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”). All non-financial data is unconsolidated and comprises
Turkcell only figures. The terms "we", "us", and "our" in this press
release refer only to the Company, except in discussions of financial
data, where such terms refer to the Group, and where context otherwise
requires.
-
In this press release, year-on-year comparison of our key indicators
is provided and figures in parentheses following the operational and
financial results for the year end 2014 refer to the same item at the
year end of 2013 and figures in parentheses following the operational
and financial results for the fourth quarter of 2014 refer to the same
item in the fourth quarter of 2013. For further details, please refer
to our consolidated financial statements and notes as at and for the
year ended December 31, 2014, which can be accessed via our website in
the investor relations section (www.turkcell.com.tr).
-
Please note that selected financial information presented in this
press release for the fourth quarters and year end of 2014 and 2013,
both in TRY and US$ is based on IFRS figures.
-
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.
HIGHLIGHTS
FULL YEAR
-
Turkcell Group revenues and EBITDA1 both grew by 6% to
TRY12,044 million (TRY11,408 million) and TRY3,762 million (TRY3,544
million), respectively. EBITDA margin was at 31.2% (31.1%).
-
Net income fell 20% to TRY1,865 million (TRY2,326 million), adversely
impacted mainly by macroeconomic conditions in our international
markets of operation as well as several one off items. Excluding the
one-off items, net income would be TRY2,135 million2.
-
Mobile business revenues in Turkey rose 3% to TRY9,369 million
(TRY9,123 million) with an EBITDA margin of 31.2% (31.0%).
-
Mobile broadband revenues grew by 34% to TRY1,931 million
(TRY1,437 million) with strong demand for data.
-
Voice revenues3 fell by 1% to TRY6,374 million
(TRY6,460 million), mainly due to lower MTRs.
-
Subsidiaries4 registered revenue growth of 17% to TRY2,674
million (TRY2,285 million) and EBITDA growth of 18% to TRY838 million
(TRY712 million).
-
On January 28, 2015, Turkcell announced CEO, Sureyya Ciliv’s
resignation. On the same day, the Turkcell Board of Directors
appointed Ilker Kuruoz as acting CEO in addition to his role as the
Chief Technology Group Officer.
FOURTH QUARTER 2014
-
Group revenues grew by 8% to TRY3,103 million (TRY2,884 million) with
the higher contribution of mobile broadband and fiber broadband
revenues.
-
Group EBITDA1 rose 8% to TRY917 million (TRY851 million)
with an EBITDA margin of 29.6% (29.5%).
-
Net income fell by 49% to TRY258 million (TRY505 million), mainly due
to currency devaluation in Ukraine and Belarus, along with various
one-offs. Excluding one-off impacts, net income would be TRY390 million2.
-
Mobile business revenues in Turkey reached TRY2,392 million (TRY2,240
million) on 7% growth, while the EBITDA margin rose to 30.1% (29.9%).
-
Mobile broadband revenues rose by 44% to TRY567 million (TRY394
million), posting the highest growth rate of the year.
-
Voice revenues3 grew by 1% to TRY1,555 million
(TRY1,547 million).
-
Revenues of subsidiaries4 climbed 10% to TRY711 million
(TRY644 million) with an EBITDA increase of 8% to TRY196 million
(TRY181 million).
(1) EBITDA is a non-GAAP financial measure. See page 16 for the
reconciliation of EBITDA to net cash from operating activities.
(2)
The adjusted figures are non-IFRS measures. For further details on the
factors for which adjustments have been made and on the calculation of
the adjustments, please see page 9.
(3) Voice revenues include
outgoing, incoming, roaming and other (comprising almost 1% of Turkcell
Turkey) revenues.
(4) Including eliminations.
(*) For details,
please refer to our consolidated financial statements and notes as at,
and for the year ended December 31, 2014 which can be accessed on our
web site in the investor relations section (www.turkcell.com.tr).
COMMENTS FROM CEO, ILKER KURUOZ
“Turkcell Group reached its 2014 targets. Consolidated revenues rose 6%
to TRY12 billion, while EBITDA grew 6% to TRY3.8 billion. Meanwhile,
EBIT rose 9% to TRY2.1 billion, while net income declined by 20% to
TRY1.9 billion, mainly due to unfavorable macroeconomic conditions in
countries of our international operations.
In 2014, Turkcell Turkey’s revenues grew by 3% on 34% growth in mobile
broadband. Meanwhile, Turkcell Superonline revenues grew by 35%
year-on-year on the back of an increased fiber subscriber base. Our
Ukrainian business sustained its operational performance, and
accordingly its revenues rose by 13% in local currency terms.
Nonetheless, its revenues contracted 12% in TRY terms due to 97% local
currency devaluation in Ukraine.
The Turkcell team in 2014 continued to differentiate itself with its
focus on providing superior customer experience and best-in-class
service to create more value for its customers through technology,
innovation, and operational excellence. We introduced the Turkcell T50
to our customers, Turkey’s first operator branded smartphone with 4G,
which ranked among the top selling smartphones in Turkey. Meanwhile, we
launched our TV platform Turkcell TV Plus which, differentiated by the
synergy between our 3G network and fiber infrastructure, strengthened
our offering with a triple play service.
We are proud to have transformed Turkcell from a GSM only operator to a
leading communication and technology company, both in Turkey and in the
region, over the past 20 years. We sustain our pioneering role and
leadership of the sector through consistent investment in technology and
infrastructure, thereby providing our customers superior value. In the
4G era, we target creating more value for our customers with a sustained
focus on quality, supported by accelerated investments, and innovative
products and services.
We believe that the strong team spirit of Turkcell employees and support
of our business partners, who together have made the company “Turkey’s
Turkcell”, will ensure continued success. We thank all of our
stakeholders for sharing our success story with us.”
OVERVIEW OF TURKCELL TURKEY
The mobile market remained competitive in 2014. The market continued to
opt for price oriented offers over product, service and network speed.
Furthermore, the market has shifted towards increased data incentive
bundled offers. Despite some upward price adjustments in early Q414,
these did not lead to significant improvement in overall competition. In
light of the first quarter of 2015 thus far, we expect this competitive
environment to prevail.
As Turkcell, our strategy has always been to provide a superior and
differentiating customer experience through operational excellence and
investment in technology and innovation, ensuring a high quality
offering.
As a result of our continued focus on quality, our postpaid subscriber
base expanded by 1.2 million yearly net additions to 15.2 million.
Accordingly, the postpaid share in total subscribers reached 44%, and
70% in total revenues. Overall, our subscriber base declined by 0.5
million to 34.6 million, mainly through losses from the more
price-sensitive prepaid segment. Meanwhile, blended ARPU for the full
year rose by 4% driven by an increased postpaid subscriber base and
rising mobile data demand.
On the smartphone front, the momentum has continued, despite the
regulatory change on credit card payment and local currency
depreciation. This durable growth of the smartphone market should help
us realize our strategy to monetize the mobile broadband business. Our
attractive contracted offers and the success of our affordable T-branded
smartphones led to 3.1 million additions to our smartphone base, which
rose to 12.7 million. This amounted to a 10 pp yearly increase in
smartphone penetration on our network to 40%.
In 2014, we had continued to differentiate ourselves with our innovative
products and services. We strengthened our leading M2M solution provider
position with the launch of our “Connected Car Platform”. We expanded
Turkcell-branded applications further with “Super SmallBiz” targeting
small businesses and “Turkcell My Child and Me” for parents. Our latest
T-series smartphone, T-50, became the top selling smartphone in Turkey
in Q314, while Turkcell TV+, our TV platform, strengthened our product
offering and enabled Turkcell Superonline to provide triple play
services.
Looking forward, we remain quite enthusiastic about the new era of 4G in
Turkey. We aim to sustain our technology leadership in the market by
leveraging on the synergy with our fiber broadband subsidiary to ensure
our customers enjoy the full value of the 4G environment.
Turkcell Group Guidance*:
For 2015, we anticipate continued growth on a consolidated basis, mainly
through our mobile broadband and fiber broadband businesses in Turkey.
We target consolidated revenues in the range of TRY12,800 – TRY13,100
million and consolidated EBITDA in the range of TRY3,850 – TRY4,050
million. In accordance with our growth plans, we expect an operational
capex to sales ratio of around 20%, with increased investments in
preparation of the mobile network to 4G transition, further expansion of
the fiber network, and the roll out of Astelit’s 3G network. This ratio
excludes new spectrum fees in Turkey and Ukraine related to 4G and 3G,
respectively, which are expected to be auctioned this year.
