Turkcell(TKC)2024-09-13 01:43Financial Data and Key Metrics Changes - In Q2 2024, the company's top line reached TRY35 billion, with an EBITDA of TRY15 billion and a solid EBITDA margin of 42.6% [4][12] - The net income for the quarter was TRY2.9 billion, demonstrating financial resilience despite macroeconomic pressures [4] - The EBITDA grew by 0.3% year-over-year, reaching TRY14.9 million, while the EBITDA margin remained stable [13] Business Line Data and Key Metrics Changes - The Turkcell Turkiye segment's revenues rose by 1.5% year-on-year, driven by an expanding subscriber base and higher postpaid share [12] - The mobile segment saw a net addition of 477,000 postpaid subscribers, with the postpaid customer share reaching 73% [5] - In the fixed broadband market, 42,000 new fiber subscribers were added, with a churn rate of 1.2%, the lowest in 18 years [6] Market Data and Key Metrics Changes - Turkcell's international revenues, accounting for 3% of group revenues, rose by 2.7% to TRY890 million [10] - The company faced aggressive pricing actions from competitors, impacting its mobile segment [5] Company Strategy and Development Direction - The company is focused on digital services and solutions, aiming to connect with customers and meet their evolving needs [7] - Turkcell is committed to maintaining its leadership in the data center market, with revenue from these services growing by 57% to TRY540 million [8] - The company plans to accelerate tower fiberization and is preparing for 5G rollout, with expectations for a tender in 2025 [14][30] Management Comments on Operating Environment and Future Outlook - Management acknowledged the impact of inflation on financial performance and indicated that they are closely monitoring economic conditions [11][48] - The company expects the third and fourth quarters to show improved results, driven by strategic pricing adjustments and operational efficiencies [48] Other Important Information - The company has a cash position of TRY51 billion and gross debt of TRY99 billion, resulting in a net debt position of TRY32 billion [15] - The management is exploring funding options for potential reissuance of Eurobonds and is actively managing foreign currency risk [16][30] Q&A Session Summary Question: What will drive a reacceleration of the top line growth in the second part of the year? - Management noted that the absence of large budget projects in Q2 2024 impacted revenue growth, but they expect improvements in the latter half of the year [18] Question: Update on proceeds from the Ukrainian asset sale? - The final sales value will be determined based on closing adjustments, and proceeds may be used for significant investments, including 5G initiatives [18] Question: Revenue growth prospects for the rest of the year? - Management indicated that inflation trends and the absence of one-off projects from the previous year would affect revenue growth, but they remain optimistic about ARPU growth [21] Question: Subscriber base growth in July and August? - The company reported net additions in both months, with decreasing churn rates despite competitive pressures [22] Question: Clarification on revenue growth despite price increases? - Management explained that while ARPU grew, the decline in equipment sales and absence of one-off projects affected overall revenue growth [24] Question: Plans for Eurobond refinancing? - The company is considering options for refinancing the Eurobond due in 2025 and is monitoring market conditions [40] Question: 5G rollout strategy? - The company plans a hybrid rollout for both corporate and retail clients, depending on auction outcomes [45]