Turkcell(TKC)2023-04-27 19:36Financial Performance - Net cash inflow from operating activities decreased to TRY 25,459.6 million in 2022 from TRY 38,935.1 million in 2021, primarily due to inflation adjustments[1023]. - Net cash outflow from investing activities increased to TRY 19,042.6 million in 2022, up from TRY 17,721.6 million in 2021, mainly due to cash outflows for property, plant, and equipment[1024]. - Net cash inflow from financing activities for 2022 was TRY 2,067.5 million, a significant improvement from a net cash outflow of TRY 7,397.3 million in 2021, driven by decreased dividends and increased loan proceeds[1025]. - Cash generation from issuance of loans and borrowings increased to TRY 32,250.0 million in 2022 compared to TRY 26,188.0 million in 2021[1025]. - The total cash and cash equivalents increased by TRY 8,484.5 million in 2022, compared to an increase of TRY 13,816.2 million in 2021[1023]. - The change in working capital decreased to TRY (1,688.7) million in 2022 from TRY 124.8 million in 2021, influenced by various receivables and payables adjustments[1023]. Debt and Liquidity - The company has a bond issuance certificate approved for up to USD 1 billion to enhance liquidity and finance operations[1032]. - A sustainability-linked loan agreement of EUR 70 million was extended to December 2026, with terms dependent on meeting environmental objectives[1037]. - The company signed a EUR 50 million Green Loan agreement to finance sustainable investments, with a total annual cost of Euribor+1.95%[1038]. - Turkcell signed a USD 90 million, 10-year export finance facility to finance procurement from a global vendor, with a total annual cost of 3.04%[1041]. - Turkcell issued TRY 500 million in debt securities with a 25.50% interest rate on November 23, 2022, as part of a TRY 1.0 billion program approved by the Board[1042]. - Turkcell Superonline issued lease certificates totaling TRY 200 million with interest rates ranging from 19.25% to 24.0% in 2022 and 2023[1045]. - As of February 2023, Turkcell Superonline has TRY 1.9 billion in short-term loans and TRY 1.4 billion in intra-group loans[1047]. - Financell's total loan portfolio was TRY 2.5 billion as of December 31, 2022, with 5% in foreign currency loans[1048]. - Turkcell Group's total loan exposure is TRY 8,906.9 million as of December 31, 2022[1056]. - Turkcell has a strong liquidity position with USD 1.4 billion in cash equivalents, covering debt service due in the next two years[1057]. - The debt-to-equity ratio improved to 81.1% as of December 31, 2022, down from 92.4% in the previous year[1058]. Operational Challenges - The company faces pressures from high inflation, currency devaluation, and increased capital needs for technological advancements and infrastructure investments[1060]. - The company anticipates that measures taken in response to the COVID-19 pandemic may significantly impact customer usage of networks and services, affecting revenues and liquidity[1102]. - The company has experienced a substantial decrease in international travel, adversely affecting roaming services[1102]. - The company continues to face risks related to currency devaluation and geopolitical factors, which may impact future asset values[1104]. Subscriber and Revenue Trends - The proportion of postpaid subscribers in the company's subscriber base in Turkey was 68.1% in 2022, up from 66.4% in 2021[1080]. - The company anticipates an increase in revenues from mobile data and digital services, while revenues from voice and SMS are expected to decline[1081]. - The ICTA has set maximum tariffs for national voice at TRY 1.55 per minute and for national SMS at TRY 1.11, effective October 1, 2022[1086]. Governance and Management - The Board of Directors has been expanded from seven to nine members, enhancing governance and decision-making processes[1109]. - The company has a diverse executive team, including roles focused on finance, marketing, and digital services, to drive strategic initiatives[1113]. - For the year ended December 31, 2022, Turkcell provided, paid, and accrued an aggregate of TRY 154.1 million to key management personnel, including indemnities, salaries, bonuses, and other benefits[1141]. - The company raised employee salaries twice in 2022 due to accelerated inflation, reflecting a commitment to maintaining competitive compensation[1163]. - Turkcell's employee training programs include both classroom and e-learning formats, ensuring comprehensive onboarding and ongoing development[1166]. Employee and Workforce Changes - As of December 31, 2022, Turkcell employed a total of 23,795 employees, a decrease from 25,638 in 2021, reflecting a reduction of approximately 7%[1157]. - The number of employees in the Corporate & Residential Sales department decreased significantly from 760 in 2021 to 454 in 2022, a decline of approximately 40%[1157]. - The total number of employees in Turkcell Global Bilgi decreased from 17,347 in 2021 to 15,837 in 2022, a reduction of approximately 9%[1157]. - Turkcell's Directors and Officers Liability Insurance coverage amount is USD 40 million, renewed until October 1, 2023[1141]. - The company has not experienced any work stoppages and has no collective bargaining agreements with employees[1167]. - The "Flexible Remote Working Model" allows employees to work remotely, enhancing operational flexibility[1168]. Shareholder Information - As of April 17, 2023, the total outstanding shares of the company amount to 2,200,000,000, with 54% publicly held[1174]. - TVF Bilgi Teknolojileri Iletisim Hizmetleri Yatirim Sanayi ve Ticaret A.S. holds 26.2% of the shares, making it the largest shareholder, while IMTIS Holdings S.à r.l. owns 19.8%[1174]. - The company has created a new class of Group A shares, representing 15% of total issued share capital, which grants certain voting privileges[1172]. - The company completed a significant transaction on October 22, 2020, where TVF BTIH acquired a 26.2% direct interest in the company[1178]. - The acquisition by TWF was financed through an acquisition loan, with payments starting approximately three years after the acquisition[1180]. - As of April 17, 2023, the company had 78,251,634 ADRs outstanding held by 63 registered ADR holders[1181]. - The company has entered into agreements with executive officers and shareholders, ensuring terms comparable to those available in unrelated party transactions[1183]. - 0.05% of shares, with a nominal value of TRY 995,509, have been pledged by shareholders as security in favor of banks[1181].