(*) 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 2013 filed with U.S. Securities
and Exchange Commission, and in particular, the risk factor section
therein.
FINANCIAL AND OPERATIONAL REVIEW
The following discussion focuses principally on the developments and
trends in our business in the fourth quarter and full year 2014 in TRY
terms. Selected financial information presented in this press release
for the fourth quarters and for the full year 2014 and 2013, both in TRY
and US$, is based on IFRS figures.
Selected financial information for the fourth quarter of 2013, third and
fourth quarters of 2014 and full year 2013 and 2014, both in TRY and US$
prepared in accordance with IFRS, and in TRY prepared in accordance with
the Turkish Accounting standards is also included at the end of this
press release.
Financial Review of Turkcell Group
|
Profit & Loss Statement
(million TRY)
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
y/y %
|
|
FY13
|
|
FY14
|
|
y/y %
|
|
Total Revenue
|
|
2,883.6
|
|
3,103.2
|
|
7.6%
|
|
11,407.9
|
|
12,043.6
|
|
5.6%
|
|
Direct cost of revenues1
|
|
(1,851.3)
|
|
(1,972.2)
|
|
6.5%
|
|
(7,063.9)
|
|
(7,383.9)
|
|
4.5%
|
|
Direct cost of revenues1/revenues
|
|
(64.2%)
|
|
(63.6%)
|
|
0.6pp
|
|
(61.9%)
|
|
(61.3%)
|
|
0.6pp
|
|
Depreciation and amortization
|
|
(481.6)
|
|
(450.7)
|
|
(6.4%)
|
|
(1,594.4)
|
|
(1,639.4)
|
|
2.8%
|
|
Gross Margin
|
|
35.8%
|
|
36.4%
|
|
0.6pp
|
|
38.1%
|
|
38.7%
|
|
0.6pp
|
|
Administrative expenses
|
|
(152.0)
|
|
(146.8)
|
|
(3.4%)
|
|
(550.3)
|
|
(562.7)
|
|
2.3%
|
|
Administrative expenses/revenues
|
|
(5.3%)
|
|
(4.7%)
|
|
0.6pp
|
|
(4.8%)
|
|
(4.7%)
|
|
0.1pp
|
|
Selling and marketing expenses
|
|
(510.4)
|
|
(517.8)
|
|
1.4%
|
|
(1,843.6)
|
|
(1,974.6)
|
|
7.1%
|
|
Selling and marketing expenses/revenues
|
|
(17.7%)
|
|
(16.7%)
|
|
1.0pp
|
|
(16.2%)
|
|
(16.4%)
|
|
(0.2pp)
|
|
EBITDA2
|
|
851.5
|
|
917.1
|
|
7.7%
|
|
3,544.5
|
|
3,761.8
|
|
6.1%
|
|
EBITDA Margin
|
|
29.5%
|
|
29.6%
|
|
0.1pp
|
|
31.1%
|
|
31.2%
|
|
0.1pp
|
|
EBIT3
|
|
369.9
|
|
466.4
|
|
26.1%
|
|
1,950.1
|
|
2,122.4
|
|
8.8%
|
|
Net finance income / (expense)
|
|
149.7
|
|
(176.9)
|
|
(218.2%)
|
|
555.3
|
|
(291.6)
|
|
(152.5%)
|
|
Finance expense
|
|
(89.7)
|
|
(400.1)
|
|
346.0%
|
|
(204.6)
|
|
(1,247.0)
|
|
509.5%
|
|
Finance income
|
|
239.4
|
|
223.2
|
|
(6.8%)
|
|
759.9
|
|
955.4
|
|
25.7%
|
|
Share of profit of associates
|
|
75.8
|
|
(6.9)
|
|
(109.1%)
|
|
297.3
|
|
207.3
|
|
(30.3%)
|
|
Other income / (expense)
|
|
(35.6)
|
|
1.4
|
|
(103.9%)
|
|
(58.9)
|
|
(76.3)
|
|
29.5%
|
|
Monetary gains / (losses)
|
|
72.5
|
|
32.3
|
|
(55.4%)
|
|
176.9
|
|
205.1
|
|
15.9%
|
|
Non-controlling interests
|
|
(7.9)
|
|
128.9
|
|
n.m.
|
|
(3.4)
|
|
428.2
|
|
n.m.
|
|
Income tax expense
|
|
(119.5)
|
|
(187.3)
|
|
56.7%
|
|
(591.4)
|
|
(730.4)
|
|
23.5%
|
|
Net Income
|
|
504.9
|
|
257.9
|
|
(48.9%)
|
|
2,325.9
|
|
1,864.7
|
|
(19.8%)
|
(1) Including depreciation and amortization expenses.
(2) EBITDA is
a non-GAAP financial measure. See page 16 for the reconciliation of
EBITDA to net cash from operating activities.
(3) EBIT is a
non-GAAP financial measure and is equal to EBITDA minus depreciation and
amortization expenses.
Revenue grew by 7.6% year-on-year to TRY3,103.2 million
(TRY2,883.6 million) in Q414 driven by:
-
6.8% rise in mobile business revenues in Turkey to TRY2,391.7 million
(TRY2,239.5 million)
-
43.9% growth in mobile broadband revenues to TRY566.7 million
(TRY393.7 million) with increased smartphone users on our network,
higher number of mobile broadband users and increased data usage
-
25.7% fall in SMS revenues due to the declining usage trend
impacted by the adoption of OTT (“over the top” messaging) and
other alternative instant messaging services, coupled with the
ICTA’s 20% ceiling price decrease on SMS, which came into effect
on 1 January 2014
-
20.7% increase in mobile services revenues with our increased
efforts to promote these services
-
10.5% increase in the revenues of subsidiaries to TRY711.4 million
(TRY644.0 million) comprising 22.9% (22.3%) of the Group top line.
-
28.1% increase in Turkcell Superonline revenues to TRY335.8
million (TRY262.1 million)
-
27.9% decline in Astelit’s revenues to TRY167.1 million (TRY231.9
million)
For the full year, revenues grew by 5.6% to TRY12,043.6 million
(TRY11,407.9 million) driven by:
-
2.7% increase in mobile business revenues in Turkey to TRY9,369.5
million (TRY9,123.1 million). Excluding MTR cut impact, mobile
business revenues in Turkey would have increased by 5%.
-
34.4% rise in mobile broadband revenues to TRY1,930.6 million
(TRY1,436.7 million) with increased smartphone penetration of 10
percentage points in a year, a higher number of mobile broadband
users and increased data usage
-
23.0% fall in SMS revenues due to the declining usage trend
impacted by the increasing adoption of OTT and alternative
messaging services, coupled with the ICTA’s 20% ceiling price
decrease on SMS
-
5.3% growth in mobile services revenues
-
17.0% rise in the revenues of subsidiaries to TRY2,674.1 million
(TRY2,284.7 million) constituting 22.2% (20.0%) of the Group top line.
-
35.4% growth in Turkcell Superonline revenues to TRY1,252.5
million (TRY925.2 million)
-
12.0% decrease in Astelit’s revenues to TRY758.2 million (TRY861.6
million)
Direct cost of revenues* rose by 6.5% to TRY1,972.2 million
(TRY1,851.3 million) in Q414, while as a percentage of revenues
declining to 63.6% (64.2%) driven by the decrease in depreciation and
amortization expenses and other various cost items, more than offsetting
the increase in operational expenses of certain subsidiaries.
For the full year, direct cost of revenues grew by 4.5% to TRY7,383.9
million (TRY7,063.9 million), while as a percentage of revenues
decreasing to 61.3% (61.9%). This decrease was led by the lower
interconnect costs of Turkcell Turkey and decrease in various other cost
items as opposed to the rise in the operational expenses of certain
subsidiaries.
The table below presents the interconnect revenues and costs of Turkcell
Turkey:
|
Million TRY
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
y/y %
|
|
FY13
|
|
FY14
|
|
y/y %
|
|
Interconnect revenues
|
|
253.2
|
|
281.3
|
|
11.1%
|
|
1,171.3
|
|
1,116.5
|
|
(4.7%)
|
|
as a % of revenues
|
|
11.3%
|
|
11.8%
|
|
0.5pp
|
|
12.8%
|
|
11.9%
|
|
(0.9pp)
|
|
Interconnect costs
|
|
(238.6)
|
|
(267.1)
|
|
11.9%
|
|
(1,118.3)
|
|
(1,049.7)
|
|
(6.1%)
|
|
as a % of revenues
|
|
(10.7%)
|
|
(11.2%)
|
|
(0.5pp)
|
|
(12.3%)
|
|
(11.2%)
|
|
1.1pp
|
Administrative expenses as a percentage of revenues declined
0.6pp to 4.7% (5.3%) in Q414, mainly due to lower bad debt expenses
(0.4pp) and other cost items (0.2pp). For the full year, administrative
expenses as a percentage of revenues decreased by 0.1pp to 4.7% (4.8%).
