactions, plus
higher marketing expenses.
lifecell’s revenues and EBITDA in TRY terms declined 7.8% and
28.7% year-on-year, respectively, impacted by annual
devaluation.
lifecell* Operational Data Q315
Q316 y/y% Number of subscribers
(million)1 13.8 12.5
(9.4%) Active (3 months)2 10.8 9.7 (10.2%)
MOU (minutes)
(12 months) 145.4 140.5 (3.4%) ARPU
(Average Monthly Revenue per User),
blended (UAH)
28.2 32.6 15.6% Active (3 months) (UAH)
36.7 42.7 16.3%
(1) 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.(2)
Active subscribers are those who in the past three months made a
revenue generating activity.(*) Since July 10, 2015, we hold a 100%
stake in lifecell.
lifecell has continued its rapid 3G+ network roll-out, offering
the largest geographical coverage in Ukraine in terms of number of
settlements covered. lifecell’s 3G+ adoption momentum continued,
reaching 3.1 million three-month active 3G data users. Meanwhile,
lifecell has more than doubled data usage per user since the
introduction of 3G+ with smartphone penetration of 52.7%, the
highest rate in the market
lifecell’s three-month active subscriber base reached 9.7
million on 62 thousand quarterly net additions. Blended ARPU
(3-month active) rose by 16.3% driven by increased mobile broadband
usage and smartphone tariffs with higher ARPU. MoU (12-month
active) fell by 3.4% due to changing consumer behavior.
BeST* Quarter Nine Months
Q315 Q316 y/y%
9M15 9M16 y/y% Number of
subscribers (million)1 1.5 1.6 6.7%
1.5 1.6 6.7% Active (3 months) 1.1
1.2 9.1% 1.1 1.2 9.1%
Revenue
(million BYN) 22.7 25.2 11.0% 59.3
72.1 21.6% EBITDA (million BYN) 0.5 1.2 140.0% 0.9
2.3 155.6%
EBITDA margin (BYN) 2.1% 4.6%
2.5pp 1.6% 3.2% 1.6pp Net loss (million
BYN)** (10.5) (11.1) 5.7% (291.2) (33.6) (88.5%)
Capex (million
BYN) 2.1 2.7 28.6%
6.3 7.8 23.8% Revenue
(million TRY) 39.3 38.0 (3.3%) 103.5 105.5 1.9%
EBITDA (million
TRY) 0.8 1.7 112.5% 1.7 3.4
100.0% EBITDA margin (TRY) 2.1% 4.6% 2.5pp 1.6% 3.2% 1.6pp
Net loss (million TRY)** (17.6) (16.8)
(4.5%) (511.0) (49.1) (90.4%) Capex
(million TRY) 3.4 4.8 41.2% 10.9
12.2 11.9%
(1) Starting from Q116, subscriber figure for BeST includes
suspended subscriptions whose contracts are still in place. All
figures presented in this document for prior periods have been
restated to reflect this change.(*)BeST, in which we hold an 80%
stake, has operated in Belarus since July 2008.(**)During 3rd
quarter of 2015, foreign exchange gains and losses arising from
receivable from or payable to a foreign operation, the settlement
of which is neither planned nor likely occur in the foreseeable
future, were considered to form part of a net investment in a
foreign operation and were recognized directly in equity in the
foreign currency translation differences in the consolidated
financial statements. Exchange differences arising in the foreign
operations’ individual financial statements which were recognized
directly in equity in the foreign currency translation differences
in the consolidated financial statements were eliminated from the
individual financial statements above for reporting purposes.
BeST revenues grew by 11.0% in Q316 in local currency
terms with the expansion of the subscriber base along with
increased voice and terminal revenues on higher smartphone sales.
EBITDA margin improved by 2.5pp to 4.6% (2.1%), mainly driven by
top-line growth and better operational expense management.
BeST’s revenues in TRY terms declined 3.3% year-on-year impacted
by annual devaluation, while EBITDA in TRY terms more than
doubled.
BeST launched 4G services in August with a one month free trial
for all customers in partnership with beCloud. From September
onwards, a wide range of commercial product portfolios covering
packages from 2GB to 50GB have been offered. BeST is committed to
offer new mobile services as part of Turkcell’s globally relevant
services strategy. For now, 4G services are only available in Minsk
city centre.
