Turkcell Iletisim Hizmetleri AS (IST:TCELL) Q3 2024 Earnings Call Highlights: Strong Revenue ...

In This Article:

  • Revenue: TRY40.2 billion, a 7% increase year-on-year.

  • EBITDA: TRY17.8 billion, a 10% increase, with a margin of 44.2%.

  • Net Income: TRY14.3 billion, including TRY3 billion from operations and proceeds from Ukraine asset sale.

  • Postpaid Subscribers: 515,000 new additions in Q3; postpaid customer share increased to 74%.

  • Mobile ARPU Growth: 6.9% year-on-year increase.

  • Residential Fiber ARPU Growth: 15% year-on-year increase.

  • Digital Business Services Revenue: TRY2.9 billion, with recurring service revenues up 18% year-on-year.

  • Techfin Segment Revenue: Paycell revenues grew by 20%; Financell revenue increased by 38%.

  • CapEx to Sales Ratio: 18.1% for Q3 2024.

  • Net Debt Position: Decreased to TRY9 billion, with a net leverage ratio of 0.1 times.

  • FX Position: Net long FX position of USD228 million.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Turkcell Iletisim Hizmetleri AS (IST:TCELL) reported a 7% increase in top-line revenue, reaching TRY40.2 billion, driven by strong ARPU growth and solid subscriber additions.

  • The company's EBITDA rose by 10% to TRY17.8 billion, delivering a robust EBITDA margin of 44.2%.

  • Turkcell successfully completed the divestment of its Ukraine assets, contributing to a net income of TRY14.3 billion.

  • The Techfin segment showed strong performance with Paycell revenues growing by 20%, driven by increased commissions and transaction volumes.

  • Turkcell's strategic focus on fiber subscribers resulted in 47,000 net additions, with residential fiber ARPU growing by 15% year-on-year.

Negative Points

  • Turkcell faced aggressive pricing in the mobile market, leading to a 25% price adjustment in July and increased MNP activity.

  • The prepaid customer base declined by 266,000 due to the adoption of alternative data solutions, impacting tourist demand.

  • Despite price adjustments, the churn rate increased to 2.2% due to market aggressiveness and life cycle closures.

  • Macroeconomic headwinds pressured demand in hardware sales, resulting in a contraction compared to the previous year.

  • The company anticipates a rise in CapEx intensity in the next quarter, consistent with business seasonality and infrastructure investments.

Q & A Highlights

Q: Could you provide more details on the divestment proceeds and your 2025 CapEx outlook? Also, what is your ideal net leverage level? A: We completed the sale of our Ukraine assets on September 9. The final sales value will be determined based on closing adjustments. We are considering investments in 5G and other initiatives. For CapEx, we will focus on core businesses, data centers, and renewable energy. We aim to cover 65% of our electricity consumption with green energy by 2026. Our net leverage target is around 1.5 times, below the industry average.