*In 2013, the direct cost of revenues included a total tax expense of
TRY34 million regarding the ICTA decision dated September 26, 2012
enabling users of mobile lines without subscription to register those
lines under their names at no charge.
Selling and marketing expenses as a percentage of revenues fell
by 1.0pp to 16.7% (17.7%) in Q414, mainly driven by the decrease in
selling expenses (0.6pp), marketing expenses (0.3pp) and other cost
items (0.1pp).
For the full year, selling and marketing expenses as a percentage of
revenues increased to 16.4% (16.2%) driven by the increase in selling
expenses (0.2pp) and other cost items (0.4pp) more than offsetting the
decline in marketing expenses (0.4pp).
EBITDA* rose by 7.7% to TRY917.1 million (TRY851.5 million),
while the EBITDA margin was at 29.6% (29.5%) in Q414. The decrease in
selling and marketing expenses by 1.0pp and administrative expenses by
0.6pp was offset by the increase in direct cost of revenues (excluding
depreciation and amortization) by 1.5pp as a percentage of revenues.
For the full year, EBITDA rose to TRY3,761.8 million (TRY3,544.5
million) on 6.1% growth, while the EBITDA margin stood at 31.2% (31.1%).
The 0.2pp decrease in direct cost of revenues (excluding depreciation
and amortization) and in administrative expenses by 0.1pp was offset by
the 0.2pp increase in selling and marketing expenses as a percentage of
revenues.
The EBITDA of subsidiaries grew by 8.3% to TRY196.0 million (TRY181.0
million) in Q414. For the full year, the EBITDA of subsidiaries rose by
17.6% to TRY 837.5 million (TRY712.1 million).
Net finance expense of TRY176.9 million (net finance income of
TRY149.7 million) was recorded in Q414, mainly due to the increase in
translation losses to TRY383 million (TRY59.0 million).
For the full year, Turkcell Group recorded a net finance expense of
TRY291.6 million (net finance income of TRY555.3 million) due to higher
translation losses of TRY1,110.8 million (TRY75.6 million), partially
offset by higher interest income earned on time deposits.
The table below presents translation loss details:
|
Million TRY
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
y/y %
|
|
FY13
|
|
FY14
|
|
y/y %
|
|
Turkcell Turkey
|
|
21.9
|
|
72.9
|
|
232.9%
|
|
139.1
|
|
225.8
|
|
62.3%
|
|
Turkcell Superonline
|
|
(18.4)
|
|
(6.3)
|
|
(65.8%)
|
|
(59.2)
|
|
(38.2)
|
|
(35.5%)
|
|
Astelit
|
|
(2.3)
|
|
(294.9)
|
|
n.m.
|
|
(7.6)
|
|
(991.2)
|
|
n.m.
|
|
Best
|
|
(58.9)
|
|
(149.6)
|
|
154.0%
|
|
(123.6)
|
|
(294.5)
|
|
138.3%
|
|
Other
|
|
(1.3)
|
|
(5.1)
|
|
292.3%
|
|
(24.3)
|
|
(12.7)
|
|
(47.7%)
|
|
Turkcell Group
|
|
(59.0)
|
|
(383.0)
|
|
549.2%
|
|
(75.6)
|
|
(1,110.8)
|
|
n.m.
|
The share of profit of equity accounted investees was a loss of
TRY6.9 million (income of TRY75.8 million), mainly due to non-cash
impairment charges of US$88 million recorded by Fintur in relation to
goodwill and fixed assets in Q414. The impact of this on our Group
financials was TRY83 million on the basis of our 41.45% share of Fintur.
For the full year, our share in the net income of unconsolidated
investees fell by 30.3% to TRY207.3 million (TRY297.3 million) impacted
mainly by non-cash charges of US$125 million in Fintur, stemming from
write down of operational assets and impairment charges relating to
goodwill and fixed assets. These charges negatively impacted our Group
financials by TRY116 million on the basis of our 41.45% share in
Fintur.(*)EBITDA is a non-GAAP financial measure. See page 16 for the
reconciliation of EBITDA to net cash from operating activities
Income tax expense details for Q414 and FY14 are presented in the
table below:
|
Million TRY
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
y/y %
|
|
FY13
|
|
FY14
|
|
y/y %
|
|
Current Tax expense
|
|
(166.7)
|
|
(170.3)
|
|
2.2%
|
|
(650.5)
|
|
(709.4)
|
|
9.1%
|
|
Deferred Tax Income/expense
|
|
47.2
|
|
(17.0)
|
|
(136.0%)
|
|
59.1
|
|
(21.0)
|
|
(135.5%)
|
|
Income Tax expense
|
|
(119.5)
|
|
(187.3)
|
|
56.7%
|
|
(591.4)
|
|
(730.4)
|
|
23.5%
|
Net income fell by 48.9% to TRY257.9 million (TRY504.9 million)
in Q414. Net income was negatively impacted by the devaluation of UAH
against US$ in Ukraine and BYR against US$ in Belarus, non-cash
impairment charges incurred by Fintur, decrease in monetary gain and a
higher tax expense. Net income was impacted by several one-off items
both in Q413 and Q414. Excluding one-off items, net income in Q414 would
be TRY390 million (TRY630 million in Q413).
For the full year, net income declined by 19.8% to TRY1,864.7 million
(TRY2,325.9 million). This was mainly driven by devaluation in Ukraine
and Belarus, the impact of non-cash impairment charges incurred by
Fintur and a higher tax expense. Excluding one-off items, net income in
FY14 would be TRY2,135 million (TRY2,511 million in FY13).
|
Net income impacts (million TRY)
|
|
Q413
|
|
FY13
|
|
Net income impacts (million TRY)
|
|
Q414
|
|
FY14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income excluding one-offs*
|
|
630
|
|
2,511
|
|
Net income excluding one-offs*
|
|
390
|
|
2,135
|
|
BeST impairment
|
|
(61)
|
|
(61)
|
|
Best impairment
|
|
(35)
|
|
(35)
|
|
ICTA Decision Regarding a Tariff**
|
|
(41)
|
|
(41)
|
|
Fintur impact
|
|
(83)
|
|
(116)
|
|
Other impacts
|
|
(23)
|
|
(83)
|
|
A-Tel Share Sale impact
|
|
-
|
|
24
|
|
|
|
|
|
|
|
Reimbursements**
|
|
(8)
|
|
(29)
|
|
|
|
|
|
|
|
ICTA penalties**
|
|
(2)
|
|
(108)
|
|
|
|
|
|
|
|
Other impacts
|
|
(4)
|
|
(6)
|
|
Net income reported
|
|
505
|
|
2,326
|
|
Net income reported
|
|
258
|
|
1,865
|
* Net income excluding one-off impacts is a presentation of our
net income, adjusted to exclude certain items that we consider to be
exceptional. However, it should not be relied upon as comparable to
reported net income prepared in accordance with the IFRS that we apply.
Although we expect that the specific items represented in this
adjustment are non-recurring, no assurance can be given that this will
be the case and that we will not be affected by similar items in the
future.
** For details, please refer to consolidated financial
statements and notes as at and for the years ended December 31, 2013 and
December 31, 2014 under the note 34 which can be accessed via our
website.
In Q413 and FY13, other impacts mainly comprised impairment charges,
regulatory penalties and the tax expense regarding the ICTA decision as
explained at the footnote of direct cost of revenues section.
Total debt as of December 31, 2014 was at TRY3,697.7 million
(US$1,594.6 million), compared to TRY3,545.0 million (US$1,555.6
million) as of September 30, 2014 in consolidated terms. The debt
balance of Ukraine (including intra-group debt) was TRY1,580.3 million
(US$681.5 million), Belarus was TRY1,540.3 million (US$664.2 million)
and Turkcell Superonline was TRY737.0 million (US$317.8 million).