KKTCELL (million TRY)* Quarter Nine
Months Q315 Q316 y/y%
9M15 9M16 y/y% Number of
subscribers (million)1 0.5 0.5 -
0.5 0.5 - Revenue 33.3 34.2 2.7% 97.6 100.3
2.8%
EBITDA 12.7 13.7 7.9% 37.9
37.8 (0.3%) EBITDA margin 38.0% 40.1% 2.1pp 38.9%
37.7% (1.2pp)
Net income 7.5 8.1 8.0%
22.2 25.0 12.6% Capex 8.8 5.7
(35.2%) 15.5 12.9 (16.8%)
(1) Starting from Q116, subscriber figure for KKTCELL includes
M2M subscriptions as well. All figures presented in this document
for prior periods have been restated to reflect this change.(*)
KKTCELL, in which we hold a 100% stake, has operated in Northern
Cyprus since 1999.
KKTCELL’s revenues increased by 2.7% year-on-year to
TRY34 million, reflecting mobile broadband growth on the back of
higher data demand. EBITDA increased by 7.9% to TRY14 million
leading to an EBITDA margin of 40.1% (38.0%).
Fintur’s consolidated revenues declined by 38.4%
year-on-year in Q316. Still high competition in Kazakhstan
pressured Kcell revenues. Year-on-year currency devaluation also
impacted Kcell and Azercell revenues negatively. Fintur subscribers
increased by 319 thousand quarterly net additions in Q316 to 17.0
million, mainly driven by Kcell and Geocell. Fintur had a negative
contribution of US$2 million (US$28 million positive contribution)
to Group net income in Q316. This was mainly due to weak
operational performance, currency devaluation and impairment.
Fintur* Quarter Nine Months
Q315 Q316 y/y%
9M15 9M16 y/y% Subscribers
(million)1 17.9 17.0 (5.0%)
17.9 17.0 (5.0%) Kazakhstan 10.8 9.9 (8.3%)
10.8 9.9 (8.3%) Azerbaijan 4.2 4.2 - 4.2 4.2 - Moldova 0.9 0.9 -
0.9 0.9 - Georgia 2.0 2.0 - 2.0 2.0 -
Revenue (million US$)
346 213 (38.4%) 1,107 618
(44.2%) Kazakhstan 201 108 (46.3%) 666 317 (52.4%)
Azerbaijan 105 64 (39.0%) 319 188 (41.1%) Moldova 16 16 - 49 44
(10.2%) Georgia 25 25 - 73 69 (5.5%)
Fintur’s contribution to
Group’s net income 28 (2)
(107.1%) 102 1
(99.0%)
(1) Telia Company disclosed a change to the definition of
prepaid mobile subscription for all countries of operations in its
Q115 results announcement on April 21, 2015. Prepaid subscriptions
are counted if the subscriber has been active during the last three
months. In line with Telia Company’s reporting, we disclose Fintur
operations’ subscriber numbers as three-month active. Prior periods
are restated accordingly.(*) We hold a 41.45% stake In Fintur,
which has interests in Kazakhstan, Azerbaijan, Moldova and
Georgia.
Turkcell Group Subscribers
Turkcell Group subscribers amounted to approximately 66.7
million as of September 30, 2016. This figure is calculated by
taking the number of subscribers of Turkcell Turkey and each of our
subsidiaries and unconsolidated investees. It includes the total
number of mobile, fiber, ADSL and IPTV subscribers of Turkcell
Turkey, the mobile subscribers of lifecell and BeST, as well as
those of KKTCELL, Turkcell Europe and Fintur.
Turkcell Group Subscribers Q315
Q316 y/y % Mobile Postpaid (million) 16.1 17.0
5.6% Mobile Prepaid (million) 18.1 15.7 (13.3%) Fiber (thousand)
851.6 991.6 16.4% ADSL (thousand) 567.6 723.2 27.4% IPTV (thousand)
170.7 323.3 89.4%
Turkcell Turkey subscribers
(million)1 35.8 34.8 (2.8%) Ukraine
13.8 12.5 (9.4%) Belarus2 1.5 1.6 6.7% KKTCELL3 0.5 0.5 - Turkcell
Europe4 0.3 0.3 -
Consolidated Subscribers (million)
52.0 49.7 (4.4%) Fintur5 17.9 17.0 (5.0%)
Turkcell Group Subscribers* (million) 69.8
66.7 (4.4%)
(*) Turkcell Group subscribers figure includes the subscriber
figures of our non-consolidated subsidiaries.(1) Subscribers to
more than one service are counted separately for each service.(2)
Starting from Q116, subscriber figure for BeST includes suspended
subscriptions whose contracts are still in place. All figures
presented in this document for prior periods have been restated to
reflect this change.(3) Starting from Q116, subscriber figure for
KKTCELL includes M2M subscriptions as well. All figures presented
in this document for prior periods have been restated to reflect
this change.(4) The “wholesale traffic purchase” agreement, signed
between Turkcell Europe GmbH operating in Germany and Deutsche
Telekom for five years in 2010, had been modified to reflect the
shift in business model to a “marketing partnership”. The new
agreement between Turkcell and a subsidiary of Deutsche Telekom was
signed on August 27, 2014. The transfer of Turkcell Europe
operations to Deutsche Telekom’s subsidiary was completed on
January 15, 2015. Subscribers are still included in the Turkcell
Group Subscriber figure.(5)Telia Company disclosed a change to the
definition of prepaid mobile subscription for all countries of
operations in its Q115 results announcement on April 21, 2015.
