Turkcell(TKC)2024-05-13 21:09Financial Performance - Net cash inflow from operating activities decreased to TRY 41,721.5 million in 2023, down from TRY 42,281.1 million in 2022, indicating a stable performance year-over-year [968]. - Net cash outflow from investing activities decreased to TRY 20,905.8 million in 2023, from TRY 31,712.1 million in 2022, primarily due to increased cash outflows for property, plant, and equipment [969]. - Net cash inflow from financing activities increased to TRY 6,769.3 million in 2023, up from TRY 3,388.4 million in 2022, driven by higher inflows from derivative instruments and bond issues [970]. - Cash inflow from interest received increased to TRY 5,825.4 million in 2023, up from TRY 3,986.6 million in 2022, contributing positively to cash flow [969]. - The company expects total operational capital expenditures to be around 23% of revenues in 2024 [994]. - The company anticipates continued moderate cash outflows related to capital expenditures and potential 5G license investments [996]. Debt and Liquidity - Total debt as of December 31, 2023, was TRY 84,084.2 million, including TRY 2,427.6 million of lease obligations, reflecting the company's financing strategy [972]. - The debt-to-equity ratio improved to 68.8% as of December 31, 2023, compared to 81.1% in 2022, indicating better leverage management [977]. - The company has a strong liquidity position with cash equivalents of approximately USD 1.4 billion, covering debt service obligations due in the next two years [973]. - As of December 31, 2023, Turkcell's total contractual cash obligations amount to TRY 115.39 billion, with TRY 93.34 billion in loans and borrowings [1004]. - Turkcell Superonline has TRY 4.2 billion in short-term loans and TRY 4.7 billion in short-term intra-group loans [987]. Investments and Capital Expenditures - Turkcell's capital expenditures in 2023 focused on network infrastructure, renewable energy investments, and subscriber acquisition costs [994]. - The company has engaged in various financing agreements, including a EUR 30 million Green Loan for solar energy investments, demonstrating commitment to sustainability [985]. Subscriber and Market Trends - The proportion of postpaid subscribers in Turkey increased to 71.5% in 2023, up from 68.1% in 2022 and 66.4% in 2021, reflecting a focus on value [1014]. - The company expects an increase in revenue from mobile and fixed data due to rising smartphone penetration and a larger postpaid subscriber base [1016]. - The market for roaming revenues returned to pre-COVID levels in 2023 after significant restrictions in previous years [1017]. - The company anticipates a continued demand for higher data quotas in mobile services and higher-speed broadband packages in fixed broadband services [1018]. Research and Development - The company has invested significantly in R&D, employing around a thousand researchers at its wholly-owned subsidiary Turkcell Teknoloji [1012]. - The company is focusing on emerging technologies such as cybersecurity, artificial intelligence, and quantum technologies to enhance its technological competence [1010]. Regulatory and Economic Factors - The Turkish Lira depreciated by 36.5% against the USD in 2023, compared to a 28.2% depreciation in 2022, impacting the company's operations [1036]. - The ICTA has set maximum tariffs for national voice at TRY 3.12 per minute and national SMS at TRY 2.23 as of April 1, 2024 [1021]. - The company has faced restrictions in Ukraine regarding foreign exchange controls, which may impact future dividend distributions from subsidiaries [974]. Dividends and Shareholder Returns - The company approved a dividend payment of TRY 2.26 billion on September 13, 2023, to be distributed on December 20, 2023 [1008]. - The company approved a dividend payment of TRY 6,277.0 million, translating to a gross cash dividend of TRY 2.8532 per share, equivalent to USD 0.088542 [1009]. Financing Activities - Turkcell Superonline issued a total of TRY 1.45 billion in lease certificates in 2023, with interest rates ranging from 19.25% to 39% [986]. - Turkcell Odeme issued lease certificates totaling TRY 1.1 billion in 2023, with interest rates between 23% and 44.5% [990]. - Financell's total loan portfolio reached approximately TRY 5.8 billion as of December 31, 2023, with 6% (TRY 325 million) in foreign currency loans [989].