TRY2,890.9 million (US$1,246.7 million) of our consolidated debt is at a
floating rate, while TRY2,449.8 million (US$1,056.5 million) will mature
within less than a year. As of December 31, 2014, our debt/annual EBITDA
ratio in TRY terms was 98%. (Please note that the figures in
parentheses refer to US$ equivalents).
Cash flow analysis: Capital expenditures, including
non-operational items in Q414, amounted to TRY935.3 million, of which
TRY593.7 million was related to Turkcell Turkey, TRY254.4 million to
Turkcell Superonline, TRY37.7 million to Astelit and TRY15.6 million to
BeST. The cash flow item noted as “other” included cash inflows mainly
relating to the effects of foreign exchange rate valuations on cash and
cash equivalents and cash outflows due to corporate tax payment and the
change in net working capital.
For the full year, capital expenditures including non-operational items
were at TRY2,144.8 million, of which TRY1,361.6 million was related to
Turkcell Turkey, TRY552.8 million to Turkcell Superonline, TRY101.3
million to Astelit and TRY35.4 million to BeST. The cash flow item noted
as “other” mainly comprised cash inflow related to dividends from Fintur
and cash outflows due to corporate tax payment and the change in net
working capital.
In 2014, operational capex as a percentage of revenues realized at
around 17%.
|
Consolidated Cash Flow (million TRY)
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
FY13
|
|
FY14
|
|
EBITDA1
|
|
851.5
|
|
917.1
|
|
3,544.5
|
|
3,761.8
|
|
LESS:
|
|
|
|
|
|
|
|
|
|
Capex and License
|
|
(818.5)
|
|
(935.3)
|
|
(1,822.3)
|
|
(2,144.8)
|
|
Turkcell
|
|
(500.2)
|
|
(593.7)
|
|
(1,057.8)
|
|
(1,361.6)
|
|
Turkcell Superonline
|
|
(172.1)
|
|
(254.4)
|
|
(399.1)
|
|
(552.8)
|
|
Ukraine2
|
|
(61.2)
|
|
(37.7)
|
|
(144.6)
|
|
(101.3)
|
|
Net interest Income/ (expense)
|
|
208.7
|
|
206.1
|
|
630.9
|
|
819.3
|
|
Other
|
|
199.1
|
|
57.8
|
|
(995.2)
|
|
(1,633.8)
|
|
Net Change in Debt
|
|
(15.2)
|
|
94.2
|
|
(227.9)
|
|
100.5
|
|
Cash generated / (used)
|
|
425.6
|
|
339.9
|
|
1,130.0
|
|
903.0
|
|
Cash balance
|
|
8,128.9
|
|
9,031.9
|
|
8,128.9
|
|
9,031.9
|
(1) EBITDA is a non-GAAP financial measurement. See page 16 for the
reconciliation of EBITDA to net cash from operating activities.
(2)
The appreciation of reporting currency (TRY) against US$ is included in
this line.
Operational Review in Turkey
|
Summary of Operational Data
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
y/y%
|
|
FY13
|
|
FY14
|
|
y/y%
|
|
Number of total subscribers (million)
|
|
35.2
|
|
34.6
|
|
(1.7%)
|
|
35.2
|
|
34.6
|
|
(1.7%)
|
|
Postpaid
|
|
14.0
|
|
15.2
|
|
8.6%
|
|
14.0
|
|
15.2
|
|
8.6%
|
|
Prepaid
|
|
21.2
|
|
19.4
|
|
(8.5%)
|
|
21.2
|
|
19.4
|
|
(8.5%)
|
|
ARPU(Average Monthly Revenue per User), blended (TRY)
|
|
21.3
|
|
23.0
|
|
8.0%
|
|
21.7
|
|
22.5
|
|
3.7%
|
|
Postpaid
|
|
36.5
|
|
38.0
|
|
4.1%
|
|
37.3
|
|
37.7
|
|
1.1%
|
|
Prepaid
|
|
11.3
|
|
11.6
|
|
2.7%
|
|
11.8
|
|
11.6
|
|
(1.7%)
|
|
ARPU, blended (US$)
|
|
10.5
|
|
10.3
|
|
(1.9%)
|
|
11.4
|
|
11.2
|
|
(1.8%)
|
|
Postpaid
|
|
18.0
|
|
17.0
|
|
(5.6%)
|
|
19.6
|
|
18.8
|
|
(4.1%)
|
|
Prepaid
|
|
5.6
|
|
5.2
|
|
(7.1%)
|
|
6.2
|
|
5.8
|
|
(6.5%)
|
|
Churn (%)
|
|
6.7%
|
|
7.7%
|
|
1.0pp
|
|
27.4%
|
|
28.3%
|
|
0.9pp
|
|
MOU (Average Monthly Minutes of Usage per Subscriber), blended
|
|
257.5
|
|
279.3
|
|
8.5%
|
|
259.3
|
|
275.3
|
|
6.2%
|
Subscribers of Turkcell Turkey declined by 548 thousand (98
thousand net losses in Q414) to 34.6 million in 2014 due to losses in
the more price-sensitive prepaid segment in the ongoing aggressive
competitive environment. Meanwhile, we expanded our postpaid subscriber
base by 1.2 million net additions during the year, mainly through pre to
post switches and superior network quality. Consequently, our postpaid
subscriber share in total subscriber base has improved to 43.9% (39.8%).
Churn Rate refers to voluntarily and involuntarily disconnected
subscribers. Our churn rate increased by 1.0pp to 7.7% in Q414, and by
0.9pp to 28.3%* for the full year, primarily impacted by the increased
competition in the market.
ARPU rose by 8.0% to TRY23.0 (TRY21.3) in Q414 on the back of
higher mobile broadband usage and increased postpaid customer base. For
the full year, ARPU grew by 3.7% to TRY22.5 (TRY21.7) driven by the same
factors.
MoU rose by 8.5% to 279.3 minutes in Q414 and by 6.2% to 275.3
minutes in 2014. This increase in MoU was led by higher incentives and
higher package utilization.
OTHER DOMESTIC AND INTERNATIONAL OPERATIONS
Astelit’s financial performance has been adversely impacted by
the unfavorable political and macroeconomic environment in Ukraine
throughout the year. The local currency devaluation, which has reached
97% for the full year, led Astelit’s contribution to Group revenue to
contract in 2014 and also caused significant FX losses at the Group
level. In 2015, the local currency devaluation exceeded 60% year-to-date.
Astelit
recorded 15% revenue growth in local currency in the fourth quarter,
while in TL terms, registering a decline of 27.9% to TRY167.1 million
(TRY231.9 million). EBITDA declined 30.4% to TRY49.7 million (TRY71.4
million) with an EBITDA margin of 29.7% (30.8%). For the full year,
local currency revenue growth was at 13%, whereas, in TL terms, there
was a decrease of 12.0% to TRY758.2 million (TRY861.6 million). With the
11.7% decline in EBITDA to TRY232.2 million (TRY262.9 million), Astelit
maintained its EBITDA margin at 30.6% (30.5%) in 2014.
On the
operational front, Astelit recorded 1.1 million net additions throughout
the year, increasing its three-month active subscriber base to 10.3
million. Blended ARPU (3-month active) rose by 1.2% to UAH33.3 (UAH32.9)
in Q414 and remained almost flat at UAH34.5 (UAH34.4) for the full year.
The MoU (12-months active) fell by 5.3% to 162.8 minutes (172.0 minutes)
in Q414, and by 6.9% to 166.7 minutes (179.0 minutes) in the full year,
due to changing consumer behavior as a result of tough macroeconomic
conditions.
(*) Churn rate in FY13 was impacted by the ICTA decision enabling users
of mobile lines without a subscription to register those lines
undertheir names. Each subscription line registered due to this decision
had to be recorded as a churn, and also as an acquisition in
operators’records. Excluding the impact of this decision, the churn rate
would have been 26.4% in 2013.
Ukraine has been facing political tension since early 2014. As a result,
in Crimea, which constituted 3% of Astelit’s revenues in 2014,
operations have been discontinued starting from Q414 for reasons beyond
its control, and are unlikely to be resumed in the near future. As of
December 31, 2014, Astelit’s non-current assets in Crimea were fully
depreciated to their scrap value. Yet, despite occasional network
disruptions in the Donetsk and Luhansk regions, Astelit has continued
its operations to date without major incident.