Prepaid subscriptions are counted if the subscriber has been active
during the last three months. In line with Telia Company’s
reporting, we disclose Fintur operations’ subscriber numbers as
three-month active. Prior periods are restated accordingly.
OVERVIEW OF THE MACROECONOMIC ENVIRONMENT
The foreign exchange rates used in our financial reporting,
along with certain macroeconomic indicators, are set out below.
Quarter Nine Months Q315
Q216 Q316 y/y%
q/q% 9M15 9M16
y/y% US$ / TRY rate Closing Rate 3.0433 2.8936 2.9959
(1.6%) 3.5% 3.0433 2.9959 (1.6%) Average Rate 2.8513 2.8736 2.9706
4.2% 3.4% 2.6572 2.9215 9.9%
EUR / TRY rate Closing Rate
3.4212 3.2044 3.3608 (1.8%) 4.9% 3.4212 3.3608 (1.8%) Average Rate
3.1772 3.2292 3.3104 4.2% 2.5% 2.9626 3.2523 9.8%
Consumer Price
Index (Turkey) 1.4% 1.8% 1.1%
(0.3pp) (0.7pp) 6.2% 4.7%
(1.5pp) GDP Growth (Turkey) 3.9% 3.1%
n.a n.a n.a 3.4% n.a n.a
US$ / UAH rate Closing Rate 21.53 24.85 25.91 20.3% 4.3%
21.53 25.91 20.3% Average Rate 21.36 25.30 25.28 18.4% (0.1%) 21.32
25.45 19.4%
US$ / BYN rate* Closing Rate 1.7703 2.0053
1.9264 8.8% (3.9%) 1.7703 1.9264 8.8% Average Rate 1.6428
1.9698 1.9732 20.1% 0.2% 1.5253
1.9994 31.1%
* The official currency of the Republic of Belarus has been
redenominated on July 1, 2016. As a result, BYR10,000 has become
BYN1 starting from 1 July 2016. Prior periods have been adjusted
accordingly for presentation purposes.
RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We
believe Adjusted EBITDA, among other measures, facilitates
performance comparisons from period to period and management
decision making. It also facilitates performance comparisons from
company to company. Adjusted EBITDA as a performance measure
eliminates potential differences caused by variations in capital
structures (affecting interest expense), tax positions (such as the
impact of changes in effective tax rates on periods or companies)
and the age and book depreciation of tangible assets (affecting
relative depreciation expense). We also present Adjusted EBITDA
because we believe it is frequently used by securities analysts,
investors and other interested parties in evaluating the
performance of other mobile operators in the telecommunications
industry in Europe, many of which present Adjusted EBITDA when
reporting their results.
Our Adjusted EBITDA definition includes Revenue, Direct Cost of
Revenue excluding depreciation and amortization, Selling and
Marketing expenses and Administrative expenses, but excludes
translation gain/(loss), finance income, share of profit of equity
accounted investees, gain on sale of investments, income/(loss)
from related parties, minority interest and other
income/(expense).
Nevertheless, Adjusted EBITDA has limitations as an analytical
tool, and you should not consider it in isolation from, or as a
substitute for analysis of, our results of operations, as reported
under IFRS. The following table provides a reconciliation of
Adjusted EBITDA, as calculated using financial data prepared in
accordance with IFRS as issued by the IASB, to net profit, which we
believe is the most directly comparable financial measure
calculated and presented in accordance with IFRS as issued by the
IASB.
