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Turkcell(TKC) - 2025 Q2 - Earnings Call Transcript
2025-08-13 18:00
Financial Data and Key Metrics Changes - The company's top line reached TRY 53 billion, reflecting a year-on-year growth of 12% [4] - Group EBITDA rose by 15% year-on-year to TRY 23 billion, with a solid margin of 43.5% [5] - Net income from continuing operations increased by 37% year-on-year to TRY 4.4 billion [5][21] Business Line Data and Key Metrics Changes - The mobile segment saw 816,000 postpaid net additions, the highest in over five years, with mobile ARPU increasing by 9.8% year-on-year [6][7] - Fixed broadband segment remained stable with 3.3 million subscribers, while residential fiber ARPU increased by 17.5% year-on-year [13] - Digital Business Services grew by 39%, exceeding TRY 4.9 billion in revenues, driven by recurring service revenues [14] Market Data and Key Metrics Changes - The mobile churn rate was 2.2%, influenced by high competition in the mobile number portability market [8] - The share of high-speed packages in the fixed broadband segment increased by 16 percentage points year-on-year [13] Company Strategy and Development Direction - The company is committed to maintaining its leadership position in the mobile market through investments in 5G and digital transformation initiatives [9][10] - A focus on customer experience and dynamic pricing practices is emphasized to enhance retention and competitive positioning [11][12] Management Comments on Operating Environment and Future Outlook - Management expects a moderation in performance in the second half of the year, forecasting year-on-year inflation at 30.5% [18] - The company remains cautious about its guidance, considering the high base effect from the previous year and inflation dynamics [42][43] Other Important Information - CapEx intensity for the quarter was 16.9%, with over 80% allocated to mobile and fixed networks [23] - The company’s cash position reached TRY 117 billion, with a net debt position of TRY 25 billion at the end of the quarter [25] Q&A Session Summary Question: Update on fixed concession and 5G - Management indicated that the Minister of Transport and Infrastructure mentioned a potential renewal of Turk Telekom's concession for 25 years, with a goal for 5G services to be available by 2026 [31][32] Question: Guidance for the second half of the year - Management stated that strong first-half performance provides headroom for guidance, but expects growth to taper off due to contract structures and inflation [42][43] Question: Future of the TOG project and its impact on profits - Management acknowledged the cyclical nature of the automotive industry and indicated that TOG will take time to reach sustainable profitability, but remains confident in the long-term value of the investment [44][46] Question: Increase in financing costs and income - Management explained that effective balance sheet management has mitigated the impact of high interest rates, resulting in a net positive income from FX management [50] Question: Turkcell entering the mobile market - Management noted that there is no clear information regarding becoming the fourth mobile operator and emphasized the challenges of building a mobile network [55][56]