We continue to believe in the potential of the Ukrainian mobile market
and remain committed to our operations in that country. On January 15,
2015, we announced Astelit’s application to participate in the 3G
license tender. In compliance with the 3G tender conditions, Astelit
paid tender guarantees of UAH270 million for each three lots, totaling
UAH810 million, on February 10, 2015. Introduction of 3G technology is
expected to open a new chapter in Ukraine’s telecommunication industry,
and we are excited to extend the expertise we have developed in our home
market to this arena.
|
Astelit*
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
y/y%
|
|
FY13
|
|
FY14
|
|
y/y%
|
|
Number of subscribers (million)1
|
|
12.6
|
|
13.9
|
|
10.3%
|
|
12.6
|
|
13.9
|
|
10.3%
|
|
Active (3 months)2
|
|
9.2
|
|
10.3
|
|
12.0%
|
|
9.2
|
|
10.3
|
|
12.0%
|
|
MOU (minutes) (12 months)
|
|
172.0
|
|
162.8
|
|
(5.3%)
|
|
179.0
|
|
166.7
|
|
(6.9%)
|
|
ARPU (Average Monthly Revenue per User), blended (US$)
|
|
3.1
|
|
1.8
|
|
(41.9%)
|
|
3.2
|
|
2.2
|
|
(31.3%)
|
|
Active (3 months) (US$)
|
|
4.1
|
|
2.4
|
|
(41.5%)
|
|
4.3
|
|
3.0
|
|
(30.2%)
|
|
Active (3 months) (UAH)
|
|
32.9
|
|
33.3
|
|
1.2%
|
|
34.4
|
|
34.5
|
|
0.3%
|
|
Revenue (million UAH)
|
|
912.8
|
|
1,046.7
|
|
14.7%
|
|
3,595.2
|
|
4,051.7
|
|
12.7%
|
|
Revenue (million TRY)
|
|
231.9
|
|
167.1
|
|
(27.9%)
|
|
861.6
|
|
758.2
|
|
(12.0%)
|
|
Revenue (million US$)
|
|
114.2
|
|
74.5
|
|
(34.8%)
|
|
449.8
|
|
347.2
|
|
(22.8%)
|
|
EBITDA (million UAH)
|
|
281.0
|
|
310.4
|
|
10.5%
|
|
1,096.0
|
|
1,237.3
|
|
12.9%
|
|
EBITDA (million TRY)
|
|
71.4
|
|
49.7
|
|
(30.4%)
|
|
262.9
|
|
232.2
|
|
(11.7%)
|
|
EBITDA (million US$)3
|
|
35.2
|
|
22.2
|
|
(36.9%)
|
|
137.1
|
|
106.3
|
|
(22.5%)
|
|
EBITDA margin
|
|
30.8%
|
|
29.7%
|
|
(1.1pp)
|
|
30.5%
|
|
30.6%
|
|
0.1pp
|
|
Net loss (million UAH)
|
|
(19.1)
|
|
(2,078.7)
|
|
n.m.
|
|
(261.5)
|
|
(5,593.2)
|
|
n.m.
|
|
Net loss (million TRY)
|
|
(4.9)
|
|
(323.2)
|
|
n.m.
|
|
(60.7)
|
|
(1,066.9)
|
|
n.m.
|
|
Net loss (million US$)
|
|
(2.4)
|
|
(145.0)
|
|
n.m.
|
|
(32.7)
|
|
(484.3)
|
|
n.m.
|
|
Capex (million UAH)
|
|
213.9
|
|
327.2
|
|
53.0%
|
|
541.5
|
|
688.9
|
|
27.2%
|
|
Capex (million TRY)
|
|
61.2
|
|
37.7
|
|
(38.4%)
|
|
144.6
|
|
101.3
|
|
(29.9%)
|
|
Capex (million US$)
|
|
26.8
|
|
15.8
|
|
(41.0%)
|
|
67.8
|
|
43.7
|
|
(35.5%)
|
(*) Astelit, in which we hold a 55% stake through Euroasia, has operated
in Ukraine since February 2005.
(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.
(3) EBITDA is
a non-GAAP financial measurement. See page 16 for the reconciliation of
Euroasia’s EBITDA to net cash from operating activities. Euroasia holds
a 100% stake in Astelit.
Turkcell Superonline resumed its solid financial and operational
performance on 28.1% revenue growth and a 34.2% EBITDA rise in Q414. The
EBITDA margin improved 1.2pp to 25.6% (24.4%), mainly with the
increasing scale of the business.
In Q414, the share of residential and corporate segment revenues in
total revenues reached 71% (64%) following the 52.8% and 27.4% growth of
residential and corporate segment revenues, respectively. Meanwhile, the
share of non-group revenues reached 78% (74%).
For the full year, growth momentum continued with a revenue rise of
35.4% and EBITDA increase of 37.6%. The EBITDA margin reached 26.1%
(25.7%) on a 0.4pp improvement. Residential segment revenues grew by
53.2%, while the corporate segment revenues grew by 32.2%. Accordingly,
the share of residential and corporate business in total revenues rose
to 67% (63%). The share of non-group revenues increased to 77% (74%).
Turkcell Superonline’s total subscriber base (including ADSL
subscribers) reached 1.2 million on the back of 346 thousand net
additions in 2014. FTTH subscriber base1 increased to 735
thousand with a 165 thousand net increase for the full year. By the end
of 2014, Turkcell Superonline has become the market leader in terms of
number of total FTTH subscribers in Turkey.
Turkcell Superonline has continued to invest in its fiber network,
increasing home passes2 by 380 thousand in 2014 to 2.1
million. Furthermore, capitalizing on its network, Turkcell Superonline
has strengthened its product offering with the addition of the TV
platform, Turkcell TV+.
In 2015, we expect Turkcell Superonline to continue its growth momentum
by expanding its subscriber base, increasing its home passes2
with further capital expenditure in its infrastructure.
Moreover, we expect that the arrival of the new 4G era will bring
additional synergies between our mobile and fiber businesses, and
strengthen Turkcell Superonline’s already successful business model.
|
Turkcell Superonline* (million TRY)
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
y/y%
|
|
FY13
|
|
FY14
|
|
y/y%
|
|
Revenue
|
|
262.1
|
|
335.8
|
|
28.1%
|
|
925.2
|
|
1,252.5
|
|
35.4%
|
|
Residential
|
|
94.4
|
|
144.2
|
|
52.8%
|
|
329.6
|
|
504.9
|
|
53.2%
|
|
% of revenues
|
|
36.0%
|
|
42.9%
|
|
6.9pp
|
|
35.6%
|
|
40.3%
|
|
4.7pp
|
|
Corporate
|
|
73.7
|
|
93.9
|
|
27.4%
|
|
253.4
|
|
335.1
|
|
32.2%
|
|
% of revenues
|
|
28.1%
|
|
28.0%
|
|
(0.1pp)
|
|
27.4%
|
|
26.8%
|
|
(0.6pp)
|
|
Wholesale
|
|
94.0
|
|
97.7
|
|
3.9%
|
|
342.3
|
|
412.5
|
|
20.5%
|
|
% of revenues
|
|
35.9%
|
|
29.1%
|
|
(6.8pp)
|
|
37.0%
|
|
32.9%
|
|
(4.1pp)
|
|
EBITDA 3
|
|
64.1
|
|
86.0
|
|
34.2%
|
|
237.8
|
|
327.1
|
|
37.6%
|
|
EBITDA Margin
|
|
24.4%
|
|
25.6%
|
|
1.2pp
|
|
25.7%
|
|
26.1%
|
|
0.4pp
|
|
Capex
|
|
172.1
|
|
254.4
|
|
47.8%
|
|
399.1
|
|
552.8
|
|
38.5%
|
|
FTTH subscribers
|
|
570.0
|
|
735.1
|
|
29.0%
|
|
570.0
|
|
735.1
|
|
29.0%
|
(*)Turkcell Superonline is our wholly-owned subsidiary, providing fiber
broadband.
(1) FTTH subscriber base refers to residential,
corporate and wholesale fiber subscribers.
(2) Home passes figure
refers to the total of home passes and office passes figures.
(3)EBITDA
is a non-GAAP financial measure. See page 16 for the reconciliation of
EBITDA to net cash from operating activities.
Fintur subscriber base declined 0.7 million during the year,
resulting from Kcell’s subscriber decline, mainly due to clean-up of
subscribers. Fintur’s consolidated revenues declined by 19.7% to US$423
million (US$527 million) in Q414, driven mainly by decrease in Kcell
revenues resulting from devaluation of the Kazakhstani Tenge (KZT)
against the US$. For the full year, revenues fell by 11.5% to US$1,801
million (US$2,036 million) mainly due to the same factors.