Turkcell Group (million TRY) Quarter
Nine Months Q315 Q316
y/y% 9M15 9M16
y/y% Adjusted EBITDA 1,160.6 1,217.6
4.9% 3,082.3 3,248.4 5.4% Finance
income 175.1 187.2 6.9% 602.6 570.9 (5.3%) Finance costs (144.7)
(349.7) 141.7% (658.5) (545.4) (17.2%) Other income / (expense)
(18.4) (192.6) 946.7% (194.9) (189.9) (2.6%) Share of profit of
equity accounted investees 80.1 (5.1) (106.4%) 268.9 2.2 (99.2%)
Depreciation and amortization (426.9) (577.0) 35.2% (1,230.7)
(1,598.9) 29.9%
Consolidated profit before income tax &
minority interest 825.8 280.4 (66.0%)
1,869.7 1,487.3 (20.5%) Income tax expense
(183.2) (106.3) (42.0%) (557.9) (311.9) (44.1%)
Consolidated
profit before minority interest 642.6
174.1 (72.9%) 1,311.8
1,175.4 (10.4%)
FORWARD-LOOKING STATEMENTS: 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 in 2016 and our 4.5G
development in Turkey and our three year outlook regarding adequacy
of funding. More generally, all statements other than statements of
historical facts included in this press release, including, without
limitation, certain statements regarding 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 2015 filed with
the U.S. Securities and Exchange Commission, and in particular the
risk factor section therein. We undertake no duty to update or
revise any forward looking statements, whether as a result of new
information, future events or otherwise.
ABOUT TURKCELL: Turkcell is a converged telecommunication
and technology services provider, founded and headquartered in
Turkey. It serves its customers with voice, data, TV and
value-added consumer and enterprise services on mobile and fixed
networks. Turkcell launched LTE services in its home country on
April 1st, 2016, employing LTE-Advanced and 3 carrier aggregation
technologies in 81 cities. In 2G and 3G, Turkcell’s population
coverage is at 99.75% and 95.26%, respectively, as of September
2016. It offers up to 1 Gbps fiber internet speed with its FTTH
services. Turkcell Group companies serve 66.7 million subscribers
in 9 countries – Turkey, Ukraine, Belarus, Northern Cyprus,
Germany, Azerbaijan, Kazakhstan, Georgia, Moldova – as of September
30, 2016. Turkcell Group reported a TRY3.7 billion revenue in Q316
with total assets of TRY30.2 billion as of September 30, 2016. It
has been listed on the NYSE and the BIST since July 2000, and is
the only NYSE-listed company in Turkey. Read more at
www.turkcell.com.tr
This press release can also be viewed using the Turkcell
Investor Relation app, which can be downloaded
here for iOS,
and here for Android mobile
devices.
Appendix A – Tables
Table: Translation gain and loss details
Million TRY Quarter Nine Months
Q315 Q316 y/y %
9M15 9M16 y/y % Turkcell Turkey
(48.6) (233.3) 380.0% 356.2 (260.4) (173.1%) Turkcell International
(50.6) (7.0) (86.2%) (894.5) (7.8) (99.1%) Other Subsidiaries 1.9
2.4 26.3% 3.8 0.9 (76.3%)
Turkcell Group
(97.3) (237.9) 144.5%
(534.5) (267.3) (50.0%)
Table: Income tax expense details
Million TRY Quarter Nine Months
Q315 Q316 y/y %
9M15 9M16 y/y % Current Tax
expense (147.9) (37.7) (74.5%) (545.0) (188.3) (65.4%) Deferred Tax
Income/expense (35.3) (68.6) 94.3% (12.9) (123.6) 858.1%
Income
Tax expense (183.2) (106.3)
(42.0%) (557.9) (311.9)
(44.1%)
Table: Reconciliation of proforma net income to net income
per IFRS
Group net income:
Net income impacts (million TRY) Q315
Net income impacts (million TRY) Q316
Proforma net income 677 Proforma net income
705 FX impact (net of tax and minority interest) (108) FX
impact (net of tax) (193) Interest income (net of tax) 24 Interest
income (net of tax) 50 Interest expense (net of tax) (32) Interest
expense (net of tax) (89)
One-off impacts (net of
tax) One-off impacts (net of tax) Provision
booked for tax amnesty (138) 4.5G license depreciation (81) Coup
attempt emergency communication packages (48) Fintur contribution
76 Fintur contribution (5) Other impacts (7) Other impacts (38)
Net income - IFRS 630 Net income -IFRS
163 Net income impacts (million TRY)
9M15 Net income impacts (million TRY)
9M16 Proforma net income 1,738
Proforma net income 1,822 FX impact (net of tax and
minority interest) (442) FX impact (net of tax) (216) Interest
income (net of tax) 165 Interest income (net of tax) 71 Interest
expense (net of tax) (75) Interest expense (net of tax) (207)
One-off impacts (net of tax) One-off impacts (net
of tax) Provision booked for tax amnesty (138) 4.5G
license depreciation (180) Commercial agreement terminations (112)
Coup attempt emergency communication packages (48) Fintur
contribution 255 Fintur contribution 2 Other impacts (45) Other
impacts 35
Net income - IFRS 1,484 Net
income - IFRS 1,141
Turkcell Turkey net income:
Net income impacts (million TRY) Q315
Net income impacts (million TRY) Q316
Proforma net income 649 Proforma net income
662 FX impact (net of tax ) (58) FX impact (net of tax)
(187) Interest income (net of tax) 24 Interest income (net of tax)
50 Interest expense (net of tax) (5) Interest expense (net of tax)
(78)
One-off impacts (net of tax) One-off impacts
(net of tax) Provision booked for tax amnesty (138) 4.5G
license depreciation (81) Coup attempt emergency communication
packages (48) Other impacts (5) Other impacts (35)
Net income -
IFRS 605 Net income -IFRS
145 Net income impacts (million TRY)
9M15 Net income impacts (million TRY)
9M16 Proforma net income 1,708
Proforma net income 1,735 FX impact (net of tax) 266
FX impact (net of tax) (208) Interest income (net of tax) 165
Interest income (net of tax) 71 Interest expense (net of tax) (20)
Interest expense (net of tax) (174)
One-off impacts (net
of tax) One-off impacts (net off tax) Provision
booked for tax amnesty (138) 4.5G license depreciation (180)
Commercial agreement terminations (112) Coup attempt emergency
communication packages (48) Other impacts (41) Other impacts 36
Net income - IFRS 1,966 Net income -
IFRS 1,094
TURKCELL ILETISIM HIZMETLERI A.S.
IFRS SELECTED FINANCIALS (TRY
Million)
Quarter Ended
Quarter Ended Quarter Ended Nine Months Ended
Nine Months Ended September 30, June 30,
September 30, September 30, September 30,
2015 2016
2016 2015
2016 Consolidated Statement of
Operations Data Turkcell Turkey 3,034.7 3,008.2 3,275.7 8,483.1
9,211.4 Consumer 2,403.8 2,385.0 2,625.8 6,736.3 7,348.7 Corporate
518.6 539.5 536.4 1,502.5 1,600.4 Other 112.3 83.7 113.5 244.3
262.3 Turkcell International 234.7 203.8 222.4 632.4 623.1 Other
94.4 146.1 160.4 319.5 407.5 Total revenues 3,363.8 3,358.1 3,658.5
9,435.0 10,242.0 Direct cost of revenues (1,987.8) (2,236.9)
(2,373) (5,714.7) (6,628.3) Gross profit 1,376.0 1,121.2 1,285.9
3,720.3 3,613.7 Administrative expenses (168.2) (175.8) (177.3)
(459.4) (531.8) Selling & marketing expenses (474.1) (483.2)
(468.0) (1,409.3) (1,432.4) Other Operating Income / (Expense)
(18.4) 13.8 (192.6) (194.9) (189.9) Operating profit before
financing costs 715.3 476.0 448.0 1,656.7 1,459.6 Finance costs
(144.7) (140.7) (349.7) (658.5) (545.4) Finance income 175.1 162.5
187.2 602.6 570.9 Share of profit of equity accounted investees
80.1 (7.9) (5.1) 268.9 2.2 Income before taxes and minority
interest 825.8 489.9 280.4 1,869.7 1,487.3 Income tax expense
(183.2) (62.2) (106.3) (557.9) (311.9) Income before minority
interest 642.6 427.7 174.1 1,311.8 1,175.4 Non-controlling
interests (12.2) (11.6) (11.5) 171.7 (34.0) Net income 630.4 416.1
162.6 1,483.5 1,141.4 Net income per share 0.29 0.19 0.07
0.67 0.52
Other Financial Data Gross margin
40.9% 33.4% 35.1% 39.4% 35.3% EBITDA(*) 1,160.6 1,029.3 1,217.6
3,082.3 3,248.4 Capital expenditures 634.4 879.6 743.2 2,347.3
2,361.2
Consolidated Balance Sheet Data (at period
end) Cash and cash equivalents 3,902.5 3,769.4 5,646.2 3,902.5
5,646.2 Total assets 20,579.0 28,595.3 30,230.3 20,579.0 30,230.3
Long term debt 582.2 6,209.1 6,445.2 582.2 6,445.2 Total debt
3,466.6 7,307.2 8,131.5 3,466.6 8,131.5 Total liabilities 6,781.3
13,245.5 14,785.1 6,781.3 14,785.1 Total shareholders’ equity / Net
Assets 13,797.7 15,349.8 15,445.3 13,797.7 15,445.3
(*) 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 30
September 2016 on our web site.