Fintur had a negative impact of US$3 million (US$37 million
contribution) on our net income in Q414 driven mainly by non-cash
impairment charges at Fintur as discussed on page 8. Fintur’s
contribution to Turkcell’s net income declined by 39.1% to US$95 million
(US$156 million) in 2014 due to non-cash charges as explained on page 8.
|
Fintur*
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
y/y%
|
|
FY13
|
|
FY14
|
|
y/y%
|
|
Subscribers (million)
|
|
21.5
|
|
20.8
|
|
(3.3%)
|
|
21.5
|
|
20.8
|
|
(3.3%)
|
|
Kazakhstan
|
|
14.3
|
|
13.0
|
|
(9.1%)
|
|
14.3
|
|
13.0
|
|
(9.1%)
|
|
Azerbaijan
|
|
4.4
|
|
4.6
|
|
4.5%
|
|
4.4
|
|
4.6
|
|
4.5%
|
|
Moldova
|
|
1.0
|
|
1.1
|
|
10.0%
|
|
1.0
|
|
1.1
|
|
10.0%
|
|
Georgia
|
|
1.8
|
|
2.1
|
|
16.7%
|
|
1.8
|
|
2.1
|
|
16.7%
|
|
Revenue (million US$)
|
|
527
|
|
423
|
|
(19.7%)
|
|
2,036
|
|
1,801
|
|
(11.5%)
|
|
Kazakhstan
|
|
322
|
|
248
|
|
(23.0%)
|
|
1,233
|
|
1,052
|
|
(14.7%)
|
|
Azerbaijan
|
|
151
|
|
127
|
|
(15.9%)
|
|
584
|
|
549
|
|
(6.0%)
|
|
Moldova
|
|
20
|
|
17
|
|
(15.0%)
|
|
79
|
|
72
|
|
(8.9%)
|
|
Georgia
|
|
35
|
|
31
|
|
(11.4%)
|
|
140
|
|
128
|
|
(8.6%)
|
|
Fintur’s contribution to Group’s net income (million US$)
|
|
37
|
|
(3)
|
|
(108.1%)
|
|
156
|
|
95
|
|
(39.1%)
|
(*) We hold a 41.45% stake In Fintur, which has interests in Kazakhstan,
Azerbaijan, Moldova, and Georgia.
Turkcell Group Subscribers amounted to approximately 71.5
million as of December 31, 2014. This figure is calculated by taking the
number of subscribers of Turkcell and each of our subsidiaries and
unconsolidated investees. It includes the total number of mobile
subscribers of Turkcell Turkey, Astelit and BeST, as well as of our
operations in the Turkish Republic of Northern Cyprus (“Northern
Cyprus”), Fintur and Turkcell Europe. Turkcell Group subscribers rose by
0.2 million year-on-year mainly driven by the increase in subscriber
base of Astelit.
|
Turkcell Group Subscribers (million)
|
|
2013
|
|
2014
|
|
y/y %
|
|
Turkcell Turkey
|
|
35.2
|
|
34.6
|
|
(1.7%)
|
|
Ukraine
|
|
12.6
|
|
13.9
|
|
10.3%
|
|
Fintur
|
|
21.5
|
|
20.8
|
|
(3.3%)
|
|
Northern Cyprus
|
|
0.4
|
|
0.4
|
|
-
|
|
Belarus
|
|
1.2
|
|
1.4
|
|
16.7%
|
|
Turkcell Europe1
|
|
0.4
|
|
0.4
|
|
-
|
|
TURKCELL GROUP
|
|
71.3
|
|
71.5
|
|
0.3%
|
1: The “wholesale traffic purchase” agreement, signed between Turkcell
Europe GmbH operating in Germany and Deutsche Telekom for five years in
2010, had been modified to reflect the shift in business model to a
“marketing partnership”. The new agreement between Turkcell and a
subsidiary of Deutsche Telekom was signed on August 27, 2014. The
transfer of Turkcell Europe subscribers and operations to Deutsche
Telekom’s subsidiary was completed on January 15, 2015.
OVERVIEW OF THE MACROECONOMIC ENVIRONMENT
The foreign exchange rates that have been used in our financial
reporting, along with certain macroeconomic indicators, are set out
below.
|
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
y/y%
|
|
FY13
|
|
FY14
|
|
y/y%
|
|
TRY / US$ rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing Rate
|
|
2.1343
|
|
2.3189
|
|
8.6%
|
|
2.1343
|
|
2.3189
|
|
8.6%
|
|
Average Rate
|
|
2.0302
|
|
2.2421
|
|
10.4%
|
|
1.9094
|
|
2.1850
|
|
14.4%
|
|
Consumer Price Index (Turkey)
|
|
2.3%
|
|
1.6%
|
|
(0.7pp)
|
|
7.4%
|
|
8.2%
|
|
0.8pp
|
|
GDP Growth (Turkey)
|
|
4.5%
|
|
n.a.
|
|
n.a.
|
|
4.1%
|
|
n.a.
|
|
n.a.
|
|
UAH/ US$ rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing Rate
|
|
7.99
|
|
15.77
|
|
97.4%
|
|
7.99
|
|
15.77
|
|
97.4%
|
|
Average Rate
|
|
7.99
|
|
14.09
|
|
76.3%
|
|
7.99
|
|
11.87
|
|
48.6%
|
|
BYR/ US$ rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing Rate
|
|
9,510
|
|
11,850
|
|
24.6%
|
|
9,510
|
|
11,850
|
|
24.6%
|
|
Average Rate
|
|
9,282
|
|
10,912
|
|
17.6%
|
|
8,883
|
|
10,255
|
|
15.4%
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We believe
that EBITDA is a measurement commonly used by companies, analysts and
investors in the telecommunications industry that enhances the
understanding of our cash generation ability and liquidity position, and
assists in the evaluation of our capacity to meet our financial
obligations. We also use EBITDA as an internal measurement tool, and
accordingly, we believe that its presentation provides useful and
relevant information to analysts and investors. Our 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). EBITDA is not a measure of financial performance
under IFRS, and should not be construed as a substitute for net earnings
(loss) as a measure of performance, or cash flow from operations as a
measure of liquidity. The following table provides a reconciliation of
EBITDA, which is a non-GAAP financial measurement, to net cash from
operating activities, which we believe is the most directly comparable
financial measurement calculated and presented in accordance with IFRS.
|
Turkcell Group (million US$)
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
y/y%
|
|
FY13
|
|
FY14
|
|
y/y%
|
|
EBITDA
|
|
420.4
|
|
409.1
|
|
(2.7%)
|
|
1,858.0
|
|
1,725.2
|
|
(7.1%)
|
|
Income tax expense
|
|
(59.4)
|
|
(83.5)
|
|
40.6%
|
|
(310.7)
|
|
(334.6)
|
|
7.7%
|
|
Other operating income / (expense)
|
|
(16.9)
|
|
(1.3)
|
|
(92.3%)
|
|
(29.2)
|
|
(40.3)
|
|
38.0%
|
|
Financial income / (expense)
|
|
78.2
|
|
3.9
|
|
(95.0%)
|
|
299.9
|
|
17.8
|
|
(94.1%)
|
|
Net increase / (decrease) in assets and liabilities
|
|
26.5
|
|
14.9
|
|
(43.8%)
|
|
(824.0)
|
|
(566.3)
|
|
(31.3%)
|
|
Net cash from operating activities
|
|
448.8
|
|
343.1
|
|
(23.6%)
|
|
994.0
|
|
801.8
|
|
(19.3%)
|
|
Turkcell Superonline (million TRY)
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
y/y%
|
|
FY13
|
|
FY14
|
|
y/y%
|
|
EBITDA
|
|
64.1
|
|
86.0
|
|
34.2%
|
|
237.8
|
|
327.1
|
|
37.6%
|
|
Income tax expense
|
|
35.3
|
|
(8.6)
|
|
(124.4%)
|
|
38.4
|
|
(19.1)
|
|
(149.7%)
|
|
Other operating income / (expense)
|
|
2.7
|
|
0.9
|
|
(66.7%)
|
|
0.6
|
|
3.1
|
|
416.7%
|
|
Financial income / (expense)
|
|
(18.4)
|
|
(37.7)
|
|
104.9%
|
|
(63.7)
|
|
(57.8)
|
|
(9.3%)
|
|
Net increase / (decrease) in assets and liabilities
|
|
15.2
|
|
82.7
|
|
444.1%
|
|
(106.0)
|
|
48.0
|
|
(145.3%)
|
|
Net cash from operating activities
|
|
98.9
|
|
123.3
|
|
24.7%
|
|
107.1
|
|
301.3
|
|
181.3%
|
|
Euroasia (million US$)
|
|
Quarter
|
|
Year
|
|
|
Q413
|
|
Q414
|
|
y/y%
|
|
FY13
|
|
FY14
|
|
y/y%
|
|
EBITDA
|
|
35.2
|
|
22.2
|
|
(36.9%)
|
|
137.1
|
|
106.3
|
|
(22.5%)
|
|
Other operating income / (expense)
|
|
(0.2)
|
|
0.5
|
|
(350.0%)
|
|
1.1
|
|
1.0
|
|
(9.1%)
|
|
Financial income / (expense)
|
|
(9.0)
|
|
(13.8)
|
|
53.3%
|
|
(50.9)
|
|
(56.1)
|
|
10.2%
|
|
Net increase / (decrease) in assets and liabilities
|
|
(27.4)
|
|
15.5
|
|
(156.6%)
|
|
(10.9)
|
|
17.4
|
|
(259.6%)
|
|
Net cash from operating activities
|
|
(1.4)
|
|
24.4
|
|
n.m.
|
|
76.4
|
|
68.6
|
|
(10.2%)
|
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 2015 and our 4G and 3G development in
Turkey and Ukraine, respectively. 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 2013 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 the leading communications and
technology company in Turkey, with 34.6 million subscribers as of
December 31, 2014. Turkcell is a leading regional player with its
approximately 71.5 million subscribers in nine countries as of December
31, 2014. It was one of the first among the global operators to have
implemented HSPA+. It has announced two new HSPA+ Technologies on its 3G
network to meet rising data usage. Having successfully integrated
3C-HSDPA and DC-HSUPA Technologies, it became the first mobile operator
in the world to enable peak speed of 63.3 Mbps downlink while also
enabled an 11.5 Mbps uplink on a 3G network. Turkcell Superonline, a
wholly owned subsidiary of Turkcell, is the first telecom operator to
offer households fiber broadband connection at speeds of up to 1,000
Mbps in Turkey. As of December 2014, Turkcell’s population coverage is
at 99.81% in 2G and 91.21% in 3G. Turkcell reported a TRY12.0
billion (US$5.5 billion) revenue with total assets of TRY23.7 billion
(US$10.2 billion) as of December 31, 2014. 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.
|
|
|
TURKCELL ILETISIM HIZMETLERI A.S.
TURKISH ACCOUNTING STANDARDS SELECTED FINANCIALS (TRY Million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Quarter Ended
|
|
Quarter Ended
|
|
12 Months Ended
|
|
12 Months Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
2013
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Communication fees
|
|
2,545.3
|
|
2,757.5
|
|
2,631.9
|
|
10,242.8
|
|
10,437.2
|
|
Revenues from betting business
|
|
73.1
|
|
69.1
|
|
85.5
|
|
230.4
|
|
297.9
|
|
Monthly fixed fees
|
|
18.2
|
|
10.0
|
|
10.4
|
|
75.9
|
|
51.5
|
|
Simcard sales
|
|
7.2
|
|
11.9
|
|
6.3
|
|
29.8
|
|
31.7
|
|
Call center revenues and other revenues
|
|
239.8
|
|
313.7
|
|
369.1
|
|
829.0
|
|
1,225.3
|
|
Total revenues
|
|
2,883.6
|
|
3,162.2
|
|
3,103.2
|
|
11,407.9
|
|
12,043.6
|
|
Direct cost of revenues
|
|
-1,848.9
|
|
-1,879.0
|
|
-1,972.2
|
|
-7,058.9
|
|
-7,380.8
|
|
Gross profit
|
|
1,034.7
|
|
1,283.2
|
|
1,131.0
|
|
4,349.0
|
|
4,662.8
|
|
Administrative expenses
|
|
-152.0
|
|
-138.0
|
|
-146.8
|
|
-550.3
|
|
-562.7
|
|
Selling & marketing expenses
|
|
-510.4
|
|
-496.5
|
|
-517.8
|
|
-1,843.6
|
|
-1,974.6
|
|
Other Operating Income / (Expense)
|
|
35.3
|
|
424.0
|
|
269.4
|
|
907.9
|
|
1,053.6
|
|
Operating profit before financing and investing costs
|
|
407.6
|
|
1,072.7
|
|
735.8
|
|
2,863.0
|
|
3,179.1
|
|
Income from investing activities
|
|
8.9
|
|
1.7
|
|
5.4
|
|
30.2
|
|
20.0
|
|
Expense from investing activities
|
|
-15.3
|
|
-10.2
|
|
9.3
|
|
-58.1
|
|
-16.8
|
|
Share of profit of equity accounted investees
|
|
75.8
|
|
66.8
|
|
-6.9
|
|
297.3
|
|
207.3
|
|
Income before financing costs
|
|
477.0
|
|
1,131.0
|
|
743.6
|
|
3,132.4
|
|
3,389.6
|
|
Finance expense
|
|
85.1
|
|
-255.6
|
|
-459.8
|
|
-383.2
|
|
-1,424.9
|
|
Monetary gain/(loss)
|
|
72.5
|
|
48.3
|
|
32.3
|
|
176.9
|
|
205.1
|
|
Income before tax and non-controlling interest
|
|
634.6
|
|
923.7
|
|
316.1
|
|
2,926.1
|
|
2,169.8
|
|
Income tax expense
|
|
-120.0
|
|
-217.0
|
|
-187.1
|
|
-592.4
|
|
-731.1
|
|
Income before non-controlling interest
|
|
514.6
|
|
706.7
|
|
129.0
|
|
2,333.7
|
|
1,438.7
|
|
Non-controlling interest
|
|
-7.9
|
|
49.0
|
|
128.9
|
|
-3.4
|
|
428.2
|
|
Net income
|
|
506.7
|
|
755.7
|
|
257.9
|
|
2,330.3
|
|
1,866.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
|
|
0.23
|
|
0.34
|
|
0.12
|
|
1.06
|
|
0.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
35.9%
|
|
40.6%
|
|
36.4%
|
|
38.1%
|
|
38.7%
|
|
EBITDA(*)
|
|
851.5
|
|
1,050.4
|
|
917.1
|
|
3,544.5
|
|
3,761.8
|
|
Capital expenditures
|
|
818.5
|
|
555.1
|
|
935.3
|
|
1,822.3
|
|
2,144.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheet Data (at period end)
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
8,128.9
|
|
8,692.0
|
|
9,031.9
|
|
8,128.9
|
|
9,031.9
|
|
Total assets
|
|
21,255.6
|
|
22,673.4
|
|
23,668.3
|
|
21,255.6
|
|
23,668.3
|
|
Long term debt
|
|
1,528.5
|
|
1,101.3
|
|
1,247.9
|
|
1,528.5
|
|
1,247.9
|
|
Total debt
|
|
3,332.5
|
|
3,545.0
|
|
3,697.7
|
|
3,332.5
|
|
3,697.7
|
|
Total liabilities
|
|
6,544.8
|
|
6,472.5
|
|
6,979.5
|
|
6,544.8
|
|
6,979.5
|
|
Total shareholders’ equity / Net Assets
|
|
14,710.8
|
|
16,200.9
|
|
16,688.8
|
|
14,710.8
|
|
16,688.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* For further details, please refer to our consolidated financial
statements and notes as at 31 December 2014 on our web site.
|
|
|
|
TURKCELL ILETISIM HIZMETLERI A.S.