TURKCELL ILETISIM HIZMETLERI A.S.
CMB SELECTED FINANCIALS (TRY
Million)
Quarter Ended
Quarter Ended Quarter Ended Nine Months Ended
Nine Months Ended September 30, June 30,
September 30, September 30, September 30,
2015 2016
2016 2015
2016 Consolidated Statement of
Operations Data Turkcell Turkey 3,034.7 3,008.2 3,275.7 8,483.1
9,211.4 Consumer 2,403.8 2,385.0 2,625.8 6,736.3 7,348.7 Corporate
518.6 539.5 536.4 1,502.5 1,600.4 Other 112.3 83.7 113.5 244.3
262.3 Turkcell International 234.7 203.8 222.4 632.4 623.1 Other
94.4 146.1 160.4 319.5 407.5 Total revenues 3,363.8 3,358.1 3,658.5
9,435.0 10,242.0 Direct cost of revenues (1,987.1) (2,236.1)
(2,356.3) (5,712.3) (6,610.7) Gross profit 1,376.7 1,122.0 1,302.2
3,722.7 3,631.3 Administrative expenses (168.2) (175.8) (177.3)
(459.4) (531.8) Selling & marketing expenses (474.1) (483.2)
(468.0) (1,409.3) (1,432.4) Other Operating Income / (Expense)
218.0 145.2 105.9 940.8 471.5 Operating profit before financing and
investing costs 952.4 608.2 762.8 2,794.8 2,138.6 Income from
investing activities 3.0 (0.6) 7.6 8.7 16.3 Expense from investing
activities (20.0) (6.1) (6.5) (46.8) (19.6) Share of profit of
equity accounted investees 80.1 (7.9) (5.1) 268.9 2.2 Income before
financing costs 1,015.5 593.6 758.8 3,025.6 2,137.5 Finance expense
(188.8) (103.4) (456.1) (1,153.7) (627.1) Income before tax and
non-controlling interest 826.7 490.2 302.7 1,871.9 1,510.4 Income
tax expense (183.2) (62.4) (109.4) (558.3) (315.3) Income before
non-controlling interest 643.5 427.8 193.3 1,313.6 1,195.1
Non-controlling interest (12.2) (11.6) (11.5) 171.7 (34.0) Net
income 631.3 416.2 181.8 1,485.3 1,161.1 Net income per
share 0.29 0.19 0.08 0.68 0.53
Other Financial Data
Gross margin 40.9% 33.4% 35.6% 39.5% 35.5% EBITDA(*) 1,160.6
1,029.3 1,217.6 3,082.3 3,248.4 Capital expenditures 634.4 879.6
743.2 2,347.3 2,361.2
Consolidated Balance Sheet Data (at
period end) Cash and cash equivalents 3,902.5 3,769.4 5,646.2
3,902.5 5,646.2 Total assets 20,555.1 28,572.9 30,230.3 20,555.1
30,230.3 Long term debt 582.2 6,209.1 6,445.2 582.2 6,445.2 Total
debt 3,466.6 7,307.2 8,131.5 3,466.6 8,131.5 Total liabilities
6,777.8 13,242.2 14,785.1 6,777.8 14,785.1 Total shareholders’
equity / Net Assets 13,777.3 15,330.7 15,445.3 13,777.3 15,445.3
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161102006173/en/
TurkcellInvestor RelationsNihat Narin, Tel: + 90
212 313 1888Director of Investor
Relationsinvestor.relations@turkcell.com.trorCorporate
Communications:Tel: + 90 212 313
2321Turkcell-Kurumsal-Iletisim@turkcell.com.tr
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