IFRS SELECTED FINANCIALS (TRY Million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Quarter Ended
|
|
Quarter Ended
|
|
12 Months Ended
|
|
12 Months Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
2013
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Communication fees
|
|
2,545.3
|
|
2,757.5
|
|
2,631.9
|
|
10,242.8
|
|
10,437.2
|
|
Revenues from betting business
|
|
73.1
|
|
69.1
|
|
85.5
|
|
230.4
|
|
297.9
|
|
Monthly fixed fees
|
|
18.2
|
|
10.0
|
|
10.4
|
|
75.9
|
|
51.5
|
|
Simcard sales
|
|
7.2
|
|
11.9
|
|
6.3
|
|
29.8
|
|
31.7
|
|
Call center revenues and other revenues
|
|
239.8
|
|
313.7
|
|
369.1
|
|
829.0
|
|
1,225.3
|
|
Total revenues
|
|
2,883.6
|
|
3,162.2
|
|
3,103.2
|
|
11,407.9
|
|
12,043.6
|
|
Direct cost of revenues
|
|
-1,851.3
|
|
-1,880.2
|
|
-1,972.2
|
|
-7,063.9
|
|
-7,383.9
|
|
Gross profit
|
|
1,032.3
|
|
1,282.0
|
|
1,131.0
|
|
4,344.0
|
|
4,659.7
|
|
Administrative expenses
|
|
-152.0
|
|
-138.0
|
|
-146.8
|
|
-550.3
|
|
-562.7
|
|
Selling & marketing expenses
|
|
-510.4
|
|
-496.5
|
|
-517.8
|
|
-1,843.6
|
|
-1,974.6
|
|
Other Operating Income / (Expense)
|
|
-35.6
|
|
17.8
|
|
1.4
|
|
-58.9
|
|
-76.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit before financing costs
|
|
334.3
|
|
665.3
|
|
467.8
|
|
1,891.2
|
|
2,046.1
|
|
Finance costs
|
|
-89.7
|
|
-83.7
|
|
-400.1
|
|
-204.6
|
|
-1,247.0
|
|
Finance income
|
|
239.4
|
|
225.7
|
|
223.2
|
|
759.9
|
|
955.4
|
|
Monetary gain/(loss)
|
|
72.5
|
|
48.3
|
|
32.3
|
|
176.9
|
|
205.1
|
|
Share of profit of equity accounted investees
|
|
75.8
|
|
66.8
|
|
-6.9
|
|
297.3
|
|
207.3
|
|
Income before taxes and minority interest
|
|
632.3
|
|
922.4
|
|
316.3
|
|
2,920.7
|
|
2,166.9
|
|
Income tax expense
|
|
-119.5
|
|
-216.4
|
|
-187.3
|
|
-591.4
|
|
-730.4
|
|
Income before minority interest
|
|
512.8
|
|
706.0
|
|
129.0
|
|
2,329.3
|
|
1,436.5
|
|
Non-controlling interests
|
|
-7.9
|
|
49.0
|
|
128.9
|
|
-3.4
|
|
428.2
|
|
Net income
|
|
504.9
|
|
755.0
|
|
257.9
|
|
2,325.9
|
|
1,864.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
|
|
0.23
|
|
0.34
|
|
0.12
|
|
1.06
|
|
0.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
35.8%
|
|
40.5%
|
|
36.4%
|
|
38.1%
|
|
38.7%
|
|
EBITDA(*)
|
|
851.5
|
|
1,050.4
|
|
917.1
|
|
3,544.5
|
|
3,761.8
|
|
Capital expenditures
|
|
818.5
|
|
555.1
|
|
935.3
|
|
1,822.3
|
|
2,144.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheet Data (at period end)
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
8,128.9
|
|
8,692.0
|
|
9,031.9
|
|
8,128.9
|
|
9,031.9
|
|
Total assets
|
|
21,284.6
|
|
22,699.3
|
|
23,694.2
|
|
21,284.6
|
|
23,694.2
|
|
Long term debt
|
|
1,528.5
|
|
1,101.3
|
|
1,247.9
|
|
1,528.5
|
|
1,247.9
|
|
Total debt
|
|
3,332.5
|
|
3,545.0
|
|
3,697.7
|
|
3,332.5
|
|
3,697.7
|
|
Total liabilities
|
|
6,549.5
|
|
6,476.3
|
|
6,983.6
|
|
6,549.5
|
|
6,983.6
|
|
Total shareholders’ equity / Net Assets
|
|
14,735.1
|
|
16,223.0
|
|
16,710.6
|
|
14,735.1
|
|
16,710.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* For further details, please refer to our consolidated financial
statements and notes as at 31 December 2014 on our web site.
|
|
|
|
TURKCELL ILETISIM HIZMETLERI A.S.
IFRS SELECTED FINANCIALS (US$ MILLION)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Quarter Ended
|
|
Quarter Ended
|
|
12 Months Ended
|
|
12 Months Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
2013
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Communication fees
|
|
1,252.0
|
|
1,280.6
|
|
1,172.7
|
|
5,369.0
|
|
4,779.3
|
|
Revenues from betting business
|
|
36.0
|
|
32.1
|
|
38.2
|
|
120.4
|
|
136.1
|
|
Monthly fixed fees
|
|
9.0
|
|
4.6
|
|
4.7
|
|
40.0
|
|
23.6
|
|
Simcard sales
|
|
3.6
|
|
5.6
|
|
2.8
|
|
15.6
|
|
14.6
|
|
Call center revenues and other revenues
|
|
117.0
|
|
144.7
|
|
164.2
|
|
430.4
|
|
559.3
|
|
Total revenues
|
|
1,417.6
|
|
1,467.6
|
|
1,382.6
|
|
5,975.4
|
|
5,512.9
|
|
Direct cost of revenues
|
|
-905.6
|
|
-870.4
|
|
-877.6
|
|
-3,693.3
|
|
-3,375.5
|
|
Gross profit
|
|
512.0
|
|
597.2
|
|
505.0
|
|
2,282.1
|
|
2,137.4
|
|
Administrative expenses
|
|
-74.3
|
|
-63.6
|
|
-65.2
|
|
-286.8
|
|
-256.8
|
|
Selling & marketing expenses
|
|
-250.7
|
|
-230.3
|
|
-230.7
|
|
-964.1
|
|
-903.1
|
|
Other Operating Income / (Expense)
|
|
-16.9
|
|
8.7
|
|
0.6
|
|
-29.2
|
|
-35.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit before financing costs
|
|
170.1
|
|
312.0
|
|
209.7
|
|
1,002.0
|
|
942.0
|
|
Finance expense
|
|
-39.1
|
|
-37.6
|
|
-175.4
|
|
-95.5
|
|
-559.3
|
|
Finance income
|
|
117.3
|
|
105.8
|
|
98.9
|
|
395.4
|
|
437.5
|
|
Monetary gain/(loss)
|
|
31.6
|
|
17.1
|
|
12.6
|
|
82.9
|
|
88.4
|
|
Share of profit of equity accounted investees
|
|
37.4
|
|
31.4
|
|
-2.7
|
|
155.4
|
|
96.6
|
|
Income before taxes and minority interest
|
|
317.3
|
|
428.7
|
|
143.1
|
|
1,540.2
|
|
1,005.2
|
|
Income tax expense
|
|
-59.4
|
|
-100.5
|
|
-83.5
|
|
-310.7
|
|
-334.6
|
|
Income before minority interest
|
|
257.9
|
|
328.2
|
|
59.6
|
|
1,229.5
|
|
670.6
|
|
Minority interest
|
|
-3.9
|
|
23.8
|
|
57.9
|
|
-1.3
|
|
194.3
|
|
Net income
|
|
254.0
|
|
352.0
|
|
117.5
|
|
1,228.2
|
|
864.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
|
|
0.12
|
|
0.16
|
|
0.05
|
|
0.56
|
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
36.1%
|
|
40.7%
|
|
36.5%
|
|
38.2%
|
|
38.8%
|
|
EBITDA(*)
|
|
420.4
|
|
489.1
|
|
409.1
|
|
1,858.0
|
|
1,725.2
|
|
Capital expenditures
|
|
360.3
|
|
222.5
|
|
394.2
|
|
853.8
|
|
924.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheet Data (at period end)
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
3,808.7
|
|
3,814.1
|
|
3,894.9
|
|
3,808.7
|
|
3,894.9
|
|
Total assets
|
|
9,972.6
|
|
9,960.6
|
|
10,217.9
|
|
9,972.6
|
|
10,217.9
|
|
Long term debt
|
|
716.2
|
|
483.3
|
|
538.1
|
|
716.2
|
|
538.1
|
|
Total debt
|
|
1,561.4
|
|
1,555.6
|
|
1,594.6
|
|
1,561.4
|
|
1,594.6
|
|
Total liabilities
|
|
3,068.7
|
|
2,841.8
|
|
3,011.6
|
|
3,068.7
|
|
3,011.6
|
|
Total equity
|
|
6,903.9
|
|
7,118.8
|
|
7,206.3
|
|
6,903.9
|
|
7,206.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Please refer to the notes on reconciliation of Non-GAAP Financial
measures on page 16
|
|
** For further details, please refer to our consolidated financial
statements and notes as at 31 December 2014 on our web site.
|
Copyright Business Wire 2015